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

[Ratanpara]

Ok, but what if Tesla doesn’t want to raise money because they have enough and they can’t go any faster than they already are going.

What’s the incentive for Tesla to do something they don’t want? What exactly does the S&P500 have to offer Tesla? That would interest Elon? Can they offer SP stability for his shareholders? Can they offer no shorting of the stock?

There is no long term effect on TSLA if it’s in S&P 500 or not, Neither Elon cares or true long term investors, How has Tesla done so far without being in Index ?

 

[capster]

86400 seconds to go. Some men think about TSLA 8000 a day apparently.

And it’s normal, perfectly normal. I assure you.

 

[Krugerrand]

It is certainly possible that they can generate more cash than they can spend and don't need to raise, I suspect we will not know the answer until after Battery Day.

But I'm not sure Tesla does or doesn't want to raise cash, more cash in the bank is always handy... especially when expanding rapidly..

S&P 500, brings in a solid class of "buy and hold investors" and signals the maturity of the company to the slower learners.. It probably burns the rest of the shorts..

The share price is decoupled from the business, for the business, revenue and sales are what mostly count,,,
So possibly S&P 500 means fewer crap FUD articles in the press, and perhaps a bit more acceptance of the Tesla brand by a wider portion of the car buying public...

For the S&P 500 committee and the Index Funds, Tesla brings an opportunity to grow member funds and diversify away from risky Fossil Fuel assets...

If both sides are playing the long game, they do a deal, because Tesla in the S&P 500 is in the interests of both parties... the only clear losers are those that have already lost... the Shorts and the Fossil Fuel industry...

EDIT:: I will say the Index Funds need Tesla in the index more than Tesla needs to be in the index, but they don't need it at any price.....

Ok, most of that seems reasonably sound.

I’m not understanding, though, your reference of decoupling the SP from the business, and then stating the business, revenues and sales are what mostly count. That sounds contradictory to me.

 

[Highway2Heel]

My hypothesis...TSLA posts a resounding profit but does not want to price a secondary for S&P inclusion hence his “baby isn’t ready for the SPoon” yet. Perhaps Elon sees this share dilution as an easy out for the naysayers and doubters of the last few years and keeping share count where it is is a great way to make them (i.e., shorts) truly S his C....if you will...

...I wonder how bad Chanos is twitching these days?

 

[Steve m]

Humorous, but flawed analog:

Often, the US Mars probes are launched before the spacecraft/rover software is ready. Since it’s ~9 month cruise, the project development budget can be “smoothed” by delaying the software development until it is actually needed.

However: OTA is definitely required.

Not much air in space

 

[Krugerrand]

There is no long term effect on TSLA if it’s in S&P 500 or not, Neither Elon cares or true long term investors, How has Tesla done so far without being in Index ?

And this is what I’m thinking, so Elon isn’t likely to give in to S&P wishes unless it suits/is beneficial to Tesla.

Which brings me back to Elon’s very specific comment about it being more important to use money efficiently than to have more of it than they can actually use. He’s also commented on Tesla being close to a situation where they’re making enough to fund their expansion as fast as is efficiently and feasibly possible. I think that happens fully in Q3 & Q4.

How much more than the 8B do they need to have on hand? If they come out of Q2 with the same 8B in the bank after riding out the COVID shutdown, yet continuing their expansion, then - we don’t need no stinking capital raise, people! Am I right?

 

[MC3OZ]

Ok, most of that seems reasonably sound.

I’m not understanding, though, your reference of decoupling the SP from the business, and then stating the business, revenues and sales are what mostly count. That sounds contradictory to me.

Long term the SP reflects the business results... I'm saying Tesla and Elon are focused on Business results, not the SP.

FUD is a bit of a drag which might be having a marginal affect on sales... but that hardly matters... Being in the S&P 500 will help create the impression Tesla is a mature company, and that might help with sales.

We both agree demand is currently not an issue.... so the limiting factor on revenue growth at present is the rate of production expansion...
That is going better than many realise..

But Battery Day may reveal the true limitations are suitably qualified and experienced staff, capital and raw materials...

I guess what it boils down to is, Index Funds will not want to be forced to buy Tesla at any price.
Making a stand on principle that excludes entry to the S&P 500, will not benefit Tesla, it may create more negative perceptions and more FUD articles...
Joining the S&P 500 will not in any way hurt the business, and may bring some marginal benefits...
There is something to be said for getting it over and done with, and off the table, so Tesla can focus on expanding the business.

 

[ZsoZso]

Humorous, but flawed analog:

Often, the US Mars probes are launched before the spacecraft/rover software is ready. Since it’s ~9 month cruise, the project development budget can be “smoothed” by delaying the software development until it is actually needed.

However: OTA is definitely required.

Not to pick a nit, but wouldn't that be OTV rather than OTA ?
(as in Over The Vacuum, not Over The Air, since we are talking about space with no air...)

 

[Lbkmxp100d]

My hypothesis...TSLA posts a resounding profit but does not want to price a secondary for S&P inclusion hence his “baby isn’t ready for the SPoon” yet. Perhaps Elon sees this share dilution as an easy out for the naysayers and doubters of the last few years and keeping share count where it is is a great way to make them (i.e., shorts) truly S his C....if you will...

...I wonder how bad Chanos is twitching these days?

I have given some thought about Chanos and other guys who are doubling down (Or 10X) to stay short TSLA. I seasoned investor like Chanos has to know TSLA is trending up which makes me suspect he has hedged via calls and timely day trading to lessen the impact of TSLA rise on his fund. That being said, I have no reason to say this besides knowing he has had success and Is cleaver guy regardless of how much a dislike him.

 

[BornToFly]

You could combine the dental visit with the proctologist visit, and get your butt flossed. (String bikini?) The affect on the share price should cancel out.

No, No. The problem with today was that I was too tired for any action last night. If the SP is up tomorrow, you will all know that the wife and I were making our neighbors blush later tonight....

 

[Krugerrand]

Long term the SP reflects the business results... I'm saying Tesla and Elon are focused on Business results, not the SP.

FUD is a bit of a drag which might be having a marginal affect on sales... but that hardly matters... Being in the S&P 500 will help create the impression Tesla is a mature company, and that might help with sales.

We both agree demand is currently not an issue.... so the limiting factor on revenue growth at present is the rate of production expansion...
That is going better than many realise..

But Battery Day may reveal the true limitations are suitably qualified and experienced staff, capital and raw materials...

I guess what it boils down to is, Index Funds will not want to be forced to buy Tesla at any price.
Making a stand on principle that excludes entry to the S&P 500, will not benefit Tesla, it may create more negative perceptions and more FUD articles...
Joining the S&P 500 will not in any way hurt the business, and may bring some marginal benefits...
There is something to be said for getting it over and done with, and off the table, so Tesla can focus on expanding the business.

Got it.

I vote for Tesla telling them to go pound sand, because that’ll be way more exciting.

 

[MP3Mike]

My current 401-K plan (went into effect this year) does not allow direct investment in stocks or ETFs, only mutual funds.
I was able to get into Baron Partners Retail Fund BPTRX this year - have gained 47% via cost averaging in so far this year

Yep, mine is the same, so I'm in BOTRX as much as they will allow me to get more TSLA and SpaceX exposure. I just wish the mutual fund fees were a little more reasonable.

 

[MC3OZ]

Got it.

I vote for Tesla telling them to go pound sand, because that’ll be way more exciting.

I can see that is the majority point of view, and it is more fun...

I'm just guessing the perspective from the other side of the fence... for balance...

If Tesla did tell them to "go pound sand" I think it puts the Index Funds in a very tricky position...

Bench-marked funds which include Tesla, might start to regularly out perform them....

 

[anthonyj]

Me selling puts to dumb bears

 

[kbM3]

It really only takes one scenario. You undercut your competition to drive them out of business. Pretty simple really. Price has been one of the only legitimate reasons many people haven't seriously considered an EV.

Really? Ok give EVEN ONE SINGLE example where someone drove someone else out of business when they were production constrained. According to you they were selling out every item as fast as they could make them and still chose to cut prices?

‘You’re missing the whole point. When you are present and near future production constrained, cutting prices does not increase sales. It does not hurt your competition.

If it’s so simple, you must have lots of examples where they were production constrained completely selling out, ramping production as fast as possible and still cut prices. Correct?

 

[Jack6591]

Just thinking out loud.

Breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory!



Just amazing how well you executed, especially in such difficult times. I am so proud to work with you!

 

[Unpilot]

So I think we all need a break after this historic run up.

How about we all stay off-line till ...hmm.. Thursday?

Deal?

 

[phantasms]

I’m sure this has been asked and answered already. I spend a lot of time here but not all my time here.

What does an S&P announcement look like? Is it a decision that happens at a preset quarterly meeting or are they on the fly?
Who decides?
How do they announce decisions?
Etc
Etc

You get the picture. What are the mechanics of such a thing?

thanks!

 

[UnknownSoldier]

The hysteria over Elon's tweet of his photo of playing with his young son is baffling. Not everything is some hidden secret coded message to Elon's army of loyal investors. Sometimes, it's just a proud father who is spending quality family time with his family and wanted to share it with his followers.

 

[Unpilot]

Keep refreshing this page and you will know before most people!