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

[H Mak]

Q3 earnings is no guarantee for anything... what if EPS is a "miss" by Wall Street's opinion, what if it's a technical "beat", but not by enough? What if Tesla revise guidance downwards, even by a little bit? What if they announce a further delay to the CyberTruck?

I personally recall many Tesla earnings that were a solid beat, all on track, amazing, and yet the stock went down...

I do agree that the stock is horribly oversold, but I think it's the same for almost every stock on the market right now, and I don't see an FED pivot coming this side of Xmas

It's never a "given", plus we still have the spectre of Musk potentially selling stock after the ER

So yeah... been kicked in the face sp many times over the years with this one that I'm a tad cynical

Spot on.
The earnings presentation should be viewed as a way of monitoring the underlying progress of the company, rather than a price triggering event.

 

[Nolimits]

Keep expectations low.


Hoping on q3 ER they announce next factory in US or NA. Preferably in a good climate conducive location now that gigapress has me all worried. Next they can explain their 4680 ramp up, announce more battery plans…

Also, Just release The CT already! Show off CT exoskeleton from their new 9000 ton Idra toy?

 

[OrthoSurg]

Keep expectations low.


Hoping on q3 ER they announce next factory in US or NA. Preferably in a good climate conducive location now that gigapress has me all worried. Next they can explain their 4680 ramp up, announce more battery plans…

Also, Just release The CT already! Show off CT exoskeleton from their new 9000 ton Idra toy?

The problem is wallstreet espectations during a bear market.

They seem to never be satisfied.

The stock is acting like Peloton who went -30% after they announced they stopped production of their bikes because they had too much for the next 6 months. They dropped -30% overnight. TSLa dropped 30% on Elon buying Twitter and Shanghai waiting list reduced from 1 year to 1 month.

 

[Max Plaid]

The problem is wallstreet espectations during a bear market.

They seem to never be satisfied.

The stock is acting like Peloton who went -30% after they announced they stopped production of their bikes because they had too much for the next 6 months. They dropped -30% overnight. TSLa dropped 30% on Elon buying Twitter and Shanghai waiting list reduced from 1 year to 1 month.

To be fair, waiting dropping from 1 year to 1 month, looks alarming and other than strong September CN deliveries, I haven't seen anything that directly refutes the demand worries. Until Tesla state that they have no demand issues, the markets will assume they do

And if Tesla do have demand issues, then they can pull some levers, reduce prices, ship to other markets

Best of all they can pull their finger out with the CT and get Model Q out there - demand for a well-price, small Tesla would be almost unlimited IMO

 

[samppa]

To be fair, waiting dropping from 1 year to 1 month, looks alarming and other than strong September CN deliveries, I haven't seen anything that directly refutes the demand worries. Until Tesla state that they have no demand issues, the markets will assume they do

And if Tesla do have demand issues, then they can pull some levers, reduce prices, ship to other markets

Best of all they can pull their finger out with the CT and get Model Q out there - demand for a well-price, small Tesla would be almost unlimited IMO

China local waiting lists have always acted like that - when they are producing cars for export early in a quarter the list gets really long, then when they switch to local cars and deliveries, it's only natural for wait list to go shorter.. and Shanghai is producing a ton of cars atm.

Model Y was the best selling car of all cars in Germany in September with a bit under 10k cars. Thats what, like 2 days of production of giga shanghai?

of course, to assume that WS would understand this, is fooling oneself..

 

[unk45]

Tesla can always use their excess cash to build more batteries, and deploy these in grid batteries. If it is profitable to do so for a utility company, it is even more so for Tesla because they only pay the production cost of the battery system. I think Elon‘s master plan part 3 will go in that direction. Not necessarily in operating their own battery parks, but in deploying their massive cash position into something useful.

Tesla paid off on the order of $10B in long-term debt over the past 12-18 months, which was all done since the last equity offering of $5B on Dec 8, 2020. Further, all that debt was retired out of the proceeds of ongoing FCF, without substantially drawing down Tesla's cash balance.

I suggest you redo your analysis to include that exta $10B left in cash instead. This is a truer picture of Tesla's FCF. Now that the long-term debt is all retired, the question becomes how to allocate that cash.

At least some of that cash could be switched from paying down debt into share buybacks. It's a simple ROI problem: Cash converted into TSLA shares (after all capital projects and R&D programs are fully funded) gives far better returns than leaving that cash unused.

i disagreed because of the factors @Gigapress so eloquently described. Even more the geopolitical risks exacerbate the natural disaster risks. TSLA is cash rich precisely because Elon and Zach understand all those risks. Further, even distinct from those are supply chain disruption from other causes including shipping constraints, Suez and/or Panama canal disruption.

Apart from those there are serious economic risks in numerous countries that can constrain sales, deliveries and supplies.

There is not any reason to panic. There is every reason to be carefully managing cash, more so than ever now. Bluntly, share buybacks now are incredibly stupid when they will do nothing much other than reduce liquidity, just when more liquidity is needed.

Others have not yet mentioned financial system risks, independent of all the other things, for example:

Is Credit Suisse the Lehman Brothers of 2022?

Key questions at the heart of the turmoil being compared to a potential “Lehman Brothers moment.”

fortune.com

Deutsche Bank looks to escape a decade of scandal and strife

For Paul Achleitner’s successor the priority will be restoring the financial health of the German lender ahead of a round of European banking mergers

www.ft.com

Please, remember that it was only a few years ago, 2008, when the global financial system neared collapse and the entire US system was rewritten as Merrill Lynch, Bank of America, Bear Stearns and Long Term Capital Management all failed carrying with them AIG and numerous others, which all ended with partial nationalization of the majority of the US financial system.

Remember that today the US government is pursuing a clearly anti-China policy that adds to TSLA risk.

So, for TSLA and all of us, very high liquidity is just barely enough. It would be irresponsible to change a policy that has proven to be of inestimable value. I sincerely hope Tesla augments the cash reserves in these circumstances.

After all, lack of liquidity is the singular cause of business failure.

 

[unk45]

I cannot edit at the moment

i disagreed because of the factors @Gigapress so eloquently described. Even more the geopolitical risks exacerbate the natural disaster risks. TSLA is cash rich precisely because Elon and Zach understand all those risks. Further, even distinct from those are supply chain disruption from other causes including shipping constraints, Suez and/or Panama canal disruption.

Apart from those there are serious economic risks in numerous countries that can constrain sales, deliveries and supplies.

There is not any reason to panic. There is every reason to be carefully managing cash, more so than ever now. Bluntly, share buybacks now are incredibly stupid when they will do nothing much other than reduce liquidity, just when more liquidity is needed.

Others have not yet mentioned financial system risks, independent of all the other things, for example:

Is Credit Suisse the Lehman Brothers of 2022?

Key questions at the heart of the turmoil being compared to a potential “Lehman Brothers moment.”

fortune.com

Deutsche Bank looks to escape a decade of scandal and strife

For Paul Achleitner’s successor the priority will be restoring the financial health of the German lender ahead of a round of European banking mergers

www.ft.com

Please, remember that it was only a few years ago, 2008, when the global financial system neared collapse and the entire US system was rewritten as Merrill Lynch, Bank of America, Bear Stearns and Long Term Capital Management all failed carrying with them AIG and numerous others, which all ended with partial nationalization of the majority of the US financial system.

Remember that today the US government is pursuing a clearly anti-China policy that adds to TSLA risk.

So, for TSLA and all of us, very high liquidity is just barely enough. It would be irresponsible to change a policy that has proven to be of inestimable value. I sincerely hope Tesla augments the cash reserves in these circumstances.

After all, lack of liquidity is the singular cause of business failure.

i cannot edit at the moment. Here si a free link to the FT article:

Deutsche Bank looks to escape a decade of scandal and strife

For Paul Achleitner’s successor the priority will be restoring the financial health of the German lender ahead of a round of European banking mergers

on.ft.com

 

[JRP3]

And how they have single handedly ruined all the positives Tesla has accomplished this year.

Let's get real, they had help from Elon unfortunately.

 

[30seconds]

Q4 earnings is going to be lit. We are going to see big jumps in EPS this quarter and more so next. So as long as Elon can stay out of additional major trouble that is.

 

[canoemore]

Guessing CPI came in hot...

 

[juanmedina]

 

[NooB_cat]

 

[Mengy]

Guessing CPI came in hot...

So very hot. Expect another super red day, we are doing down even lower. Will we drop under $200 per share? Who knows, but I'd say it's possible.

 

[traxila]

Guessing CPI came in hot...

It really didn’t. Off of expectations by 0.1 and 0.2.

Nothing changes at all. The markets obviously know that we are getting another 125 basis points this year. They have known this for at least three weeks. Today’s numbers could only have mattered if it came crazy low, which everyone already knew could not happen as they are all tracking the components on a daily basis.

Inflation has peaked and will continue to grind down over the next nine months short of oil prices spiking to 150 - 200. Can’t say when it will hit 2%.

This is premarket fear mongering by the bears who are in control. There is no guarantee that we even close red on the day.

Buying the news at this point would make sense with oversold conditions. This is all short term stuff I am talking about. Can’t speak to a month from now.

Not an advice and hang in there everyone.

 

[UncaNed]

Also, Just release The CT already! Show off CT exoskeleton from their new 9000 ton Idra toy?

IDRA casting press machines don't make exoskeletons.

I've been wondering, what the heck do they really need the 9000 ton press for to make the Cybertruck? It's supposed to need bending machines to origami the flat stainless sheets into body shapes, not load-bearing castings like an H-beam truck or auto. It bothers me hearing that IDRA presses make the "body" of the car when the body of most cars is stamped sheet metal.

I wonder how to move this post to the engineering thread?? Can I do that myself?

 

[MrMoo]

It really didn’t. Off of expectations by 0.1 and 0.2.

Nothing changes at all. The markets obviously know that we are getting another 125 basis points this year. They have known this for at least three weeks. Today’s numbers could only have mattered if it came crazy low, which everyone already knew could not happen as they are all tracking the components on a daily basis.

Inflation has peaked and will continue to grind down over the next nine months short of oil prices spiking to 150 - 200. Can’t say when it will hit 2%.

This is premarket fear mongering by the bears who are in control. There is no guarantee that we even close red on the day.

Buying the news at this point would make sense with oversold conditions. This is all short term stuff I am talking about. Can’t speak to a month from now.

Not an advice and hang in there everyone.

The amount of copium in this post is so strong. I literally thought the same thing last month when we also missed the CPI by 0.1. Just remember that, last month we were off by expectations by 0.1 as well.

 

[2daMoon]

The amount of copium in this post is so strong. I literally thought the same thing last month when we also missed the CPI by 0.1. Just remember that, last month we were off by expectations by 0.1 as well.

There's logic , there's reason , but then...

there's the market. ​

 

[Nocturnal]

Gee, it's almost like interest rates can't increase the supply of oil, or workers, or lack of chips. This is like having 4 kids who are hungry and instead of finding more food, you just kill one so the rest have enough.

 

[CLK350]

Real life data point. Margin cushion 9.25% remaining - and I thought I was being conservative ;(

Now I may have to really scramble for mo' cash. Anyone knows what IBKR's modus operandi is? Do I have a 1 day respite or are they going to automatically liquidate if margin gets to zero? Or should I transfer cash right away? (not advice accepted)

Now to check on Schwab's margins. Any hints -not advice/ advice - there too galdly accepted.

 

[traxila]

The amount of copium in this post is so strong. I literally thought the same thing last month when we also missed the CPI by 0.1. Just remember that, last month we were off by expectations by 0.1 as well.

Talking about short term moves. Already said we may well be lower a month from now.

My point is these ‘hot readings’ are rounding errors at this point. The importance of them lies in what the FED will do, but the FED is already a known quantity. We are definitely getting 125 basis points this year. Known quantities are not usually what moves the market hard in the short term. Fear mongering certainly does.

There is no way to know what the CPI reading will be in December, but it will be at that time that continued misses may translate into more and higher rate increases, in which case more panic selling would make sense.