TSLA Market Action: 2018 Investor Roundtable

[Tslynk67]

Well, didn't listen to the call yet - watched the after-market ticker, which was great, and now finally read all of the above - some great posts from you all, thank you for that.

I feel a bit giddy with it all. Everything we've been saying has come to pass, along with some nice new things like the AI chip.

Now I go to a local park for a long lunch-hour in the sun to listen to Elon's dulcet tones...

Cheers to the longs!

Yeah, no kidding. What did happen? Now that we got through it, it all seems pretty obvious in hindsight.

Basically the call re-iterated all the anti-bear messages I've been posting on Twitter the last few weeks, so yeah, it is obvious

I think it is pretty clear that the shorts are running out of straws to grasp. I would bet that one of their main focuses moving forward will be the pending litigation.

What, we have three things running - Tripp, misleading investors on manufacturing outlook and now this SolarCity thing.

I don't think they'll have any impact whatsoever, they are side-shows, although the shorts will spin it all as much as they can.

After following Tesla for many years, I know as a fact that in the end shorts are always wrong, Tesla is right. But shorts will forget it, move to the next lie. Unfortunately this technic does get a lot of people.

What's left for them to grasp at? I would say demand is basically it. Not that there is a demand issue, but it's the one lie they will push now.

"Stock price finally reaches $400. That's when the short squeeze starts."
— I'd believe that. But do you have some more specific rationale for it?

I think the squeeze started end of June when the 5k run-rate was announced, it's just now we see it beginning to play-out.

the comments here about Apple and others have helped me to realize that. The FUD won't stop. And when you consider the industries and wealth funds most under threat from Tesla, I have to assume the FUD and attacks will get even bigger.

Maybe, but we have more demonstrable evidence to the contrary now to push back.

Better to stay careful.

I wouldn't be surprised if tomorrow we get a >10% spurge during the first few hours, and then slowly degrade to end the day barely >3%.

Wouldn't be the first time

Yep, but pre-market holding-up so far on relatively high volume. I'd expect the more sensible shorts to start to cover too. So who knows.

I'd be surprised if the short squeeze happens. I'm certainly not covering, though I will admit that the ER wasn't as bad as me and other shorts we're hoping for.

The problem is... It's still guidance.

They burned 740M cash last quarter. It's the 3rd quarter in a row with >$4/share losses. Accounts payable now dwarfs cash. And to top it all off, gross margin on the expensive Model 3 versions is still below 5%.

If they can't get that gross margin number up significantly, they're going to be in big, big trouble.

A reminder: shorts don't believe anything Elon says. We didn't believe the 5k/week. We didn't believe cross country road trip in 2017 (or 2018). And we certainly don't believe they can achieve 15% gross margin.

Overall, report feels like nothing new beyond "their cash position is very weak, but not crippling."

Q3 is still the make or break month. I think shorts will stick around until November.

I think Q3 will be your worst nightmare - Elon appears to have stopped with the overly-optimistic future projections, he's now under-promising IMO

It is the ER call where everybody was like sitting in a lounge sipping a pick your favorite Islay scotch so... yeah, I do think so.

Smokey for me, a Bowmore will do for tonight but I,ll take a Lagavulin 16 tomorrow with the price action

Cheers fellow longs!

I've a bottle of Glenfiddich Solara 15 in the garage, but didn't open it yet

I've been long TSLA since its IPO and have been adding since (own a Model X too). I've also been lurking on this forum since its inception but never feel like I have anything more to contribute so I've never posted (but thank you to all the real contributors) until now.

I really liked the ER and conference call but one thing I just realized is that producing 50-55,000 Model 3s for Q3 it is still less than 5K production per week for the quarter. Best case scenario is 55K produced in 13 weeks is only 4,230 per week. I'm surprised this hasn't been posted anywhere yet that I have found, so I finally decided to post it to get everyones thoughts.

If they are aiming to hit 6K per week production by end of Aug then shouldn't the Q3 estimate be more? Even with 2 weeks of factory shutdown for upgrades that only averages 5K per week (55K produced / 11 weeks = 5K). My thoughts are they are really trying to sandbag the numbers (ie. "A win should feel like a win"), or they plan on shutting down production for an extended period of time during this quarter for factory upgrades, etc.

Am I missing something? What are your thoughts?

Sandbagging - Elon's finally realized that he need to under-promise and over-deliver. He has SP targets now for his remuneration and he intends to hit them.

Trying to be humorously pedantic:
FTFY: LTS (Large Testis Strategy)
Testicle literally means “little testis.” The “-icle“ suffix indicates “diminutive.” Kind of insulting. Sort of means “mouse nuts” and should therefore be eschewed by Tesla Bulls.
More accurate designations:
One nut = testis
Two nuts = testes

A more “inclusive” financial concept is the LGS (Large Gonad Strategy), as it applies equally to testes and ovaries.

Appropriate for Market Action thread only insofar as it clarifies the now-popular LTS concept.

Actually, he wrote "testacle", so maybe he meant "tentacle"?

The +10% gains seem to be holding up well for now on the German exchanges, but as always with extremely low volume (22k traded on Xetra and only 2k in Frankfurt).

In my experience, Frankfurt merely mirrors NASDAQ.

 

[mongo]

These sorts of things are why you locate in Silicon Valley instead of Michigan. Especially if you see yourself as building wheeled, autonomous, thinking machines.

Just because the traditional OEMs have historically have had little to no interest in new tech or anything that looks different, does not mean there is not great engineering talent in Michigan...
Home - Mcity

(At a lower cost of living than SV)

 

[neroden]

I've been long TSLA since its IPO and have been adding since (own a Model X too). I've also been lurking on this forum since its inception but never feel like I have anything more to contribute so I've never posted (but thank you to all the real contributors) until now.

I really liked the ER and conference call but one thing I just realized is that producing 50-55,000 Model 3s for Q3 it is still less than 5K production per week for the quarter. Best case scenario is 55K produced in 13 weeks is only 4,230 per week. I'm surprised this hasn't been posted anywhere yet that I have found, so I finally decided to post it to get everyones thoughts.

If they are aiming to hit 6K per week production by end of Aug then shouldn't the Q3 estimate be more? Even with 2 weeks of factory shutdown for upgrades that only averages 5K per week (55K produced / 11 weeks = 5K). My thoughts are they are really trying to sandbag the numbers (ie. "A win should feel like a win"), or they plan on shutting down production for an extended period of time during this quarter for factory upgrades, etc.

I am pretty sure they do plan for significant shutdowns for upgrades. Given that they're redesigning hunks of line ("We can simplify the body line"), yeah.

 

[neroden]

I like to think that too, but when I looked at tesla job offerings, I found a lot of microsoft technology mentioned. Not instilling a lot of confidence honestly.

Yuck. I mean, not *all* Microsoft technology is bad, just *most* of it. Can you quote some references to what Microsoft tech they were referring to?

 

[shlokavica22]

BMW’s automotive EBIT margin narrowed to 8.6 percent from 10.1 percent a year earlier while vehicle deliveries rose 0.7 percent.

 

[neroden]

Just because the traditional OEMs have historically have had little to no interest in new tech or anything that looks different, does not mean there is not great engineering talent in Michigan...
Home - Mcity

(At a lower cost of living than SV)

At the risk of going further off topic, I'll say that the current Michigan state government has badly underfunded public education (and I do mean *really* badly), which makes Michigan a very unattractive place to live for smart people with kids. For the same reason, I don't think Tesla can really build a big operation in West Virginia, though Pennsylvania or Maryland near the border would probably be OK.

 

[jkirkwood001]

I've been long TSLA since its IPO and have been adding since (own a Model X too). I've also been lurking on this forum since its inception but never feel like I have anything more to contribute so I've never posted (but thank you to all the real contributors) until now.

I really liked the ER and conference call but one thing I just realized is that producing 50-55,000 Model 3s for Q3 it is still less than 5K production per week for the quarter. Best case scenario is 55K produced in 13 weeks is only 4,230 per week. I'm surprised this hasn't been posted anywhere yet that I have found, so I finally decided to post it to get everyones thoughts.

If they are aiming to hit 6K per week production by end of Aug then shouldn't the Q3 estimate be more? Even with 2 weeks of factory shutdown for upgrades that only averages 5K per week (55K produced / 11 weeks = 5K). My thoughts are they are really trying to sandbag the numbers (ie. "A win should feel like a win"), or they plan on shutting down production for an extended period of time during this quarter for factory upgrades, etc.

Am I missing something? What are your thoughts?

I agree, @TSLA11. I'm comfortable with the long-term plan, but I think the "achieved 5,000 / week" is generous. They wrote "we have repeated weekly production of approximately 5,000 Model 3 cars multiple times". Skeptically, that could mean they achieved 4,500 twice, and optimistically 3,500 the other 2+ weeks, for a total of 16,000 or 48,000 for a quarter. So if they get to 55,000 for Q3, they need to average over ~4,800 a week from now until Sept. 30th. I think 5,000 / week is still not sustainable, but close.

 

[neroden]

So I'm *terribly* curious what the market action is going to look like. If Jesse's theory about malicious short-sellers is correct (as I think it is), we might expect an attempted bear raid after market open. The FUD is still being published... on the other hand, they might hunker down for a couple of days and renew their attacks over the weekend, or Monday.

I really doubt they've thrown in the towel this easily.

 

[Dan Detweiler]

So I'm *terribly* curious what the market action is going to look like. If Jesse's theory about malicious short-sellers is correct (as I think it is), we might expect an attempted bear raid after market open. The FUD is still being published... on the other hand, they might hunker down for a couple of days and renew their attacks over the weekend, or Monday.

I really doubt they've thrown in the towel this easily.

I think the important thing to keep in mind, at least for our collective sanity's sake, is that the FUD will never go away. There will always be people out there that just like bashing on Tesla. If they don't have enough ammunition on their own, then they will simply make it up. It's never going away. The important thing is who is going to listen to all the BS. Eventually the FUD brigade will simply no longer have a significant congregation to preach to. We just need to keep on keepin on as it were and support the company with our orders, test drives of our cars to friends and neighbors once we get them, and generally spreading the good word.

Just my $.02.

Dan

 

[madodel]

Yes, TSLA the story stock is hunkering down to actually focus on production, gross margins and profits. They put it off as long as they could, but WS tried to put the squeeze on them. This is the right response right now even though it means perhaps a bit more subdued growth for now.

And now reading the trolls on Twitter some have shifted the attack from "imminent bankruptcy" to "they will now have slow growth".

Does anyone remember when they first realized that AAPL was no longer under any threat of imminent demise? All along I thought that they made the best computers ( and I worked with IBM mainframes and PCs for a living) even though I was no fan of Mac OS 9, but it was usable. Mac OS X was a lot better and showed a future, but the thing that convinced me that AAPL was able to get people to throw cash at it was the iPod. I bought my then 8 yo daughter a Disney branded MP3 player for Christmas. The iPod was brand new and MP3 players were the big thing back then in 2001. iPhone wasn't on any ones radar for another 6 years. She loved all Disney princess stuff. And I was in our local Target store before Christmas and saw the Disney branded MP3 player on sale. It used SD cards which you could buy preloaded with music, so no subscription service or download costs or use of a computer at all. It was pink, looked cool and it was cheap. How could anyone else compete with it The iPod could only download music to its limited amount of memory using a computer, and looked clunky. It seemed like a no-brainer. When I gave it to my daughter she almost burst into tears. Why wasn't it an iPod? I explained all the advantages of this Disney MP3 player over the iPod. Two days later I returned the Disney MP3 player and bought a stupid expensive iPod. That meant we had to get an iTunes account and have been locked into Apple ever since. That was when I knew any rumors about AAPL bankruptcy were BS. So I remember December 25th, 2001. The Disney branded MP3 player disappeared from store shelves shortly thereafter as far as I know.

So I will now remember the date, August 1, 2018, Tesla lives. Despite the fact that Tesla isn't going bankrupt, the trolls will continue to trot that out as well as other lies. Best to ignore them and if the market is dumb enough to believe them, buy the dip. Worked pretty well for me with AAPL.

Take this for what it cost you. Worth absolutely nothing.

 

[CorneliusXX]

No problem, I understand you can't please everyone - or can you?

 

[Words of HABIT]

Just a note to thank all TMC contributors for providing truth and reason (both Bulls and lack of sensible argument from Bears) to decipher all the FUD and for helping keep me invested in TSLA. Excellent report and CC. I'll make no prediction for what the share price ends up today, however based on yesterday's events, it strongly suggests it is upward movement from here for the foreseeable future. Stay long and strong, do your own research, and don't fall prey to FUD. The Tesla story remains fully intact and the future is bright, and it's green.

 

[madodel]

Yuck. I mean, not *all* Microsoft technology is bad, just *most* of it. Can you quote some references to what Microsoft tech they were referring to?

Are they running BoB?

 

[jhm]

Wow, what a night! Alright, I have to admit I bought my first option-type investment product ever last night before markets closed. Until yesterday, I was a straight-up buy&hold guy that never looked everywhere else. However, I felt that I really would like to be part of the run-up that will (at some point) need to happen for TSLA.

Boy, this was great and the leveraged stuff is really super addictive. I will need make sure to not get lost in the greed and furry of this going forward. Of course I was just dabbling a little, the money I invested was less than the average daily portfolio swings I would have on my purely stock based portfolio, it was probably .1% of what @TrendTrader007 would consider a medium trade but still - it is an amazing feeling...

Anyways: back to the topic. @jhm - I'm curious to hear what you think today. I don't think the call limited "crazy growth" or "1 trillion market cap" in future. I think it focused on immediate execution first. It is pretty clear to me that Model Y, Model 3 (internationally, not just the US), Semi + Roadster will need more production facilities. This means that Tesla will need to get creative. And I think they will. But I appreciated that they didn't cloud the great story that is currently unfolding with future aspirations: every time that happens, the shorts detract from the here and now, point to the future say "this is crazy" and you have another negative news cycle. Just one example: Q1 deliveries showed +100k Model S/X in 2017 which is huge and great in my mind. Nobody cared, because of the Model 3 ramp. At the same time, BMW was taking one victory lap after the other that they had sold 100k electrified (*not* electric) cars in 2017. I had many folks that were of the opinion that BMW was bigger in EVs than Tesla.

So I like this: just get it done properly ER call. There will be time to talk about future growth in Q1/Q2 next year.

The EC was simply not the venue to lay out a road map to 1 million vehicles. But my concern is that this is slipping from a once 2020 target to maybe 2022 reality. I hope I am wrong, and they are simply holding cards close to chest.

An important part of this reality is that Tesla has become the single largest EV maker in the world including PHEVs. By the end of Q3 their YTD numbers will prove this out. I believe that their July numbers already show this lead.

So this is going to mean a massive reframing of Tesla's leadership in the EV industry. Not only do they lead on tech, but they lead on scale too. Musk himself is starting to talk about how the bigness of Tesla is making it hard to move fast. I've set up a thread on EV Market Share just to deal with this emerging reality for Tesla.

We really do need some clarity on building out GF capacity. Here they definitely need to hold cards close to chest, but I am concerned that facility planning is already a hard constraint on growth out to 2022. This also frustrates me around raising capital. To delay capacity build out until it can be funded by internal cash really makes the planning narrow and contingent. A shortfall in cash one year can delay capacity needed 3 or 4 years out. But a surplus of cash the next year can't speed things back up. Just barely being cash positive does not put you in a position to fund 50% annual growth.

So we'll see how Musk lays out a plan for the next 2 to 4 years.

 

[Zaxxon]

Are they running BoB?

Or, God forbid, Windows ME...

 

[Chickenlittle]

First: Congrats to the longs. Enjoy the run, especially if you've been trading it.

Second: Quick question: Does Teslas current AP Hardware still base on the Drive PX 2 unit by NVIDIA or did that change to something newer with the upgraded Hardware a while ago? I'm trying to get an impression in what league that 200 vs 2000 frames per second thing puts Teslas AI Chip.

Ok not really responding to a short but rather a side bet I made. Musk has stated that they will upgrade computer if needed for full AP if you purchase that option. That was a huge incentive for me since I believed they would have to. I have read a lot of people saying they would not order the option with the technology not yet complete both my model 3s were purchased with the option. Looking like a good bet right now.
To answer the question posed 2000 is 10 times more than 200.

 

[MartinAustin]

I just saw $331 so the climbing isn't done yet

 

[mongo]

Very odd...

• Q2 Model 3s in transit: 11,166
• Estimated July Deliveries: 14,250
• Estimated July Production: 16,000 (Skabooshka's estimates, 4k/week)

11.2k + 16k - 14.25k = 12,916 Model 3s not yet delivered

If Tesla was hoarding inventory at the end of Q2 for the tax benefit, shouldn't inventory/in-transit be going DOWN, not up?

Edit: Also, concerning to see S/X deliveries down 21% compared to July 2017.

InsideEVs can only estimate Tesla's numbers since they are not reported. They adjust the third month of the quarter to match the officially released totals.
GIGO...

Wanted to correct/ clarify my previous post, I did not mean to imply InsideEv's numbers were (G)arbage, only that if the number used as the basis for the argument was incorrect, the argument falls apart.
Tesla's July US sales numbers were ~13,571 based on the 48/52 split and reported competition sales number, so the number is really close (with some adjustment for Canada).

In transit may be increasing due to shipping agreements lagging production.

Thanks to @phil0909 for calling me out on my post 200k bias.

 

[johnnybgood888]

Stop reading CNBC..

If even CNBC has nice things to say, then maybe the tide is turning.

 

[Remus]

Yuck. I mean, not *all* Microsoft technology is bad, just *most* of it. Can you quote some references to what Microsoft tech they were referring to?

Am I the only Microsoft fan here?