TSLA Market Action: 2018 Investor Roundtable

[MikeQ]

I am available for adoption, but I barely made it through middle school. A used 2013 Leaf from Arizona would suit me just fine...

RT

Can I claim you as a dependent on my tax return?

One kid in college and another close behind with each getting a Model 3 is the extent of my wild spending (well, there was a Model X a few years ago).

My wife and I met in the Army (enlisted) and started with nothing. We put ourselves through college and struggled financially for many years. We waited 12 years to have kids because we wanted to get out of the army and through college before adding the responsibility of kids.

Our single goal in life has been to provide a better foundation for our kids than we had. Sending them out into the world with a college education and a safe, low maintenance vehicle is our big splurge...and the Model X for us.

 

[gringotuanis]

I am available for adoption, but I barely made it through middle school. A used 2013 Leaf from Arizona would suit me just fine...

RT

I like how the dad took it for himself and somehow spins this as if he's giving his kid the car lol. Nice job Dad.

 

[gringotuanis]

I like how the dad took it for himself and somehow spins this as if he's giving his kid the car lol. Nice job Dad.

And yes I'm being a jerk haha.

Still of I was promised a model 3. I'd be pissed if the old man took it for a year or two. What happened to my new car dad?

 

[tinm]

That's all great and I applaud it. What's missing is a desire on Tesla's part to define a "Where we want to be" for the full customer experience -- from ordering to confirmation to dealing with here-one-sec, gone-the-next delivery specialists, to having a VIN and then not, to having a delivery date then not, to having a rescheduled delivery date (that forced customer to delay a vacation) to not, to receiving the car with scratches or other flaws that force it to be sent back to the factory, etc.

Where does Tesla want to be in terms of managing customer expectations and communications? It should want to be Number One in the World. It thinks it is now, but it isn't. It needs to "vector" all the energy and focus and attention and effort company-wide to achieving the best, most consistently excellent, customer experience in the world. It's attainable. It's already here -- in spots, especially California (no surprise there). But it isn't everywhere, it isn't uniform.

If you are going to base your company's growth on word of mouth and no advertising, then you should measure, measure, measure the experience every single customer has, and then monitor that forever, providing easy and quick and accountable means of communication between customer and company, and "vector" your team to make the word of mouth as positive as possible everywhere every time for every customer.

(Hey mod, please don't yank this post out of this thread. It's the weekend. We're having a conversation here. )

Most are familiar with rhetorical questions. Few are familiar with rhetorical actions...



Most of Elon's actions are designed to line up vectors, and they could be called rhetorical as they line up the thoughts of the audience. Here is a recent Elon Tweet:



View attachment 329116 View attachment 329117

He is very good at doing this. His rhetorical actions are frequently criticized by people who already think they are correctly lined up. But there are a lot of people out there who are off, or counter productive. His actions build consensus. All the "stupid expensive" mistakes he makes in the factory are acceptable as they line up human vectors and you end up ahead in the long run. Following expert advice does not have the same "rhetorical action" effect as public mistakes do.

 

[Zhelko Dimic]

Last Monday someone bought up thousands of Jan $50 puts triggering a 30% jump in the price to $1.65. It kicked in a sale for some of mine, and the price dropped back by Wednesday to $1.15. To me, that was a clue someone knew something was coming. I have seen several huge contract buys over the last six months (Apr and June expirations) that always result in big (double or more) returns.

Now these contracts do not mean the stock is expected to drop to $50. They have just become a popular way to cheaply trade the price swings. There are almost 70,000 open contracts. In 2018 we have seen the prices swing from around $.48 to $2.50 with lots of price swings in between just like last Monday. But if history this year is any indicator, we should be looking for a drop in SP next week. After replenishing my inventory on Thursday at $1.10 I placed new GTC sell orders at $1.60 and $2.00 on Friday.

On Wed August 8 I bought some Aug monthly $420 calls, fully expecting to see the 8-K come out with the going private details for the "funding secured" tweet. As we saw nothing was ever released, and my calls expired worthless. I thought the $420 number would get pushed higher. I thought 20% was too low a premium for the BoD to accept. If memory serves Dell ended up paying close to 40%?

Putting everything we know and have seen together, I expect to see a drop at the open. I think a lot of people over-bought/leveraged up hoping to cash in on the take-private action. Even a small drop may have them running for the exits to avoid margin calls. That could trigger a bigger sell-off. Just my 2 cents.

I think this is much more realistic analysis than often repeated 'strong shareholder ended up owning shares' fallacy.
I know I unjustifiably increased my position because of the tweet. That add is not core position for me, I'll get rid of it at first opportune time.

Now, I can afford to wait, as most of my adds were short puts, so time works for me and I have plenty of margin space; not my first rodeo with Elon; but many others may not have that luxury and will need to exit. I expect down and big flush, than up. But my short term prediction record isn't great.

 

[MikeQ]

And yes I'm being a jerk haha.

Still of I was promised a model 3. I'd be pissed if the old man took it for a year or two. What happened to my new car dad?

He's actually very okay with it. He's living on campus for the first year and doesn't want it sitting in a parking garage with drunk college students zooming in/out. Also while there are free chargers on campus they are far from where his dorm is so even if he had it, it would be parked on the other side of campus a lot of the time.

He's a really good kid. He even told his brother he can drive it while he's away.

 

[Teslie]

I believe the market will reward Tesla for remaining public,

The market which didn‘t use the quick profit from 320 to 420 is going to reward TSLA now when the hope for 420 BO is gone ?

Good awakening tomorrow

 

[beachbum77]

I think this is fundamentally wrong: while the Chinese Gigafactory is in Shanghai, it's not in the Shanghai Free-Trade Zone (which is subject to tariffs), but on mainland China. Tesla will be a 100% foreign owned but domestic carmaker in China.

So not only will tariffs be 0%, but Tesla cars will also likely be able to get the EV incentives of domestic Chinese EV carmakers, which are very generous: above $7,300 per car:

vincent on Twitter

... because the incentives scale up with battery range and Tesla is able to reach the highest incentive category.

Also note that Chinese EV incentives are not tax incentives like in the U.S., but are directly given to carmakers, regardless of the tax bracket of the person purchasing the car. This widens the number of customers who are able to purchase Teslas.

This is why the Chinese Gigafactory, 100% owned by Tesla, is such a big deal - the Model 3 will be able to reach literally 10x-20x more customers in Chinese market, because instead of $140k starting prices the effective starting prices will be in the $25k range ... Profit margins will also be much better, because instead of 40% of the purchase price being lost to tariffs, there's effective negative tariffs due to the EV incentive. On a $50k ASP Model 3 the incentive plus Tesla's position as a domestic manufacturer is equivalent to an about -15% tariff.

This is what Elon's trip to China and Beijing and his meeting the #2 Politburo member in the Chinese hierarchy was all about I think.

So please repeat this everywhere you see the Chinese Gigafactory discussed: it's on mainland China, with a full political buy-in and support from the Chinese political hierarchy all the way from Shanghai to Beijing, which a BFD!

I think part of the confusion is the timeline. Originally, when China announced they were dropping the JV requirement for foreign automakers it was supposed to take effect in 2022. Ford and GM are already reportedly taking steps to wind down their JV operations into wholly owned ones.

I do not think that would stop Tesla from starting construction of their factory, but as to when they could ship from there for Chinese sales to avoid the 25 or 40% tariffs is unclear. From everything I have read nothing would stop them from shipping Model 3's to other parts of Asia or Europe from Shanghai before 2022.

 

[svp6]

I think it’s a good thing the guarantee was an opinion.

I am now preparing myself for a new onslaught of attacks against his person and company. More claims he’s a liar and fraud and con man and Tesla is a scam and funding wasn’t secured and he has no credibility and Tesla bankrupt any day now and SEC sending him to jail. On and on and on this is going to go for years to come. A crap ton of us are going to have watch out retirement and savings accounts continue to yoyo like crazy because of a group of nasty, vile, evil, horrible human beings

Agree with the anger for market manipulators - I wish there was a way to counter it more effectively. I did the same, showed friends and neighbors my model S and now model 3, but this is taking too long. Perhaps the narrative will change when in August and September model 3 sales show the true magnitude of the potential.

At the same time, I look at each dip as a buying opportunity - transferring some cash to have on hand Monday.

 

[dmckinstry]

And yes I'm being a jerk haha.

Still of I was promised a model 3. I'd be pissed if the old man took it for a year or two. What happened to my new car dad?

Couldn't afford the gift taxes until the car depreciates enough?

 

[gringotuanis]

Couldn't afford the gift taxes until the car depreciates enough?

Well it is nice of him to give the kid a 2 year old car anyway lol. Maybe it is taxes.

Or just leave the car in old man's name and have the kid pay the insurance until 25. I don't think you'd have to title it in his name.

 

[Yonki]

If anyone's feeling bored and wants to come fight some trolls, I could use a hand here...

Lycanthrope on Twitter

Happy to help, but do you have any instructions on HOW to help for those of us not schooled in Twitter warfare? I've liked your (and others' that I agreed with) posts in that thread (and congrats on getting a great reply from Elon). What else can I do?

 

[gringotuanis]

Couldn't afford the gift taxes until the car depreciates enough?

Well it is nice of him to give the kid a 2 year old car anyway lol. Maybe it is taxes.

Or just leave the car in old man's name and have the kid pay the insurance until 25. I don't think you'd have to title it in his name.

Agree with the anger for market manipulators - I wish there was a way to counter it more effectively. I did the same, showed friends and neighbors my model S and now model 3, but this is taking too long. Perhaps the narrative will change when in August and September model 3 sales show the true magnitude of the potential.

At the same time, I look at each dip as a buying opportunity - transferring some cash to have on hand Monday.

The FUD is a bad issue...but ultimately you're right...all it takes is profitability. Once Tesla can show it actually makes money...then it has a never-ending source of cash from its operations and no amount of short selling will matter. Tesla's only real problem is it doesn't make money. The shorts would get beat down if it makes a good profit. How many small businesses can go year in, year out with no profit. They don't,they close shop even after 1 year of negative business. A great business can make money almost from day 1 or within 1 or 2 years of starting. Tesla is fortunate it has alot of support.

 

[hobbes]

Ok, I've now read the NYT article, and: wow, just wow!

• European carmakers approached to invest in Tesla: "And while several big carmakers approached Tesla about funding a deal, people familiar with the discussions said, there were issues there, too. Some of those companies have their own reputational baggage. And Mr. Musk, proud that Tesla’s cars are made in America, did not want to let foreign interests dictate his decisions about manufacturing.".

Hm, we can conclude that non-US carmakers that do have reputational baggage approached Tesla, it doesn´t explicitely say that they were European. Though I agree that is a likely conclusion. (Fact-checked the article for the word European )

 

[beachbum77]

Ok, I've now read the NYT article, and: wow, just wow!

"Note that all these new investors, sovereign funds and European carmakers, were seeing Tesla worth at least $420 per share!" ...

While I agree with most everything in your post I have not read anywhere where there was agreement established on pricing.

From outside Tesla, no one has the visibility of the financial records to establish a price. It is now clear that no one other than Musk had an opportunity to research a market value for the stock. This process normally takes months of painstaking work to get to that number and it is normally done long before a price is ever announced. Dell is a perfect example. It sounds like Silver Lake got as far as being sure that it COULD be done. Based on their presentation, exactly how and at what price was not addressed.

 

[Matias]

Is it OK to ask/give clarification regarding post moved to snippines?

 

[dc_h]

Risk/reward

When I used to run a lot, I used to say “you can make up minutes in miles, but you can’t make up miles in minutes”. The point is establishing a sustainable pace. it’s not always possible to earn more and if everyone is chasing high yield returns the odds of 2007 redeux become much higher.
Anyhow, good luck. You seem to have learned a lot the last couple of years and work hard at trading.

 

[dc_h]

When you hold 1.8 million shares you use puts as insurance policies. The numbers may seem out of whack but I am sure the puts are cheap ones (low strike prices).

Why does UBS own Tesla and make recommendations but don’t acknowledge they have a position? If they are long or short, Colin should be acknowledging he or his company has a stake.

 

[BenPrice]

The market which didn‘t use the quick profit from 320 to 420 is going to reward TSLA now when the hope for 420 BO is gone ?

Good awakening tomorrow

Yes.

The market is millions of entities.

Some percentage of them stayed away from Tesla after the buyout news. Some other percentage didn’t want TslaP. Some positioned for a 420 buyout, some did not. Now everybody is free.

Free to return and so will their buying pressure while the sp is manageable.

I hope it drops premarket so I can go way otm this week. It’s going to pop. If the short interest decline trend continues it’s only more upward pressure. Is going to be the battle of midway.

 

[beachbum77]

Why does UBS own Tesla and make recommendations but don’t acknowledge they have a position? If they are long or short, Colin should be acknowledging he or his company has a stake.

The term is "Chinese Wall".

Chinese wall - Wikipedia