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

[Mirindi]

I know it's premarket non-sense, but there doesn't seem to be any stop on the way down for the stock. Not sure if I should cry or laugh.

 

[Discoducky]

NIO is also way down in premarket, so not just Tesla... FYI

 

[UkNorthampton]

Decrease in reservations may be due to Tesla banning resellers/touts from selling reservations:-

https://twitter.com/x/status/1607415361305210880

Can't edit. It's just occurred to me, if a lot of reservations were cancelled due to being thought to be resellers - would that mean that those reservations would have been at a lower price? If so, have deliveries which were reserved later, when prices were higher had an effect on Average Selling Prices, Margin etc.

Is this why Tesla put effort into weeding out reseller reservations? It's nice to have genuine direct customers rather than intermediaries, but it might also have a positive effect on income too. Thirdly, these resellers might be flaky & more likely to cancel reservations or just not good for genuine demand data, so excluding them provides better quality data for order flow, allowing better supplier planning & price tweaking.

 

[elasalle]

So are we gonna hit 420K delivery
Or $69 SP

 

[petit_bateau]

That's a longer slowdown than I would expect, particularly with no major upgrades known about. It would be useful to know if this is driven by supply chain issues, COVID issues, logistics issues or something else.

Berlin and Austin still appear to be ramping hard so it's unlikely to be an aggregate demand issue.

I agree it is longer than a simple Chinese New Year would normally be. The Chinese Covid wave is quite capable of causing all the things you note and more : supply chain; logistics; buyers; own-manufacturing/assembly.

*** It also indicates that Reuters has a functional source inside Tesla-Shanghai. ***

 

[EverettRuess]

Does Elon or anybody else at Tesla know of a public way they can communicate what is really going on?

 

[tslagreen]

Does Elon or anybody else at Tesla know of a public way they can communicate what is really going on?

He is too busy on "epic threads."

 

[MC3OZ]

I agree it is longer than a simple Chinese New Year would normally be. The Chinese Covid wave is quite capable of causing all the things you note and more : supply chain; logistics; buyers; own-manufacturing/assembly.

*** It also indicates that Reuters has a functional source inside Tesla-Shanghai. ***

An inside source might not have the full picture.

Generally it us best to maximize production, even if prices and margins need to be reduced.

It is better to ship cars overseas if local Chinese demand is not sufficient.

Hopefully we get some explaination during the earnings call

 

[mongo]

I agree it is longer than a simple Chinese New Year would normally be. The Chinese Covid wave is quite capable of causing all the things you note and more : supply chain; logistics; buyers; own-manufacturing/assembly.

*** It also indicates that Reuters has a functional source inside Tesla-Shanghai. ***

I don't know how much of a source one needs if a company informs their workers and suppliers of days off ahead of time.

As to the longer shutdown:
Standard national holiday is Jan 21-Jan 27 . That's a Saturday to a Friday.
Tesla is reportedly pausing Jan 20-Jan 31, a Friday through Tuesday. (Exclusive vs inclusive is yet to be seen).

It is better to ship cars overseas if local Chinese demand is not sufficient.

Which requires ships.
Port is packed, so pause production, get those moved, run for a couple weeks, pause, get those shipped, then (hopefully) C has reduced and normal shipping and buying channels return.

Ok, that's the last of my optimism.

 

[EverettRuess]

He is too busy on "epic threads."

I know this is The NY Times and they are liars. Front page.

A Shanghai hospital predicted half of Shanghai’s 25 million residents would eventually be infected and warned its staff of a “tragic battle” in the coming weeks, according to a now-deleted statement the hospital posted last week on the social media platform WeChat.

https://www.nytimes.com/2022/12/27/world/asia/china-covid-hospital-crisis.html

 

[Todd Burch]

Here are my thoughts:

If there is purely a demand problem in China for cars that *cannot be sold elsewhere*, why wouldn’t Tesla drop prices? They certainly have the margin to do it, especially since Elon recently said they prefer volume over profits and would sell a car at zero margin if need be.

So, I think a reasonable explanation is one or more of the following:

-Cars are getting shipped elsewhere which can sell for higher prices (e.g. Australia) that more than make up for the additional logistics costs.

-Covid-related problems, either with suppliers or at the Shanghai factory itself, are preventing Tesla from making more cars even if they wanted to.

-Tesla decided that with Covid problems, now would be a better time to do retooling (Highlander?) and other upgrades and pulled that work forward earlier than expected. Better to do this work now while there are external factors out of their control.

 

[soundart2]

So assuming that world is not ending tomorrow and TSLA will not become penny stock in foreseeable future ( both entirely believable potential outcomes if you spend more than 2 minutes on a certain social media platform) what could possibly happen based on few select prior TSLA drawdowns

In early 2016 TSLA fell -42% over 7 weeks then V shaped rally of +91% over next 8 weeks

In early 2020 TsLA fell -63.8% over 7 weeks then initial rebound of 2.48X off lows over next 6 weeks although it continued to march much higher for rest of 2020

In both cases upper weekly bollinger was hit before pullback


Currently TSLA so far drop is - 61.4% over 14 weeks and upper weekly bollinger sits at $335.71 which is 2.77X $121 (assuming $121 as bottom)

Whatever happens it will not be boring

Thanks for this. What's your strategy from here, TT?... Been following you on Twitter and seem to recall you got off margin maybe a few months ago (good move). As I explained in another thread, I am in the (much too late) process of biting the bullet today. Sadly sold a big chuck of shares in premarket, to hopefully buy back my underwater puts when market opens.

Probably foolish to think about trying to recoup these losses/lost shares, but the thought had crossed my mind of converting some shares to LEAPS awaiting the eventual slingshot back up. Will let things settle a bit, but just trying to thing about what alternatives are out there to eventually take advantage of big bounce back.

 

[tslagreen]

Here are my thoughts:

If there is purely a demand problem in China for cars that *cannot be sold elsewhere*, why wouldn’t Tesla drop prices? They certainly have the margin to do it, especially since Elon recently said they prefer volume over profits and would sell a car at zero margin if need be.

So, I think a reasonable explanation is one or more of the following:

-Cars are getting shipped elsewhere which can sell for higher prices (e.g. Australia) that more than make up for the additional logistics costs.

-Covid-related problems, either with suppliers or at the Shanghai factory itself, are preventing Tesla from making more cars even if they wanted to.

-Tesla decided that with Covid problems, now would be a better time to do retooling (Highlander?) and other upgrades and pulled that work forward earlier than expected. Better to do this work now while there are external factors out of their control.

Agree with everything you say, but the timing, of course, is awful. The bearish narrative, unfortunately, continues.

 

[Max Plaid]

An inside source might not have the full picture.

Generally it us best to maximize production, even if prices and margins need to be reduced.

It is better to ship cars overseas if local Chinese demand is not sufficient.

Hopefully we get some explaination during the earnings call

Earnings Call you say, checks watch... oh yes, another 5 weeks of information vacuum and FUD running riot...

 

[Buckminster]

At this point I really hope Tesla Shanghai shutdown is related to production line/hardware upgrade for the Model 3 revamp. We need good news

Highland sounds optimistic even for me. More likely H/W 4.0 - will require wiring harness changes etc.

 

[Max Plaid]

Here are my thoughts:

If there is purely a demand problem in China for cars that *cannot be sold elsewhere*, why wouldn’t Tesla drop prices? They certainly have the margin to do it, especially since Elon recently said they prefer volume over profits and would sell a car at zero margin if need be.

So, I think a reasonable explanation is one or more of the following:

-Cars are getting shipped elsewhere which can sell for higher prices (e.g. Australia) that more than make up for the additional logistics costs.

-Covid-related problems, either with suppliers or at the Shanghai factory itself, are preventing Tesla from making more cars even if they wanted to.

-Tesla decided that with Covid problems, now would be a better time to do retooling (Highlander?) and other upgrades and pulled that work forward earlier than expected. Better to do this work now while there are external factors out of their control.

Yes, any or all of this could be true, how about some clarification from, I don't know, Tesla themselves perhaps?

 

[Artful Dodger]

Lol, REUTERS... 970K shares traded during the 8:00 o'clock minute:

...putting the B00-spin on Giga Shanghai's annual Chinese New Year break. What geniuses. /s

I've mentioned this before:

- 5.75 % x 4 days == 'gap closed' to Aug 13, 2020.



Who ya gonna Call! ROTO-REUTERS!

 

[Cattledog]

It would be nice if Charlie Munger's recent admiration for Tesla/Elon, which coincides with TSLA's PE ratio approaching that of Berkshire Hathaway, would translate into a magnitude of share purchase of TSLA by BRK that coincides with that they did with AAPL years ago. Maybe an appreciation for the pricing power, growth potential and raw material acquisition foresight of the energy storage side of things will get them in the game.

 

[bballshinobi]

So we are a broken stock now… how many years before we reclaim $200? $300?

 

[OrthoSurg]

So assuming that world is not ending tomorrow and TSLA will not become penny stock in foreseeable future ( both entirely believable potential outcomes if you spend more than 2 minutes on a certain social media platform) what could possibly happen based on few select prior TSLA drawdowns

In early 2016 TSLA fell -42% over 7 weeks then V shaped rally of +91% over next 8 weeks

In early 2020 TsLA fell -63.8% over 7 weeks then initial rebound of 2.48X off lows over next 6 weeks although it continued to march much higher for rest of 2020

In both cases upper weekly bollinger was hit before pullback


Currently TSLA so far drop is - 61.4% over 14 weeks and upper weekly bollinger sits at $335.71 which is 2.77X $121 (assuming $121 as bottom)

Whatever happens it will not be boring

Is there difference of recovery potential in a bull vs bear market?