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

[TrendTrader007]

I know It’s a dangerous thing to engage in fantasy
But what happens if P&D #s beat big time?
No need to answer this rhetorical question
We’ll find out in less than 2 hours

 

[Bouboule]

I'd go as far as to say that anyone who thinks this wasn't considered during the drafting of the IRA, and long before it was handed to Treasury, is naive.

There are many more "good" reasons to have done it this way. Not only does it support the unspoken policy of shunning Tesla, it also restricts the lion's share of recipients by the benefit not being applicable to the largest selling EV. This saves on budget costs for the program as a whole, and significantly reduces the impact of the IRA on the economy. The results can be spun in a way to bolster the optics for the incumbents in the coming elections. Then, there are the boons offered the legacy OEMs and Unions who are the darlings of the system for their steady contributions to campaigns over the decades.

Honestly, anyone who wasn't expecting this to work out this way simply haven't been paying attention.

Edit: Likewise, anyone who doesn't believe Tesla can quickly pivot to make lemonade from the lemons being provided has also not been paying attention.

If both your comment and your edit is true, then they also know that Tesla will adapt. The IRA is probably designed to say to the OEM, « look we tried, but we just can’t change the rules every time Tesla adapts to the new rules»

 

[Mengy]

I know It’s a dangerous thing to engage in fantasy
But what happens if P&D #s beat big time?
No need to answer this rhetorical question
We’ll find out in less than 2 hours

That's easy:

If P&D numbers beat big time, then TSLA will drop harshly on Tuesday.

HOWEVER, if P&D numbers come in below expectations, then TSLA will drop harshly on Tuesday.

 

[AMN]

That's easy:

If P&D numbers beat big time, then TSLA will drop harshly on Tuesday.

HOWEVER, if P&D numbers come in below expectations, then TSLA will drop harshly on Tuesday.

Eventually, we will reach the tipping point....

Most of Wall Street hates Musk and anything related to him. However, more than they hate Musk, they hate losing to each other. They are sharks and will stab each other in the back while competing for new capital. We are at the point of no denial of Tesla's ability to print money....

 

[Gigapress]

No need to see conspiracy theories, or even antagonism...the most likely reason why it wasn't discussed on this forum is simply because until the draft proposed guidelines were released, no one on this forum spent the time to properly research the various classification schemes in depth to truly understand the range of possibilities. There was a general consensus here that matched what many here wanted the outcome to be, and humans typically question things less when they are hearing the answer they want to be true...

We did discuss it here pretty extensively. Maybe you missed it. @mongo @AndrewZ
and I dug through the EPA classification definitions months ago and shared here. My error in concluding that the Y would be eligible was in thinking that the requirement for 3-row standard equipment would apply to the entire Y family and not only those actually sold with the 3rd row. This was partially because the EPA website and fueleconomy.gov simply lists the Y as an SUV without distinguishing between the 2-row and 3-row version.

By the way, I remember three weeks ago you sent a big message to an off-forum group chat with several of us in which you said that you sold all your TSLA stock due to Elon Musk making it an “uninvestable security” and said you weren’t going to post here any more because “being in an investor forum without being an investor would be poor form” and might come back if someday you invest again. Then last week you started posting again. This has been a rather abrupt change and I’m wondering how your thinking has evolved so quickly.

 

[capster]

…
bulls should shud up about buyback, it’s too short term in thinking

…

I’m not particularly interested in the short term effect of a buyback.

I am very interested in the anti-dilutive effect of a buyback: Each share is worth a bit higher of a percentage of the company after a buyback. That is a long term effect.

Further, I don’t think a buyback is needed to trigger a rally. Tesla will rally sooner or later this year, perhaps violently, without one. Who knows? That rally may even start tomorrow.

Anyone would be a fool to be unhappy buying at the current share price, even if it were to go down a bit more.

If the Tesla BOD wants to wait on a buyback, that’s fine with me. If a buyback is on the table though, I hope Tesla has bought or will buy calls in order to lock in today’s low share price.

 

[mongo]

Generalized reply to many posts:

The Y:

• The seven seat carve out circa 2009 is the only reason a Y qualifies. It fails the off-highway criteria of a light truck. Its approach and departure angles are less than half the requirement. For comparison: it is only about 2 inches longer with one inch more ground clearance than a Model 3. The S formerly had 7 seats, was it an SUV?
• The Y does have immensely more interior and cargo room. One might say, more utility or room for sports equipment

Treasury:

• People did dive into the minutiae of current law before the recent Treasury release (see old discussion of station wagon vs SUV)
• Until the Treasury released their guidance, there was nothing to push against since...
• They had wide latitude to choose criteria from Department of Energy, EPA, and/ or current legislation
• The recent release is not final, so they can still adjust before March
• Treasury could arguably change things such than none of the Y qualify (amplify off highway, or frontal area requirements) or that all do (amplify cargo room requirements)

 

[ByeByeJohnny]

I’m not particularly interested in the short term effect of a buyback.

I am very interested in the anti-dilutive effect of a buyback: Each share is worth a bit higher of a percentage of the company after a buyback. That is a long term effect.

Further, I don’t think a buyback is needed to trigger a rally. Tesla will rally sooner or later this year, perhaps violently, without one. Who knows? That rally may even start tomorrow.

Anyone would be a fool to be unhappy buying at the current share price, if it were to go down a bit more.

If the Tesla BOD wants to wait on a buyback, that’s fine with me. If a buyback is on the table, I hope Tesla has bought or will buy calls in order to lock in today’s low share price.

I should know this but ...

Is it allowed for a company to own it's own stock? Could Tesla buy it's own shares, not retire them, and keep the value on their books? Could be very profitable if they buy now. A bit risky but compared to crypto during a pandemic I don't see it as any riskier. I guess there would be restrictions as to when they could sell so not always possibly to go back to cash quickly?

 

[Mike Smith]

I should know this but ...

Is it allowed for a company to own it's own stock? Could Tesla buy it's own shares, not retire them, and keep the value on their books? Could be very profitable if they buy now. A bit risky but compared to crypto during a pandemic I don't see it as any riskier. I guess there would be restrictions as to when they could sell so not always possibly to go back to cash quickly?

For a company owning their own shares and retiring shares is the same thing. They can re-create the shares they're retiring out of thin air whenever they want.

 

[colettimj]

Supercharger data through the end of 2022 for North America. Record number of new locations and stalls for any quarter and for any year.

(Disclaimer: data was pulled from supercharge.info, which is not official data from Tesla)

New locations per quarter

New stalls per quarter

Some tidbits from the underlying data:

• Tesla has averaged > 10 stalls per location for each year starting in 2018 (although some quarters average less than 10)
• The last 150 kW install in NA was on 12/11/2020. All since then have been 250 kW (v3) and 72 kW (urban chargers)

 

[Cosmacelf]

I should know this but ...

Is it allowed for a company to own its own stock? Could Tesla buy its don’t think own shares, not retire them, and keep the value on their books? Could be very profitable if they buy now. A bit risky but compared to crypto during a pandemic I don't see it as any riskier. I guess there would be restrictions as to when they could sell so not always possibly to go back to cash quickly?

I don’t think that’s a thing. That would enable a stealth way to do a secondary share offering without having to file a prospectus. I could be wrong, but that’s my reasoning…

Edit: Meaning the company can only retire shares in practice.

 

[capster]

I’m not particularly interested in the short term effect of a buyback.

I am very interested in the anti-dilutive effect of a buyback: Each share is worth a bit higher of a percentage of the company after a buyback. That is a long term effect.

Further, I don’t think a buyback is needed to trigger a rally. Tesla will rally sooner or later this year, perhaps violently, without one. Who knows? That rally may even start tomorrow.

Anyone would be a fool to be unhappy buying at the current share price, even if it were to go down a bit more.

If the Tesla BOD wants to wait on a buyback, that’s fine with me. If a buyback is on the table though, I hope Tesla has bought or will buy calls in order to lock in today’s low share price.

To clarify, I’m not advocating one way or the other on a buyback.

If the Tesla BOD thinks directing money towards further growth rather than do a buyback is the better way to go, I’m fine with that.

 

[InTheMiddle]

We did discuss it here pretty extensively. Maybe you missed it. @mongo @AndrewZ
and I dug through the EPA classification definitions months ago and shared here. My error in concluding that the Y would be eligible was in thinking that the requirement for 3-row standard equipment would apply to the entire Y family and not only those actually sold with the 3rd row. This was partially because the EPA website and fueleconomy.gov simply lists the Y as an SUV without distinguishing between the 2-row and 3-row version.

By the way, I remember three weeks ago you sent a big message to an off-forum group chat with several of us in which you said that you sold all your TSLA stock due to Elon Musk making it an “uninvestable security” and said you weren’t going to post here any more because “being in an investor forum without being an investor would be poor form” and might come back if someday you invest again. Then last week you started posting again. This has been a rather abrupt change and I’m wondering how your thinking has evolved so quickly.

Interesting - I will spend some time later today finding / reviewing that prior discussion and considering how that compares / contrasts with the draft proposed guidelines announced, and thoughts on what final determinations are likely to be in a few months.

As for the latter, I would say my thinking has most evolved in the sense of a greater bias towards fixing the problem.

OT personal note: After exiting my TSLA position a bit ago (selling my last blocks of shares about 7 weeks ago) for various reasons, I began to buy back in, picking up 20k today to begin rebuilding TSLA's place in my portfolio. Tesla (the company) is obviously in good shape with a bright future ahead of it, albeit with a few major risks to keep an eye on. TSLA as an investment still has far too wide a range of outcomes for me to generally consider investing in it, but frankly, at this point I may be looking more at wanting voting shares than wanting investment $ return, although both would be nice. Here's looking forward to the P&D report and earnings call, and most especially the annual meeting in just a few short months.

My goal at this point is to get the right CEO in place at Tesla to ensure The Mission is achieved to the greatest extent possible at the fastest rate possible. To be clear, my first choice would be for that CEO to be that "Right CEO" to be the Elon-of-old, as noted in this prior post.

Your YouTube links accurately show what I believe were top of his mind thoughts 3 and 6 years ago (at least, posted to YT 3 and 6 years ago). Many on here (myself included) have followed him far, far longer. On this board is much discussion of the future (P&D numbers, EPS $, Share Price $, etc) based not on static “today” state but on both the first and second derivative of how things have changed over time, and how the rate of change has changed over time, and what that means we expect the future state to be.

I for one greatly, greatly miss that Elon from your two YT links more than this post could ever capture…I appreciate that trip down memory lane, albeit in a sad kind of way.

If that Elon-of-old is an option, I would wholeheartedly embrace it with great joy and vote in favor of that; reality is that there may or may not be any Mr. Musk options, old or new, for Tesla going forward. As I mentioned here, there is no shortage of qualified top talent within Tesla's executive ranks already who could provide the leadership for the next stage of Tesla's growth and development.

...

4. This would be best-case scenario, but barring that, perhaps handing over the CEO title. No shortage of qualified top talent within Tesla already, although the one name most recently discussed would be quite problematic IMHO.

5. This is already a done deal, but yes, more discussion of timing, etc for it would be very appreciated and welcomed by the market and those of us who have reservations. This and #2 are the two I give the greatest likelihood of coming true.

6. I would actually be a fan of expanding the board, if for no other reason than to increase the % of truly independent directors. They need not have deep experience in either tech or EVs, as those are already Tesla strengths; rather, new independent directors should bring strengths to support areas Tesla is less strong in already.
...

TLDR: I am hopeful (perhaps too optimistically) that my voting shares for any future CEO compensation plan, Tesla and shareholder proposal(s), and the Board of Directors themselves can in some minor way increase the chances of the right CEO being in place long term.

 

[wipster]

To quote the late great Tom Petty,
"The Waiting is the Hardest Part"

 

[thx1139]

Surprised Tesla website not updated at all with the new pricing with tax credits yet.

 

[Snerruc]

People complaining about the leasing regs put out by the administration should remember that the EU has complained about the IRA and threatened to take it to the WTO. Since it’s impossible to modify the law in the current Congress, this may be the work around to avoid a fight with the EU. Tesla probably didn’t even come up in the discussions.

 

[ByeByeJohnny]

I don’t think that’s a thing. That would enable a stealth way to do a secondary share offering without having to file a prospectus. I could be wrong, but that’s my reasoning…

Edit: Meaning the company can only retire shares in practice.

Right, I seem to recall something about in the 70s/80s companies tried to crossown each other to protect against takeovers and this was eventually not allowed either. Or maybe never was. As in company A bought a large chunk of company B which in turn bought shares in company A and then nobody could buy up any of them. So yeah, companies owning itself is probably a very bad idea for everyone.

Edit: Although a quick read of Discoduckys link just below seems to say you can.

 

[Discoducky]

I don’t think that’s a thing. That would enable a stealth way to do a secondary share offering without having to file a prospectus. I could be wrong, but that’s my reasoning…

Edit: Meaning the company can only retire shares in practice.

Treasury shares via stock buyback.

What I'm hoping Tesla will do to acquire mining companies as needed.

 

[Artful Dodger]

Do we have confirmation of LFP in powerwalls? I've seen this mentioned here before, but I can't find an official source for it. If you have one, please share.​

We rarely get official sources, this source is a tweet from @Carsonight . He's "insider-adjacent" at Giga Nevada (has family working there). He's been a reliable source for many years. He said both Megapack and Powerwall production has moved to Lathrop. Seems unlikely they'd make the move to Lathrop for Powerwall production unless they also switched cell types (aim is to simplify the supply chain, not to complicate it).

Elon mentioned previously that Tesla intents to switch TE products to LFP: (it's the cost/KWh)

Tesla Hints At Transition Of All Energy Storage To LFP Batteries | Teslarati (Jan 27, 2022)​

 

[ByeByeJohnny]

People complaining about the leasing regs put out by the administration should remember that the EU has complained about the IRA and threatened to take it to the WTO. Since it’s impossible to modify the law in the current Congress, this may be the work around to avoid a fight with the EU. Tesla probably didn’t even come up in the discussions.

I've seen media here in Europe reporting the leasing as a way to get around a potential tradewar. So seems likely.