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

[Usain]

Yahoo! Finance has lowered their EPS Consensus a couple of pennies to $1.01.

For reference:
- Tesla sold 310,048 EVs in Q1 2022 resulting in actual EPS of $1.07.
- Tesla sold 343,830 EVs in Q3 2022 resulting in actual EPS of...
I expect another significant Beat in the cards coming right up.

View attachment 863569

I don't understand where these low earnings estimates are coming from. What do their models show?

 

[TheTalkingMule]

You want lower estimates. I'd be very happy if we can dip another penny or two to get below $1.

 

[CLK350]

So Twitter is spending their time trying to gather more documents to use against Elon to make him purchase Twitter, when he has already said he wants to follow through with the deal on the original terms.

Shouldn't they be working with him to complete the purchase by the 28th like the judge has given them time to do?

I don't understand what they are up to. Are they trying to find some way to cancel the deal that isn't their fault? (Are they afraid Elon will find out and release bad information on them, and what they have done at Twitter, once he takes over?)

I recall seeing somewhere that Twitter wanted some clause added* before accepting Elon's offer, but that Elon steadfastly refused.

Guessing here, they (Twitter's board members) don't want some dirt coming up tarnishing their image or worse some lawsuit for (?). So they want a clause assuring Elon will stop any investigations into their past (likely) wrongdoings/ either legal or plain managerial.

Possibly also using any time they have w/ delays to clean up the skeletons in the closets.

Fascinating multi faceted soap opera/ real life drama - really wish Elon's current biographer would publish a monthly gazette explaining what is going on ..

 

[TheTalkingMule]

Max pain indicates a $225 call wall needs protecting today. Let's see how it goes.

 

[ZachF]

Macro: the European collapse in their terms of trade continues unabated.

https://twitter.com/x/status/1580894101029150720

Not only is their energy import bill skyrocketing, but having the highest energy costs in the world on top of the highest regulatory and tax burden in the world has made the competitiveness of their non-oil sector collapse as well.

 

[traxila]

There must be a way for the US to make nice with EU over this, otherwise the EU wouldn't be bothering much with any pretence of talks (except for brief enough ones to log as a charade for the pre-action protocol).

So what's the way ?

EU has to be acknowledged as a free trade partner with USA regarding automobiles and batteries. That would probably mean both sides would have to stop all protectionist tariffs, or perhaps they could both agree that they do not matter for the purposes of the IRA and declare the industry as a feee trade zone.

Don’t know if any of this is possible, but I do not see how else they could do it without changing the law.

 

[hacer]

Elon's 2018 CEO compensation plan will result in 9% new shares on or by Jan 20, 2028. Basically 5 years from now at a present value $67 Billion.

Any impacts of a less than 2% per year buyback will be undone by the level of 2028 dilution.

To really impact things, Tesla needs to pay Elon in existing shares; but again, $67B needed today. Debt might be difficult as the funds will flow out rather than increase the company coffers/ value. However, perhaps they can finance a large buyback now (keep shares that have value), and pay Elon with them later (debt paid down). Still transitory, but eventually less dilution. Helps shareholders, but not Tesla.

Have all of the milestones of the 2018 plan been met already?

 

[FEERSUMENDJIN]

Creating the Robotaxi fleet is going to take insane amounts of cash. My estimates are in the low trillions worldwide over the first few years [1]. Some of this will come from third parties buying teslas and joining the Tesla Network, but much will be internal Tesla investment.

I would much rather any spare cash be used to create the Robotaxi fleet than used for buybacks.

Indeed my worry is that Tesla has too little cash to fully take advantage of the Robotaxi opportunity. There will be a limited window when FSD is working, but rival systems are not (or are too expensive or not scalable). Reductions hardware costs, improvements in AI algorithms/training and the example of FSD to show what works, mean that effort required to create a rival robotaxi will be much, much less in 10 years.


[1] Assume 1.4 billion cars, half of which can be replaced by Robotaxi, each Robotaxi replaces 10 private cars. So 70 million Robotaxi required. Each Robotaxi is $50,000 including overheads, so $3.5 trillion is needed to build out the Robotaxi fleet. Lots of reasons why Tesla will not need all that in cash: competition reducing market share, revenue during rollout, third party investment through Tesla Network, still it drawfs the amount of cash Tesla has on hand at present.

Do not think the world is ready for a single corporate only owned robotaxi fleet. The money printing from the Tesla network purchases will be insane, and the Robofleet will be funded in a wedge fashion from this. Having mass ownership of the Tesla Network keeps it more tolerable in society, but I would imagine this would diminish in time.

 

[Krugerrand]

You want lower estimates. I'd be very happy if we can dip another penny or two to get below $1.

Right!?

I don’t get the angst over WS being too low on anything they estimate. It all has a better chance to help US. We do care about US, right? Yes, of course we do. I’ve just read 83 pages of self care writings.

Angst when WS is too high. Angst when WS is too low. FFS. You’re all more exhausting than a puppy that has to be potty trained.

383,000 for Q4 is the number people. Spread the word.

 

[ZachF]

Right!?

I don’t get the angst over WS being too low on anything they estimate. It all has a better chance to help US. We do care about US, right? Yes, of course we do. I’ve just read 83 pages of self care writings.

Angst when WS is too high. Angst when WS is too low. FFS. You’re all more exhausting than a puppy that has to be potty trained.

383,000 for Q4 is the number people. Spread the word.

383k? But Gordo says demand is collapsing… it’s obviously only 330k

 

[ZachF]

Interesting thread on Biden’s semiconductor sanctions, has relevance to AI computing and self driving cars:

https://twitter.com/x/status/1580889341265469440

 

[oldTAVguy]

383k? But Gordo says demand is collapsing… it’s obviously only 330k

You have that backwards it's 033K. Did you not read that Tesla is shipping them to the bottom of the ocean this quarter.

EDIT: /S (because some of the trolls just don't get it)

 

[mongo]

Have all of the milestones of the 2018 plan been met already?

11/12 have. All that remains is $75B in revenue over previous 4 quarters. That will happen in Q3 if revenue is over $21.6 Billion. Otherwise in Q4 as Q4 '21 was $17.7B.

 

[CLK350]

The reason why I allegedly 'dodged the issue is because it is nonsensical.
First: There is no such thing as "The Federal Reserve Bank". There are twelve of them, 24 branches, each owned by member banks in their districts.

As for monetary policy, open market operations are primarily conducted by the Federal Reserve Bank of New York.
Federal Reserve Banks buy and sell US treasury obligations.
When they lend money to banks the banks pay interest. When they have US treasury obligations they receive interest.

Perhaps your mistake stems from not understanding the role of the system itself. The Federal Reserve Banks do remit profits to the US Treasury:

Federal Reserve Board announces Reserve Bank income and expense data and transfers to the Treasury for 2021

The Federal Reserve Board on Friday announced preliminary financial information indicating that the Reserve Banks had estimated net income of $107.8 billion du

www.federalreserve.gov

That is absolutely nothing like the idea that there is some kind of 'forgiveness' involved. There is nothing like that. When losses happen at Federal Reserve Banks those reduce earnings.

I probably should have explained, but did not because the thesis was so wrong that I though you were joking. I apologize.

For the record: Nearly everything about the Federal Reserve System, individual Federal Reserve Banks and even the minutes of the Federal Open Market Committee are public records. Nobody who really wants to know needs to invent strange theories. Just look it up.
The document I linked comes from the Federal Reserve website. There are documents on every conceivable issue there. There are also links there to each of the Federal Reserve Banks.

FWIW, you grossly misunderstand to whom Federal Reserve Banks charge interest. Please, please study about the system if you're posting about it. They make ZERO, ZILCH, NADA on loans to anybody other than Member Banks and eligible securities. They do NOT deal wit the general public. Succinctly, they are Central Banks, not commercial ones.

What all this has to do with Tesla I do not know. If somebody really wants to pursue all this in gruesome detail I suggest we have a dedicated thread, preferably dealing with Tesla Treasury management issues also. Those are really interesting and this is yet another one of the areas in which Tesla is far above nearly all corporations.

Maybe dispensing with all the fine print and legal/ political declarations open or not, thinking from first principles and looking at the big picture might help understand why we have such a dysfunctional economy (and stock market).

PS. This is relevant as Elon just pointed out our out of control deficit spending -

https://www.usdebtclock.org/

the private consortium (the Feds) can print as much money out of thin air - but they can't print TSLA shares out of thin air.

https://twitter.com/x/status/1580557095232950273

 

[Artful Dodger]

Have you ever taken the time to actually read the "Risk Factors" section of Tesla's 10-K filing?

Haha, yes, back in January. But you're suddenly worried about 'risks' on the day Tesla sets a 52-wk Low? Twitter much?

Advice: don't overthink things. Shortzes are making book by emphasizing the negatives, and amplifying the dips. That's how they steal shares from weak longs. Don't do their work for them (or let them live rent-free in your head).

This is BAU for TSLA. That's how the sausage is made.

HODL.

 

[vikings123]

CNN out with a report that SpaceX says it won't pay for Starlink in Ukraine anymore.
Of course, the headline is Musk's SpaceX won't pay.

Not linking to article, but expect more anti-Elon news going forward.

Just be glad they did not put TSLA in that headline. Tesla's Musk won't pay for SpaceX terminals.

 

[Drax7]

Surviving the present economic downturn should be the top priority.
Thereafter , once the economy is stable and recovering, buybacks
may make more sense.

 

[Nocturnal]

Damn he keep giving me hope for a Cyber Roadster.
Don’t need sub 2sec performance, just make a low-to-the-ground Cyber shell, jam in Model 3 guts, castings + structural pack, same screen and seats etc, make it a 2 seater, with sliding targa roof, that will be perfect.
One can dream, can’t I.

Shut up and take my money. If it had better cooling and maybe 500lbs+ less weight it would be an absolute track monster. Stainless would keep it looking nice to.

 

[Knightshade]

I recall seeing somewhere that Twitter wanted some clause added* before accepting Elon's offer, but that Elon steadfastly refused.

Not quite.

Twitter wanted.... the original deal both parties signed and agreed to. That's it.

Elon tried to negotiate a CHEAPER deal in recent weeks- and of course twitter asked for additional clauses then- that's how negotiations work-- if you want a lower price you have to give the other side something to agree to it. No deal was reached, so Elon said Ok I'll agree to buy at original price- but when motioning the court to dismiss added a couple caveats to said offer. Twitter (and the chancery judge) said no to that too because again twitter wants the original deal. The judge basically said "If you haven't closed the original deal by 10/28 you need to let me know so I can set a new court date to go to trial in November" without any of the caveats Elons original motion tried to insert.

The original deal was supposed to close within 2 business days of the twitter shareholder vote- which happened about a month ago. The only person who has caused this deal not to be closed on time per original terms is Elon (and there's a variety of theories about why).


I'll remind this thread there's a whole other one where discussion like this goes:

Elon & Twitter

Source is Business Insider https://t.co/yokZFkSzbJ “MVP runs venture capital funds with more than $1 billion in assets, according to its website. It also specializes in secondary market transactions, where existing startup shareholders and employees sell their private stock to get liquidity...

teslamotorsclub.com

 

[EVMeister]

Surviving the present economic downturn should be the top priority.
Thereafter , once the economy is stable and recovering, buybacks
may make more sense.

I don't know the specifics, but I watched a video on YouTube from "Tesla Boomer Mama" / Alexandra Merz (with Warren Redlich) where she suggested it might make sense to initiate the buyback before the end of the year. Apprently some new rules come into play in Janaury 2023 which will make it more costly to initiate? Again, I'm a bit hazy on this detail but Warren (who is against the buyback) found this particular argument compelling. The buyback can also be spread out over a very long period and the company has a lot of flexibility with how it works once "executed". This is the video if anybody is interested:

Edit: Around 29 minutes in Alexandra explains that a 1% excise tax will apply to all share buybacks due to IRA, from January 2023.