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

[GeoX750]

Generally, lowering headcount during recessions is not done so companies can "survive", it's done to prop up earnings/share prices and placate shareholders.

Yes, cutting 10% is something all mega-sized companies can, and probably need to do. Tell me why this is not helping, the stock price ??

The most likely reason is Elon's insistently childish tweeting style about his "feelings" being "super bad" about the economy, a dour prediction about the future. Investors my fear there is bad new about Tesla's outlook coming ?

Hopefully, the market figures it out eventually and this results in a recovery of the share price.

 

[Usain]

While I 100% agree with this statement I also think Elon wants to trim the fat. He's looking for efficiency wherever he can and he does this on a regular basis.

Elon is a margin monster, he knows how to make money with a company and one of those ways to make money is get rid of the dead weight.

...sometimes without consequence but that is how Elon operates.

Yes indeed.

There is one thing I have learned about Elon: ALWAYS TAKE HIM AT HIS WORD.

There is no ulterior motive. There is no secret agenda. If Elon says they are overstaffed in many areas then that's exactly what he thinks and that is exactly why he is taking action.

 

[mongo]

True, but that just happened.

Indeed, I was addressing that the legislature has no impact at this point, if facilities are held by/through Tesla.

Batteries do act as producers when exporting, so the legislation seems reasonable. It also only took 3 months for Tesla to become approved after their request. Maybe the blackout helped?

 

[thx1139]

What was your production estimate for Shanghai ?

I'd say EU sales will be down because Shanghai didn't produce much in May, most of which would have gone to EU, for eg.

Anyway, I just hope the market isn't as bullish as you on Q2. I want market to assume a reduction in sales and a lower Q2 EPS. Anything better would be a plus.

Honestly I cant see how the spin doctors wont work Q2 delivery and production numbers into anything but a negative.

 

[Todd Burch]

So we still haven't seen the source of the alleged "super-worried about the economy" comment?!? I suspect that did the most damage, and that seems to be the one thing we haven't seen substantiated in the correspondence.

 

[StarFoxisDown!]

So we still haven't seen the source of the alleged "super-worried about the economy" comment?!? I suspect that did the most damage, and that seems to be the one thing we haven't seen substantiated in the correspondence.

Yup..........still waiting

 

[mongo]

The most likely reason is Elon's insistently childish tweeting style about his "feelings" being "super bad" about the economy, a dour prediction about the future. Investors my fear there is bad new about Tesla's outlook coming ?

Elon didn't Tweet "super bad", he allegedly wrote an e-mail to execs saying that.
Reuters reported and then Tweeted about it.

 

[henchman24]

All those delivery and service people are already "back in the office". Not to mention, there's nobody in the world(Elon included) that thinks we have too many service and delivery people.

This herd that's going to be culled is Accounting, HR, management, random office people.

I’m completely sure that if Elon could find a way to eliminate delivery staff and just have customers pick up their car from a lot and Optimus for the paperwork he would fire them all in a heartbeat. But that’s not realistic today.

Even at those centers though there are managers, accountants, and other office staff.

 

[thx1139]

Yes, cutting 10% is something all mega-sized companies can, and probably need to do. Tell me why this is not helping, the stock price ??

The most likely reason is Elon's insistently childish tweeting style about his "feelings" being "super bad" about the economy, a dour prediction about the future. Investors my fear there is bad new about Tesla's outlook coming ?

Hopefully, the market figures it out eventually and this results in a recovery of the share price.

Yeah I dont think the layoffs are what causing the stock prices to drop. Companies dont always make great hires and you need to trim to hire who you think are better replacements. Of course you could wrong about that, but that isnt the point. Even the biggest growth high tech companies announce restructuring (layoffs) every so often and a year later the headcount is higher. It is the comment about the economy that is likely hurting the stock more than anything. It makes it seem like something in supply chain or demand analysis is not looking good.

 

[Gigapress]

What was your production estimate for Shanghai ?

I'd say EU sales will be down because Shanghai didn't produce much in May, most of which would have gone to EU, for eg.

When I last did the math on May 11th, I got 20k fewer deliveries from Shanghai relative to Q1. Elon’s comments on the earnings call on 4/20 were that Shanghai would produce around the same as Q1, probably “slightly less” with a chance of slightly exceeding Q1’s output.

Suppose we will have lost one month’s worth of Shanghai production in Q2 because of the COVID lockdowns. Elon just said yesterday that he was in talks with the Chinese government who have him a clear message that the lockdowns will not be an issue in the coming weeks, and meanwhile Tesla is operating at partial capacity. We lost two weeks in Q1, so the relative impact was 4-2=2 weeks extra in Q2. This would’ve been about 35k vehicles extra COVID-related production loss in Q2 over Q1.​

​

Production data shows that Shanghai had been ramping on a tight linear trend before the lockdowns began. They are completing an upgrade soon. It would not be surprising to see the remaining two month’s worth of production hitting 70k and 75k units each, effectively adding about 15k bonus units relative to Q1.​

​

So overall I would expect 15k - 35k = -20k change in Shanghai production in Q2 vs Q1.​

​

Anyway, I just hope the market isn't as bullish as you on Q2. I want market to assume a reduction in sales and a lower Q2 EPS. Anything better would be a plus.

If the stock price and earnings estimates are any indication, the market is much less optimistic than I am about Q2. Analysts have $2.16 average EPS forecasts.

Yahoo Finance

 

[StealthP3D]

It is something that just sorta happens when you get rich.

Um, no. I've been a self-made multi-millionaire for over two decades. My political self-identity didn't change significantly until Mary Barra led GM to greatness by becoming the leader in EV's and my political transformation did not complete until the most recent despicable remarks regarding the moon mission. It has nothing to do with money and everything to do with not being able to stomach being identified with what I'm seeing.

 

[ZachF]

Also oil at $120/barrel is a pretty reliable predictor of recession, but also a reliable predictor of increased demand for Tesla’s products and services.

Dollar is also a lot stronger than it was in 2008 when oil was $145/barrel, also there was a few dollar premium in US oil, that has reversed since then. In other currencies it’s a good deal above the 2008 high. Rough examples of 2008 vs now:

$145 → $118
€92 → €113
¥15,500 → ¥15,500
£72 → £95
$145 → $150

 

[TheTalkingMule]

I'm calling a $738.64 close.

 

[Accident]

That was my first reaction as well. But this is Texas, soon enough the grid will be awash is way too much excess solar/wind.

All Tesla needs to worry about in Texas is storage. Huge, massive gobs of storage. Hopefully they are also compensated appropriately for saving this trainwreck of a grid.

There's already a race to increase battery storage in TX. A total of 7,095MW have already been approved, and the projects are expected to be completed next year.

In addition there are projects in the study and planning phase totaling 38GW of storage. Not all of these projects will come online, but it seems to me that Ercot is on track to flatten the "duck curve" within a few years.

In my opinion, Tesla needs to ramp up battery deployment by next year in order to be a relevant player in TX.

Also, not sure if the size for the Giga Texas project was previously discussed, but according to Ercot it will be a 131MW project.

 

[StarFoxisDown!]

I'm calling a $738.64 close.

Sorry I had to laugh.

Unless the markets go from a down 2% to a up 2% in the next hour and a half, there's zero chance of TSLA recouping 3-4% of the loss it's at right now.

Odds are macro's could do a swing and TSLA would close right at 700 anyways.

 

[thesmokingman]

True, but in fairness . . . have you been around people getting their MBAs? They spend a lot of time at the bar. LOT of time. And apparently you can squeeze in an MBA during your spare time on nights and weekends.

It's funny though, Musk feels the same way about MBAs as Buffett feels about diversification. And here we have a bunch of MBA experts thinking they know how to run to Tesla better, lol.

 

[Xd85]

OT: meanwhile beta 10.12.2 has totally solved my left hand turns. No more unusable stuttering.

 

[Cherry Wine]

Yes, cutting 10% is something all mega-sized companies can, and probably need to do. Tell me why this is not helping, the stock price ??

The most likely reason is Elon's insistently childish tweeting style about his "feelings" being "super bad" about the economy, a dour prediction about the future. Investors my fear there is bad new about Tesla's outlook coming ?

Hopefully, the market figures it out eventually and this results in a recovery of the share price.

Because - right or wrong - the way the story was broken leaves open the interpretation that the cuts are due to any number of bearish factors: fears of anticipated drops in Tesla demand, brain drain fears, key man risk fears, etc. These can be argued against, but with the way the market has been jumping at its own shadow for almost six months now, with almost all news being interpreted through a bearish lens, I am not surprised by the reaction in the slightest. Not to mention, TSLA has lost its teflon status and become a very ripe target for bear raids.

 

[ZeApelido]

Internal thoughts: [Just got back from a long trail run in the hills above Tesla's former HQ that I could only do on the back of Tesla employees working hard in person to make my investment huge, and because I work from home.]

What did I miss?

 

[GrandEnigma]

Look at this not a TESLA that burst into flames after stalling on the highway.

Explains the share price today.