Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Artful Dodger]

They also have S/X pack assembly and powertrain subassembly at Fremont, which they might be able to move to GF1 and Lathrop.

No way they move S/X pack prod. to GF1. Cells come from Japan. If anything, they'd move it to Lanthrop or similar temp. facility, but again, unlikely.

MUCH more likely is the new PLAID PACK design gets accelerated, and the roll out happens sooner than this Summer. They'll have the engineering resources to do that, and recall the public permits show there's a pilot project / bty line being build now at Fremont.

I think any changes at GF1 need to focus on these 2 priorities:

1. supporting Max. Model 3 production at GF3/Shanghai
2. increasing TE powerwall production to satisfy latent consumer demand

Cheers!

 

[bruce4000]

Legacy auto makers ok with closing plants
Since likely have plenty and growing unsold inventory on dealer lots. Tesla not wanting to close plant shows still plenty of demand.

 

[Krugerrand]

We can learn form Italy.

For starters we have learned that a country with an older population is more susceptible to complications and dying from viral infections. Oh what, oh what should we do about that? Maybe we should send everyone over the age of 65 to Redemption Island?

 

[Cosmacelf]

Question: with SP dropping below $555, will the accrued executive bonus to Elon be reversed out this Q, helping the bottomline?

I believe the bonus was only due if the SP target lasted longer than a certain period of time, was it 30 days? I don't know if that was hit or not. But yes, if GAAP bottom line was hit for Elon's stock compensation (which I believe it was in anticipation of the 30 day target being hit), then it would be reversed next Q if in fact they didn't make the 30 day or whatever target. But if it did make the target then Elon keeps the bonus and next quarterly earnings won't be affected.

Not that this really matters much either way. Analysts routinely back out stock based compensation from earnings so they can compare company results more meaningfully. IMHO, putting stock based compensation into GAAP was a big mistake since no one takes it seriously for company performance metrics anyways.

 

[RiverCard]

Or at least that's my guess of Tesla's legal arguments.

Good guess. If litigation ensues, Tesla might "beat the rap but not the ride." The ride (cost of defense) can get expensive both to pay the lawyers and because of the diversion of management time to help in the defense. I'm not predicting anything, other than suggesting that hubris that one is above the law has an additional dimension to the OP's suggestion it presents a poor public image during a time of crisis and may actually cause direct financial harm to the corporation, particularly if it is arguably excluded by the terms of Tesla's general liability policy.

 

[dl003]

I believe the bonus was only due if the SP target lasted longer than a certain period of time, was it 30 days? I don't know if that was hit or not. But yes, if GAAP bottom line was hit for Elon's stock compensation (which I believe it was in anticipation of the 30 day target being hit), then it would be reversed next Q if in fact they didn't make the 30 day or whatever target. But if it did make the target then Elon keeps the bonus and next quarterly earnings won't be affected.

Not that this really matters much either way. Analysts routinely back out stock based compensation from earnings so they can compare company results more meaningfully. IMHO, putting stock based compensation into GAAP was a big mistake since no one takes it seriously for company performance metrics anyways.

If I knew Elon enough, he'd gladly defer it.

 

[RobStark]

I've been wondering whether GM & Ford's Finance Companies are systemic risks for them.....

Well, less new cars produced plus low gasoline prices should bolster used ICEv values.

At least in the short term.

GM also said they would "aid" current customers from coronavirus fallout.

With GM accessing free money that might mean a note payment deferment for those that lost their jobs after the pandemic started?

 

[Right_Said_Fred]

As long as you acknowledge it is luck and not skill then we are good ... now just stay long this time

I guess you are making all these trades in a non taxable account or there are no capital gains taxes in Nederlands

I sold other positions with limited upside and bought more Tesla on the way down so i got best of both worlds in tax sheltered account

not sure if @CurtRenz is still posting ARK but here you go ... I think they loaded up on some shares yesterday also
View attachment 523191

It’s in a taxable (business) account, so I will have to pay 20% on those gains. But that’s only at the end of 2021!

If I don’t reinvest all my gains I’m good. I plan on buying back 110% of the TSLA stock I had (bought 50% today), and also diversify into some other stocks should the market tank another 20-30%. But even after that and after taxes I will still have the same amount left in cash that I originally paid for my TSLA shares 1,5 years ago. So basically all my shares are free.

I sure am not going to claim that is skill, let’s stick with luck.

 

[jhm]

Legacy auto makers ok with closing plants
Since likely have plenty and growing unsold inventory on dealer lots. Tesla not wanting to close plant shows still plenty of demand.

Legacy automakers will be first in line for government cheese.

 

[Johnny Ma]

Some people here think the Fremont 75% workforce reduction is good news (since it isn't a total shutdown, and people are speculating about spreading people out, so only 25% of people work at one time, don't know if that'll fly). I think the headlines and news stories are going to be pretty brutal. Unless we are up macro big time tomorrow, I suspect TSLA will be down at open from this.

I think you're probably right in the short term. I wouldn't trade this news one way or the other. I don't trade much, though. Buy and hold is my style. Only sell when I lose faith in a company.

I work in a hospital (funny that this gives me insight into trading in the broader market - strange times) and expect TSLA is going down near term, one way or another because macros probably haven't bottomed. From what I know, I expect it to bottom out in 5-7 days because of panic. But if I really felt so certain about that, I'd sell all of my shares, by puts, and short the stock. Then use my winnings to buy many more shares than I already have. Instead, I'm just going to not sell and instead buy more if it goes down.

 

[Prunesquallor]

Some people here think the Fremont 75% workforce reduction is good news (since it isn't a total shutdown, and people are speculating about spreading people out, so only 25% of people work at one time, don't know if that'll fly). I think the headlines and news stories are going to be pretty brutal...

Oh. No.

 

[X Fan]

Well, less new cars produced plus low gasoline prices should bolster used ICEv values.

At least in the short term.

GM also said they would "aid" current customers from coronavirus fallout.

With GM accessing free money that might mean a note payment deferment for those that lost their jobs after the pandemic started?

I'm thinking defaults (Trump $ will not cover car payments)....of course, I'm not up to speed on how much paper they retain and/or they when it's packaged whether they had to backstop. Time will tell re: ICEv values....you might be right but a flood of possessed cars would be the negative offset.

btw: I hadn't heard that GM was accessing free money?

 

[Artful Dodger]

Just look at his posting history. Oh, that's right, you can't...

Sure you can. Here's how:

Search Postings | KSilver2000​

Happy giggles.

 

[PhaseWhite]

I have a confession to make: I sold all my shares at 800 a few weeks ago. After my well publicized bailout and buyback - a few weeks earlier - I was convinced I wouldn’t be selling anymore. But then corona happened. After the situation in Italy started deteriorating it became crystal clear to me how events in the rest of Europe and the world would roll out. And TSLA would not be immune to it. So I decided to preserve my gains. It wasn’t fear, it just seemed like the smart thing to do.

But it was always my intention to get back in and that’s what I started doing today: I bought half of my position back at 370, 360 and 352 (358 average). It may have been too soon, as the US has not yet seen the height of the corona crisis and the economic impact still has to become visible. So I’m still keeping cash to buy back the rest, plus more, if we go lower.

Over the last few weeks, as we were going down, I felt a lot of respect for the HODL’ers here, for sticking to their conviction no matter what. But I also felt sorry for them, for not being able to cash in on their gains and be able to buy back more shares at a lower price. I’d wish that for all longs.

Well traded. I'm HODLing TSLA because my wife has given me strict instructions not to sell it. Instead I opened hedge positions in TZA and (3x short smallcaps) and FAZ (3x short financials) on the hypothesis we'll see a financial crisis hitting smaller firms that don't have as much access to capital and curtailing the margins of firms that rely on easy capital access for generating profits. We already saw banks are ending all stock buybacks. Side rant: This is why I hate buybacks, they are almost always done at peak price levels, and not when stocks are cheap.

I think we have further to go down, to put things in perspective the last 2 down days we saw SPY bounce off support around the lows of Dec 2018 set during the escalating trade war. I think we go below that low, as the impact is way worse than a trade war and the market started at levels priced for perfection a month ago. My guess is we see the broader market bottom somewhere around 2016 SPY levels between 1800-2100 in the S&P500.

Chart for reference:
^GSPC Interactive Stock Chart | S&P 500 Stock - Yahoo Finance

 

[BornToFly]

As shutdowns continue, I think we can expect bankruptcies in the Hotel industry, Airline industry, auto, and many other large and small businesses, lots of auto and home loan defaults, etc. by summer/fall. The Dow and NASDAQ are still well above 2016 levels, where the economy was strong and businesses were thriving. I'm no expert, but I think we still have a long way to fall with global recession coming, and don't see a bottom until we are below 2016 levels. I just applied for a home equity loan (house is paid off), so I can buy lots of shares under 250. We know that TSLA can go over 900 no problem, but it won't do it until the economy has turned around, which can take a while. So I'm buying shares with no time decay (I can pay interest on a home equity loan for years no problem). If I buy LEAPS, and we stay flat for 1-2 years, I could lose it all, so I'm not taking that risk. Anyway, that is my get rich plan.

 

[tslagreen]

Basically no insurance. Not needed. Most of the health care is public and essentials are guaranteed to everybody.
(I have a cronic condition for which I have to do blood tests every 6 months and take some madication every day. Never paid a cent. No insurance.)
The question here is not what insurance you have (you don't have one), but how good is your local hospital and the specific department you are dealing with in that hospital.

Thanks for input. US healthcare needs re-vamping, but I am not sure the European mode

It's ok. Some of us shorted the market 3x.

 

[RiverCard]

I believe the bonus was only due if the SP target lasted longer than a certain period of time, was it 30 days? I don't know if that was hit or not. But yes, if GAAP bottom line was hit for Elon's stock compensation (which I believe it was in anticipation of the 30 day target being hit), then it would be reversed next Q if in fact they didn't make the 30 day or whatever target. But if it did make the target then Elon keeps the bonus and next quarterly earnings won't be affected.

There are two necessary components to the options vesting:
1. Market Cap related
2. Operational performance related (i.e. Revenue and adjusted EBITDA).

GAAP earnings are hit with stock comp only when the second component (operational performance) is met, even if the market cap component is not.

The market cap requirement states:

"The first tranche of the 2018 CEO Performance Award will not vest unless our market capitalization were to approximately double from the initial level at the time the award was approved, based on both a six calendar month trailing average and a 30 calendar day trailing average (counting only trading days)."
​

When the2018 CEO Performance Award was approved by shareholders, market cap was about $50 billion. Currently about 185 million shares are outstanding, so market cap is currently around $67 billion.

 

[MC3OZ]

Perhaps a round figure aversion about dilution?
The 2021 convertible notes ($1.38 billion) are redeemable at $359.87/share.

The 2022 convertible notes ($0.978 billion) are redeemable at $327.50/share.
The 2024 convertible notes ($1.480 billion) are redeemable at $309.83/share.

The strike price for the 2018 CEO Performance Award is $350.20/share​

My only concern around the short term share price is I want all convertible notes converting, that isn't a change of mind I've always wanted that.

 

[Artful Dodger]

I would have thought we would have seen more birds around here the last week or so

Birds were likely retail shortzes, squeezed out in Jan/Feb. This has been an entire month of INDUSTRIAL scale shorting, and exudes the reek of Market Making.

 

[tslagreen]

It's ok. Some of us shorted the market 3x.

Shorted the market or shorted TSLA? Certainly your prerogative, but keep in mind this is a Tesla forum with primarily pro-Tesla patrons who want to support the company and its goals not sabotage it.