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

[wipster]

Yeah....no

TSLA is gonna be punished for at least the rest of this quarter and Q3's earnings are going to heavily scrutinized. If you thought the FUD since earnings was high gear, it's about to enter a whole new level. This kind of announcement can keep investors on the sidelines for a least a couple quarters to make sure there's nothing to the CFO's departed when it comes to Tesla's finances.

There will be a real test of the uptrend line set back in Jan and man if it breaks, at least chart-wise, it's not pretty for the stock.

The return of #StarFoxisaDowner!

 

[Max Plaid]

Since the CEO is also a joke, what did we expect? I'm sure the thumbs down will come flying but really, a cage match with another CEO? Especially since Musk will look like a complete idiot while getting the snot beat out of him.

Sorry kids, TSLA is a crap stock right now and that is a shame since the company is doing great things.

I'm a long term investor but I've been frustrated with Musk and the companies image for a while now.

Instead of talking about the great innovations and the many achievements of Tesla, we talk about Social media wars, Cage matches, unhinged posts and all other kinds of things that simply do not help the stock price.

I can't wait until Musk decides to hand over the reigns and move onto something else.

I can understand you're vexed by Elon's "antics", but as an investor you're surely able to separate the public persona from the CEO of Tesla, remember, that really, really good guy who was on stage at the shareholder's meeting a few months back? That's the guy running Tesla, not the conspiracy theorist on social media

And that guy runs Tesla really, really well, and made a lot of folks here very wealthy

Remember this

 

[StarFoxisDown!]

The return of #StarFoxisaDowner!

Haha more like #StarFoxisbeingrealistic!

I pointed out before earnings that TSLA was due for a correction and that there was quite a bit gulf in between where the share price was at that time and where support levels were (both in terms of the 2 year downtrend acting as support since TSLA was and still is above it and the uptrend line set at the low back in January).

TSLA needed to either blowout earnings (they beat and margins weren't nearly as bad as most were predicting but they weren't blowout) or have a product announcement for Cyberbuck deliveries or unveiling Highland 3. We got neither so down TSLA goes to find support.

 

[gtrplyr1]

I can understand you're vexed by Elon's "antics", but as an investor you're surely able to separate the public persona from the CEO of Tesla, remember, that really, really good guy who was on stage at the shareholder's meeting a few months back? That's the guy running Tesla, not the conspiracy theorist on social media

And that guy runs Tesla really, really well, and made a lot of folks here very wealthy

Remember this

Yes, I can separate the two as an investor who has watched the shareholder meetings and has taken a real interest in the company. The problem is the average person can’t, and it has definitely tainted Tesla’s brand image. I’ve had many a discussion with friends who ask me what the hell is going on with that Elon guy?

The public just sees the wacky stories and forms their opinions on that and unfortunately I do believe it has affected sales.

Still long but frustrated.

 

[Max Plaid]

Would you mind elaborating on this? I would love to know why a higher stock price would not serve the mission. And while your at it, explain the ridiculous memes that Elon puts out regarding shorts?

Yahoo nailed it:

 

[cliff harris]

There is a bullish take on zach going. It might well be wishful thinking, but the logic is sound.
The CFO position is probably very exciting for a company that needs a major financial turnaround (like Rivian), and taking a company thats in the red and turning it to green is probably a real feel-good thing for a CFO. It doesn't sound like blowing up the death-star or defeating voldemort, but for someone who is a CFO, thats probably the best metaphor.

Whats the challenge for zach now?

The company is printing money like crazy, has zero debt, has enough cash to finance all foreseen expansion, despite a crazy rate of growth, has decent profit margins.... how tedious. Frankly from this point on, the job sounds kinda dull. Dojo needs a big investment? here, take some of this massive pile of cash. Supercharger network needs expanding? have some more cash.

Zach got the experience, the credit, the kudos, and the cash. There are a ton of amazing ENGINEERING challenges still at Tesla, but financial? Zach probably cares a lot about his reputation (what else do you care about with $130m?), he wouldn't leave unless he thought the company future would be ok. Plus... the dudes net worth is likely VERY heavily invested in TSLA. He wouldn't leave if he thought there was trouble ahead, he would stay and steer through it.

I liked Zach, but him leaving doesn't change my faith in the stock one bit.

 

[Doit]

Zach's LinkedIn post about stepping down:

This morning Tesla announced that I’ve stepped down from my role as Chief Financial Officer, succeeded by our Chief Accounting Officer, Vaibhav Taneja. Being a part of this company is a special experience and I’m extremely proud of the work we’ve done together since I joined over 13 years ago. As I shift my responsibilities to support this transition, I want to thank the talented, passionate, and hard-working employees at Tesla, who have accomplished things many thought not possible. I also want to thank Elon for his leadership and optimism, which has inspired so many people.

Seems the departure is amicable and comments are overwhelmingly positive (toward Zach).

 

[GOVA]

Yawn.

Can we get that Highlander specs/photos and CT prices?

 

[Captkerosene]

Elon Musk:

I think we may have figured out some aspects of AGI. The car has a mind. Not an enormous mind, but a mind nonetheless.

 

[The Accountant]

Thank you @The Accountant for sharing your perspective as an ex CFO <3

https://twitter.com/x/status/1688547270684270592

I believe I misstated Zach's net worth. I left out his vested options which I believe are another $400m.

 

[Mengy]

Lol sorry man but your pessimism often times makes no sense. Earlier this year back in the 100's, I seem to remember you saying you didn't think 300 would be touched this year and TSLA touched it just 6 months later.

Your post above this talked about the PE (which is actually 70 right now) being stagnate for the next year but in reality, it'll likely be stagnate for just 1-2 quarters. Because of the scale Tesla will be at for the start of 2024, any stabilization in prices or improvement in prices if rates drops will have outsized impacts on margins and EPS. Bigger impacts than the price cuts that happened this year, which could easily reverse the impacts to the positive side for Q1/Q2 of 2024.

Just those reversal of the price cuts impact at a scale of 525-550k vehicles per quarter could easily lead to a 50% improvement in earnings YoY. Nevermind the fact that Energy in the past quarter finally started to make a material impact on earnings. It's not big by any means but the improvement in margins YoY actually helped EPS instead of being a drag on it. As Energy grows revenue going forward, the YoY impacts of gross margin improvement will actually help EPS in total for Tesla.

I agree if Tesla substantially raises prices on their cars anytime in the future then the valuation balloons like a rampaging bull in a China shop.

That said, do you really think Tesla is going to raise prices on the M3 and MY ever again? It would go against the mission to supply affordable cars to the public. My hunch is prices will only go down or stay flat from here (minor bumps up notwithstanding), not go up, so I don't count that as a likely event.

CT production should help offset the margins hit from the price cuts, but not until CT ramps efficiency which likely won't occur until the later half of 2024. The real wildcard IMHO could be Megapck ramping up and floating margins upwards to offset the price cuts, as the Megapack margins & production do seem to be increasing very nicely.


ALSO, I might seem pessimistic but only in the short term, long term I'm still wildly bullish on TSLA and Tesla.

 

[GhostSkater]

The public just sees the wacky stories and forms their opinions on that and unfortunately I do believe it has affected sales.

The public will form wacky opinion no matter what

What we see today is childs plays compared to 2018 and earlier

 

[The Accountant]

Thank you @The Accountant for sharing your perspective as an ex CFO <3

https://twitter.com/x/status/1688547270684270592

Other comments I made on X to allay the fears of those freaking out:

The fact that Vaibhav was named CFO (and not 'Interim CFO') indicates to me that this was a well planned succession move. Vaibhav has been groomed for this role. I expect no hiccups with the transition.

From my experience, staying on to December is an indication that this was a planned succession move. When there is some issue, it is not a good idea to have someone hanging around that is not happy.

I made this comment in a private chat when someone started suggesting fraud:

If there was any fraud or a required misstatement with the financials, Tesla would not be giving the Chief Accounting Officer the CFO role. I am confident this is not the reason for Zach leaving. If there is fraud, the CAO goes too.

 

[Buckminster]

Threads of the day:
FSD V12 (end to end AI) Mind of it's own? the micro picture
Tesla Optimus Sub-Prime Robot Mind of it's own? - the meso picture
Artificial Intelligence Mind of it's own? - the macro picture
Next Tesla CEO/COO Zach chit chat unrelated to TSLA SP
Project Highland (Investor impact etc.)

 

[ItsNotAboutTheMoney]

Elon Musk:

I think we may have figured out some aspects of AGI. The car has a mind. Not an enormous mind, but a mind nonetheless.

Musk will say anything to try to get people to pay for FSD.

 

[StarFoxisDown!]

I agree if Tesla substantially raises prices on their cars anytime in the future then the valuation balloons like a rampaging bull in a China shop.

That said, do you really think Tesla is going to raise prices on the M3 and MY ever again? It would go against the mission to supply affordable cars to the public. My hunch is prices will only go down or stay flat from here (minor bumps up notwithstanding), not go up, so I don't count that as a likely event.

CT production should help offset the margins hit from the price cuts, but not until CT ramps efficiency which likely won't occur until the later half of 2024. The real wildcard IMHO could be Megapck ramping up and floating margins upwards to offset the price cuts, as the Megapack margins & production do seem to be increasing very nicely.


ALSO, I might seem pessimistic but only in the short term, long term I'm still wildly bullish on TSLA and Tesla.

I would classify short term is 1 year or so. Saying the stock won't get above 415/share for another 2 and a half to 3 years is longer than short term to me.

But yes, I do see Tesla raising prices when interest rates materially drop. It won't be back up to the same prices as before, not close, but the combination of just raising prices a third of what the price drop was combined with cost cutting measures over the next 2-4 quarters could return Tesla's gross and operating margins in to the ballpark of the upper 20's. Combine that with Energy shifting from negative to flat margins to now hitting 20-25% margin on much higher revenue, and yeah, I see a path to 2024's earnings growing at leat 50% YoY, if not more.

I don't feel like there's enough acknowledgement of the impacts of current car loan rates and the affordability factor. Also combine lower rates with the EV tax credit shifting to a point of sale rebate, not a tax return thing, and it also immediately lowers the monthly cost to the average consumer.

I also don't feel like there's enough acknowledgement of Tesla's ability to continually reduce COGS. Everyone and their mom was predicting 15-16% gross margins. Tesla managed 18.2% while receiving way less automotive credits AND facing currency headwinds. Take out those big headwinds and gross margins would have been over 20%.

Tesla simply needs just a couple macro related things to go there way (rate reduction, currency favorability) along with continued COGS reduction and small price hikes when rates go down to get back into the mid 20's for gross margin

 

[wipster]

Haha more like #StarFoxisbeingrealistic!

I pointed out before earnings that TSLA was due for a correction and that there was quite a bit gulf in between where the share price was at that time and where support levels were (both in terms of the 2 year downtrend acting as support since TSLA was and still is above it and the uptrend line set at the low back in January).

TSLA needed to either blowout earnings (they beat and margins weren't nearly as bad as most were predicting but they weren't blowout) or have a product announcement for Cyberbuck deliveries or unveiling Highland 3. We got neither so down TSLA goes to find support.

All in jest my friend! You know how I feel about your posts... they're normally pretty accurate, but that doesn't mean I have to like them!

 

[Krugerrand]

... your Freudian slip is showing.

Just a typo.

 

[space_s3x]

Yahoo nailed it:

View attachment 963026

Incredible leaked insider-scoop in that article:

From Income-Statements to CAD Models: The Untold Story of the Tesla CFO Shake-up

In a world where job roles have become increasingly specialized, some people just want to do it all. And nowhere was this clearer than in the grand halls of Tesla, where, we have learned, CFO stands for Chief Fix-Everything Officer. So when CFO Zach Kirkhon left Tesla after 13 long years, it wasn’t over quarterly earnings or profit margins. No, it was over something far more pressing: Elon wasn’t happy with the speed at which Zach was developing the Full Self-Driving technology and the 4680 batteries.

A CFO's Real Duties

For most companies, a CFO examines balance sheets, tracks expenses, and possibly agonizes over the cost of toilet paper. But at Tesla? Your day might begin with balancing billions and end with balancing the fine calibrations on the Occupancy Network NN models. You could be in a meeting about capital allocation and then, five minutes later, find yourself in a lab coat observing the chemical composition of a silicon-based battery anode. Ah, just another day at the office.

The Breaking Point

Sources say that during a top-level meeting, Elon, visibly distressed, looked at Zach and exclaimed, “Why is our Full Self-Driving not fully self-driving yet? And the 4680 batteries? I expected them to be at least... 4681 by now!” Zach, holding back tears, tried to explain a concept called “departments,” but the room was too filled with anticipation for the next great leap in innovation.

Enter Vaibhav Taneja: The Fixer

Upon hearing about Zach's departure, Vaibhav entered the scene with a calculator in one hand and a wrench in the other. Elon was thoroughly impressed and immediately appointed Vaibhav as the new CFO. Vaibhav quickly realized that in order to accelerate the pace of process in Tesla's various engineering challenges, what was really needed was some good ol' financial jargon.

Rumor has it that on his first day, he examined a self-driving NN model and asked, “Have we tried maximizing its recall ROI? Maybe we should think about diversifying its hardware-asset portfolio or consider hedging its technology futures?”.

In Conclusion

While most CFOs are crunching numbers, Tesla's might just be under a car, with a multimeter in hand. Because here, "financial engineering" takes on a whole new meaning.

 

[Nocturnal]

I agree if Tesla substantially raises prices on their cars anytime in the future then the valuation balloons like a rampaging bull in a China shop.

That said, do you really think Tesla is going to raise prices on the M3 and MY ever again? It would go against the mission to supply affordable cars to the public. My hunch is prices will only go down or stay flat from here (minor bumps up notwithstanding), not go up, so I don't count that as a likely event.

Tesla's mission is best served with maximizing profit levels given their production capacity. They will and should raise prices if demand increases faster than supply.