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

[Artful Dodger]

"Tesla 5-for-1 Stock Split Announced (what now)?" | Solving the Money Problem w. SMR

 

[FireMedic]

‘He shows good judgment if he buys a Tesla I will buy NKLA shares. 2 or 3 of them.’

But he didn’t know that there was a known fix for the problem about which he was advertising his inability to fix… In spite of the fact that he alone is the only one smart enough to have “beaten Elon at his own game” he somehow can’t troubleshoot a known fix on a smart car!!

 

[FrankSG]

Some gorgeous shots of Giga Shanghai as the sun is going down at the end of the video:

 

[PeterJA]

Grudging praise from a WSJ reporter:

Tesla Inc (NASDAQ: TSLA) announced Tuesday a 5-for-1 stock split and this is consistent with CEO Elon Musk's belief in looking out for small investors, The Wall Street Journal's Tim Higgins said on CNBC.

...

Musk Is Selling A Vision: Musk continues to offer investors the same story presented years ago. Tesla is a "narrative story" about the future of transportation and even the world, Higgins said. This vision is "pretty exciting" to retail investors although experts and analysts might have to do "very ambitious math" to justify the current valuation.

Nevertheless, retail investors believe the future of Tesla will include self-driving taxi cars and alternative energy offerings.

"The fact that Elon Musk has gotten to this point, that four quarters of profitability, as messy as they may have been, suggests that he can execute," Higgins said. "And if he can execute on this, what can he do going forward?"

Musk Always Cared About 'The Little Guy' And Tesla Stock Split Shows That: WSJ's Higgins​

 

[ZeApelido]

Elon Musk: John Galt

Trevor Milton: Bernie Madoff

 

[mekberg]

Let me explain! No, there is too much.

Let me sum up.

Elon split shares before S&P inclusion and battery day so that small retail investors can also be rich while burning shorts.

 

[transpondster]

get

 

[Artful Dodger]

Some gorgeous shots of Giga Shanghai as the sun is going down at the end of the video: (Wu Wa dated 11 Aug 2020)

Well, there's $4B USD in capital raised for the next round of production expansion in China.That sounds like enough to build a Model 2 plant, or a Cybertruck plant (or both).

Do we know if these additional funds are more non-recourse local debt? Certainly good that there's no dilution associated with that style of Cap raise.

Cheers!

 

[Singuy]

Well, there's $4B USD in capital raised for the next round of production expansion in China.That sounds like enough to build a Model 2 plant, or a Cybertruck plant (or both).

Do we know if these additional funds are more non-recourse local debt? Certainly good that there's no dilution associated with that style of Cap raise.

Cheers!

Model 2 yes, trucks are not popular in China at all unless if it's a FU money kind of purchase. Service is so cheap in China that you never have to haul anything home as every large item you buy has delivery/home install included. Having an actual "Work truck" is seen as something done by low working class peasants.

However if the Chinese sees that truck as a tank alternative then it may catch on, before being banned by the government..lol.

 

[tesila]

Interesting.

He shows good judgment if he buys a Tesla I will buy NKLA shares. 2 or 3 of them.

In a recent podcast, when asked to compare Tesla and Jaguar, Trevor said something like "in terms of software Tesla destroys Jaguar, in terms of quality Jaguar destroys Tesla"

 

[gabeincal]

Great news on the Energy side of the business here.

"Tesla’s big battery in South Australia, the Hornsdale Power Reserve, recently hit another milestone as it entered the final testing phase of its recent expansion. With such performance, it appears that Tesla’s Powerpack farm, currently one of the world’s largest battery installations, will still be providing the region with industry-leading renewable services for the foreseeable future.

The Hornsdale Power Reserve has been impressive from the time it was installed. Constructed in about 100 days partly due to a bet between Tesla CEO Elon Musk and Atlassian co-founder Mike Cannon-Brookes, the massive 100MW/129MWh battery installation promptly played a key part in providing frequency control and emergency back-up energy services to South Australia’s grid.

The battery farm’s performance has been so impressive that it was expanded to a capacity of 150MW/194MWh. With this expansion comes new services like synthetic inertia, a function that has long been dominated by fossil fuel-powered generators. Currently, the expanded battery installation is going through testing that allows the system to progress through a number of “hold points.” And so far, recent observations indicate that the upgraded battery is poised to be even more disruptive once it’s fully operational.

During its tests on Tuesday, for example, the upgraded Hornsdale battery performed a rapid 270MW flip by charging at 120MW and discharging at 150MW. As noted in a Renew Economy report, the battery installation appears to have performed the flip on several different occasions, and at least one of them had an impact on the wholesale price of electricity in the area. During one such flip, the expanded Tesla Powerpack farm pushed down power prices to just above AU$8 per MW.

“Those 270MW flips – from the level of discharge to the level of charge – are likely a world record in both speed and extent of the change. And it’s this flexibility of the big batteries such as Hornsdale, and others at Dalrymple North, Lake Bonney, Gannawarra and Ballarat, that is particularly attractive to project owners and valuable to AEMO, the market operator,” the Australian publication noted.

The Australian Energy Market Operator has lauded the Hornsdale big battery on several occasions for its speed, accuracy, and flexibility. Its undeniable breakthroughs in the energy sector have inspired what could very well be described as a battery storage movement in Australia. Apart from the expansion of the Hornsdale Power Reserve, Neoen Australia is also expected to construct a massive 600MW/1200MWh system in Victoria. The Victoria project will dwarf even the upgraded Hornsdale battery when it is completed, and it is poised to utilize Tesla Energy’s flagship energy storage product, the Megapack."

 

[StealthP3D]

Model 2 yes, trucks are not popular in China at all unless if it's a FU money kind of purchase. Service is so cheap in China that you never have to haul anything home as every large item you buy has delivery/home install included. Having an actual "Work truck" is seen as something done by low working class peasants.

However if the Chinese sees that truck as a tank alternative then it may catch on, before being banned by the government..lol.

The government already strongly discourages personal truck ownership however I think I've heard rumblings that might change with the advent of clean, silent electric trucks. Certainly the Cybertruck has enough capability to replace some larger, slower trucks improving traffic flow while also reducing pollution (which is important to the ruling party to maintain power and avoid revolts).

China loves Western things so I see the Cybertruck being adopted in a big way, not because everyone in China will be driving pickups but China is so huge it will only take a small percentage of adopters to result in HUGE sales numbers. My bet is this will happen because Elon and company designed it to be a tough and utilitarian truck and China is changing more quickly than anyone can track.

 

[Steve m]

Valuation?

By begining of 2022 Tesla will be making at least 2 million cars a year at $50k per car and a 15% margin.

That is 15 billion in profit and at a 50x P/E for a hyper growth company it will be worth 750 billion dollars or roughly 3x todays market cap.

Not including FSD or power or anything else.

 

[Dutchie]

Just some thought here: with a 1:5 stock split you just create instantaneously 5 fractional (1/5) shares which you now call one share. So the price is indeed 1/5.

With giving four dividend stock does the share price automatically go to 1/5? I remember that Tesla did a capital raise in the past I.e. issuing more shares and the price did not budge. Granted the cash position of Tesla increased. With the payment of stock dividend there there will be 4 times more shares but is it I cannot see that the share has to fall accordingly.

 

[PeterJA]

The government already strongly discourages personal truck ownership however I think I've heard rumblings that might change with the advent of clean, silent electric trucks. Certainly the Cybertruck has enough capability to replace some larger, slower trucks improving traffic flow while also reducing pollution (which is important to the ruling party to maintain power and avoid revolts).

China loves Western things so I see the Cybertruck being adopted in a big way, not because everyone in China will be driving pickups but China is so huge it will only take a small percentage of adopters to result in HUGE sales numbers. My bet is this will happen because Elon and company designed it to be a tough and utilitarian truck and China is changing more quickly than anyone can track.

Agreed, robotaxis are not taxis, and Cybertrucks are not F-150s.

A radically superior product is gonna find many more buyers than predicted by past experience with inferior products. That's why Elon didn't bother with market research for many Tesla products. The world has seen nothing like them before, and most people can't imagine them before they experience them.

 

[Dutchie]

Use common sense. It's the VALUE of the dividend that gets taxed. A stock split dividend is a zero worth dividend.

I have no knowledge of tax laws in other countries but it would asinine to tax you on the four shares you get when the very valuable share that enabled those 4 shares just lost 4/5ths of it's value. That's just common sense.

People are making this out to be more than it is. Don't get me wrong, it's a great catalyst for a bull run but that's all it is. I'll take it.

Are you sure? You get four stocks dividend. Each worth about $300. That the one stock you own got down in value from $1500 to $300 has nothing to do with it.

 

[Mich]

Just some thought here: with a 1:5 stock split you just create instantaneously 5 fractional (1/5) shares which you now call one share. So the price is indeed 1/5.

With giving four dividend stock does the share price automatically go to 1/5? I remember that Tesla did a capital raise in the past I.e. issuing more shares and the price did not budge. Granted the cash position of Tesla increased. With the payment of stock dividend there there will be 4 times more shares but is it I cannot see that the share has to fall accordingly.

A Cap Raise changes the financial situation of the company therefore a new validation makes sense. A stock split on the other hand doesn't.

 

[MC3OZ]

Just some thought here: with a 1:5 stock split you just create instantaneously 5 fractional (1/5) shares which you now call one share. So the price is indeed 1/5.

With giving four dividend stock does the share price automatically go to 1/5? I remember that Tesla did a capital raise in the past I.e. issuing more shares and the price did not budge. Granted the cash position of Tesla increased. With the payment of stock dividend there there will be 4 times more shares but is it I cannot see that the share has to fall accordingly.

Even if it do that way, they just adjust all Bid and Offer orders in the market by dividing by 5. IMO rounding Offer down and Bid up.
But that is just a starting point... the market decides where it wants to go.

The other alternative is trade at 2 different basis of quotation for a week or so.

So you can either buy and sell 5X Tesla (the current stock) or 1X Tesla the new split stock.
Then they don't need to adjust any existing orders.. as nothing changes..
The new split stock has a week (or a few days) to define a trading range, before the regular stock disappears..
It is more complex, the right to the dividend must transfer with the 5X sale.
After 1 week (or a few days) the original stock simply disappears and all existing orders are wiped.

I suppose a 3rd alternative is wipe all orders anyway.

Regardless of what they do, the market will quickly establish the real price.

EDIT: I suppose the market is not going to conclude Tesla is suddenly worth 5X as much, so around 1/5 of the price is where we are likely to be.

 

[Mike Smith]

Let me dumb it down for you.

For every $1 rise in SP now, one’s account value increases by the number of shares they own. After the split, every $1 rise in SP has the exact same effect EXCEPT you now have 5xs more shares so your non-diversified investment account value appreciates 5xs faster.

This is why a share split is always considered a vote of confidence from management. Post-split any stock move will be extended in real value, so stock splits only happen when management thinks the stock is about to go higher. Tesla and Apple aren't lying when they say the reason is to make the stock more accessible, but notice they didn't say anything about the timing.

This is the real reason TSLA went up so much today. Big investors know all this - that it means good news is on the horizon. CNBC knows it too but they won't say it because they hate Tesla for not advertising.

 

[tinm]

Grudging praise from a WSJ reporter:

Tesla Inc (NASDAQ: TSLA) announced Tuesday a 5-for-1 stock split and this is consistent with CEO Elon Musk's belief in looking out for small investors, The Wall Street Journal's Tim Higgins said on CNBC.

...

Musk Is Selling A Vision: Musk continues to offer investors the same story presented years ago. Tesla is a "narrative story" about the future of transportation and even the world, Higgins said. This vision is "pretty exciting" to retail investors although experts and analysts might have to do "very ambitious math" to justify the current valuation.

Nevertheless, retail investors believe the future of Tesla will include self-driving taxi cars and alternative energy offerings.

"The fact that Elon Musk has gotten to this point, that four quarters of profitability, as messy as they may have been, suggests that he can execute," Higgins said. "And if he can execute on this, what can he do going forward?"

Musk Always Cared About 'The Little Guy' And Tesla Stock Split Shows That: WSJ's Higgins​

Higgins’ book on Tesla is scheduled to come out from Doubleday on 3 Aug 2021 fyi. Expect massive publicity.

Tom Randall’s new biography on Elon (“Architect of the Future” I think is the subtitle) is scheduled to come out around February 2021 so I hear.

My book on Tesla will come out at some point in-between those two.

2021 gonna be interesting. Hoping to meet many of you on the book tour.