TSLA Market Action: 2018 Investor Roundtable

[davecolene0606]

If you go back and read, I saw (and still do) the Nikola as the long-distance winner. Tesla is not building a sleeper/long distance semi. If you look at all of the BEV semis in development they are all day cabs which makes sense. That way they go out and return to their hub at the end of the shift. Without improvements in battery technology, the weight will not work for long distance hauls. The Megacharging network would have to be larger than the Supercharger network. As it is the Tesla Semi is being planned for only specific hauls within its planned capabilites. The same goes for the Nikola One. But with the much longer range of 1,000+ miles they will need fewer refill stations along its initial runs.

So ur saying there are as many truck stops as there are gas stations? Wrong. How do you know there won’t be a sleeper version of Semi? You don’t. Is 600 nonstop miles not long distance? It is. Really, hydrogen+fool cells? Why even bother. Is a hydrogen network built out yet? No. Is the whole of North, Central and South America, Europe, Asia, Australia wired for electric already? It is. If a mega charger needs to be located in the middle of no where, PV/WIND + Powerpack... boom megacharger no deliveries needed.

Donn... Please....

Fire Away!

 

[Zhelko Dimic]

So why would SL make a presentation about how they have the " ability to manage" when that's literally their job? It's like hiring burger kings and then they make a presentation about the "ability" to make burgers..no *sugar* Sherlock....

Plus if Elon doesn't have any funding, then what is SL promising here? You can't have any confidence in any ability to take Tesla private if funding is no where to be found unless you are some miracle worker who can wish money into existence. First question all of these advisers would asked should be "okay lets see the money..okay good we can manage you guys going private"...or else first sit down meeting would end real quick.

After seeing your questions, I don't feel we have enough common ground to have meaningful discussion. My perception is that you have very naive understanding of how corporate world works.
I'm not claiming I'm right, but I've been in senior positions in couple of corporations and I've seen some deals. I'm not anonymous and you can find my resume on Linkedin; should you want to evaluate if I have any idea what I'm talking about...

 

[CorneliusXX]

You can call it what you like. But the numbers are taken directly from the Tesla quarterly reports. I am not making up the numbers. If you disagree with my numbers show us where I am wrong.

Last August Jon McNeill was offered a $700,000 bonus to reduce inventory. I wrote then I believed it was really retention bonus to keep from leaving right as Model 3 was getting off the ground. So the bonus would keep him at Tesla until year end. He was gone by the time Q4 was reported in February. He did an awesome job reducing inventory from 8,000+ to just over 2,000 by year-end. So far in 2018 we are now right back up where we were this time last year. Only no one seems to be making the same effort this time.

Are you interpreting the numbers correctly, or taking them out of context to support your own narrative?

 

[beachbum77]

Did you read my post Donn? To begin with yes, it makes the most sense to focus on large companies with point to point deliveries, in fact the first Tesla Semi is a perfect fit for that market. But over time, not only could a sleeper unit be added, but the longer truck frame would allow for significantly more batteries, which will no doubt be more efficient by then as well, so 1,000 miles per charge is easily in reach.

Hydrogen in vehicles makes absolutely no sense to me anyway, just because of it's volatility. Which owner of a gas station or truck stop is going to install hydrogen filling stations which have the potential of explosions that would destroy entire blocks and kill hundreds? It would only need to happen once. The liability insurance in itself would be way to expensive for the owners of those facilities to take the chance.

Remember the Hindenburg?

You now have H2 stations all over CA. Royal Dutch Shell is building pumps at exisitng stations as fast as they can in the UK. Japan and China are both growing H2 capabilities.

But we are getting off topic of this thread. Feel free to PM me and I can link you to Keith Malone who heads up the California state Hydrogen movement. His newsletters are fascinating with all of the stuff going on around the world.

And for those that may not know, every H2 vehicle is an EV. So if you any of you think I am pro ICE you have definitely not been following my articles.

 

[EVMeister]

For years Musk and everyone else ignored the word "profit". No one cared. Suddenly, in the last 6 months, that is now the focus. Why? I have my theory, but I'd like to hear what you all think.

Probably because he now sees a tangible path to profitability and sustainable growth. I'm sure it has always been an ambition of his, the difference is it is now a realistic prospect. So he's confident enough now to push the inevitable.

 

[Johan]

But if Tesla cannot get sustainably profitable fast, it may all be for nothing.

Why?

Tesla is in a phase where they are growing their revenue way faster that most manufacturers of any product. So far they've put all of it back in to the business. On top of that they've raised money several times as you are well aware of. We all know that they are now aiming for sustained profitability, but why is that really important? If profitability comes in 5 more years, but they keep executing well and growing, what's the rush?

You know as well as the rest of us that the big reason why they want to be profitable and have self-sustained growth is to become less dependent on the markets for capital. It wasn't for nothing that Elon wanted to de-list Tesla from the stock market…

 

[beachbum77]

Are you interpreting the numbers correctly, or taking them out of context to support your own narrative?

I find that personally insulting. HA! lol

I write on facts I find and try to make sense of them. I even put my calculations right in the articles for anyone to read and analyze. No one has been able to refute my numbers since they are not mine. They are Teslas. But be my guest to go and do your own analysis.

I have said before the narrative in the press has turned decidely negative in the last year. I honestly cannot explain it. If there is some covert mission underway I am certainly not a part of it.

But I can tell you when I first started writing about Tesla there were dozens of "bulls" writing as well on SA. They are mostly gone. When I have PM'd them to ask why, they seem to have moved to other stocks. I enjoyed the back and forth discussions and articles responding to other's articles. As all of you can see my writing has greatly diminished in quantity. Mostly due to my available time but also there is not enough bullish material to respond to so the fun is pretty much gone. It is hard to have a conversation from both sides of the fence if no one is on the other side. When I do write an upbeat, suggestions type article I get beat up from both sides.

 

[davecolene0606]

I certainly think some do. Many small investors do.

But as I have tried to explain I am not a stock "short". I am an options trader as far as Tesla and a few other highly volatile stocks are concerned. I play the swings in both directions. Bottom line is I think Tesla's products have HUGE potential. It is how the company is operated that concerns me. There is little doubt their electronics, batteries and drive motors are way ahead. But if Tesla cannot get sustainably profitable fast, it may all be for nothing. For years Musk and everyone else ignored the word "profit". No one cared. Suddenly, in the last 6 months, that is now the focus. Why? I have my theory, but I'd like to hear what you all think.

Sustainable includes ability to grow, as Elon noted in the Q2 call, growth rate IS limited by physics and logistics and at a certain point throwing more money at it results in inefficient use of capital. Tesla has been exceptional in wise deployment of the capital it has raised so far. I expect recent emphasis on sustainable positive cash flow to fund operations, expansion and cash flow arises from the reality of hitting a rate of growth rate that is sustainable without inefficient use of capital. My expectation is that both the BOD and Elon realize this.

If current trends hold that sustainable positive cash flow and positive EPS is enough to continue the current expansion rate without being held hostage to WS for further capital raises. This of course is disconcerting to any entity whose business is raising fees, I mean capital, (see what I did there?) and only adds to the number of parties interested in alternative truths as to what is really happening at Tesla.

Fire Away!

 

[Dan Detweiler]

At the end of Q2 there were 1,400 unsold Model 3's. This is in addition to the 11,166 that were in transit. That ois direct from Tesla's own numbers. I have a unit here in Jacksonville that has been sitting here since May 3. I will be swinging by later today to do an inventory update. There are seven other that last week were marked inventory. If you read the TMC threads one buyer placed an order on Aug 1 (I believe) and took delivery seven days later on Aug 8. Most of the 450,000 are waiting for the SR.

But do not take my word for it. Go read the threads on here. Others are doing the same thing and monitoring VINs that are sitting for weeks. Better yet, start your own review at your local DC.

Then you have to account for the VINs that are being rejected by the delivery center personnel. You know about those, right?

And before I get accused, this is not FUD. These are facts backed up by others on TMC and M3OC.

Dude...go away

Dan

 

[wipster]

I find that personally insulting. I write on facts I find and try to make sense of them. I even put my calculations right in the articles for anyone to read and analyze. No one has been able to refute my numbers since they are not mine. They are Teslas. But be my guest to go and do your own analysis.

I have said before the narrative in the press has turned decidely negative in the last year. I honestly cannot explain it. If there is some covert mission underway I am certainly not a part of it.

You're Donn Bailey from Seeking Alpha and you're not part of it? LMFAO!!!!

 

[EVMeister]

I think the only person he's fooling is himself.

 

[davecolene0606]

I agree. Our family fund includes holdings my Dad purchased dating back to the late fifties as something he wanted to leave to my sister and I. But highly volatile companies can be easily manipulated in my opinion.

And my attitude is based on the reality of the markets. At 63 I have just learned to roll along in their wake. I stopped trying to swim up river a long time ago. Occassionaly they get surprised. Enron, Valient, Elizabeth Holmes and her nonsense. 401k plans were meant to strip the public (most of whom have no clue how to manage money) of their defined pensions. It took the responisibility for funding retirement from companies and gave it to the public. Where are 99% of those funds? On Wall Street. Thank Gerald Ford for that one. $trillions got wiped put in 2008. We did not even get an apology.

Imagine where Tesla would be if prodcution had been matched to demand all along while growing in phases. I believe it would have been profitable long ago. There would not be 33 million shares short. There would be no FUD. The cars speak for themselves. When Tesla stumbles it has been from self inflicted wounds. (200,000 Model 3's by the end of 2017, then it was "5k per week"). If Tesla would stop with long range promises "here's what is coming in 2020" and instead was doing surprise enveilings of "here is what is coming next month" (a la Apple) buyers would be paying a premium for the cars. Instead they had 8,000 unsold units at the end of Q2 (that had nothing to do with 200K). Why? Because the focus has been on production goals for years, when the focus should have been on deliveries. Read the TMC threads. The delivery experience is down the drain for many buyers. "We love the car...but"... It did not have to go this way.

This is exactly the concept of sustainable ramp rate, not just with manufacturing but distribution as well. Are there snafus here and there. Yup, it’s called learning curve (vertical) and disrupting a model necessitates that vertical part. They are catching up very much as fast as Apple did when it delivered its first IPhones, Remember the lines around the block at its stores? Running out of inventory hours into launch days? It got smoothed out, just as Tesla is working to smooth out its delivery process.

It would be cool to be able to wave a wand and accommodate 450,000 people instantly and, you will remember that production was brought forward by a year due to the unexpected and unprecedented demand for M3. Reality is M3 is a year ahead of original deployment plans (I mean prior to product launch plan).

By the way, your paragraph #2 is spot on, you are a complicated one aren’t you...

Fire Away!

 

[davecolene0606]

You now have H2 stations all over CA. Royal Dutch Shell is building pumps at exisitng stations as fast as they can in the UK. Japan and China are both growing H2 capabilities.

But we are getting off topic of this thread. Feel free to PM me and I can link you to Keith Malone who heads up the California state Hydrogen movement. His newsletters are fascinating with all of the stuff going on around the world.

And for those that may not know, every H2 vehicle is an EV. So if you any of you think I am pro ICE you have definitely not been following my articles.

No where near the deployment rate of the SuperCharger network (and by extension a megacharger network) in either cost or logistics.

Fire Away,

 

[aubreymcfato]

Not saying anything new, but...
I'm reading Network science by Albert-László Barabási¹: he's famous for his mathematical models of real networks (like the Web), and his definition of scale-free networks, which are basically the famous "long tail" that Anderson described some years ago.
This kind of networks (and power laws) are all over the place: this is why you have few hubs (Google, Facebook, Amazon) that collect a huge percentage of the links of the web, and the millions of remaining websites just keep the change. Power laws follo the famous Pareto principle: 20% of the nodes keep 80% of the links... And these proportions could be even more skewed.

The work of Barabási is to study and recreate these kind of networks, discovering new ways to end up with the same higly asymettrical distribution. Not all real networks are the same, but somehow they end up being really similar.

Another intersting variable, for Barabási, is "fitness", meaning that every link created by one node in the network remains forever. For example, a company that makes every new customer into a loyal partner.
He demonstrated mathematically that if the fitness of one node is high enough, this node can become an hub even if its initial conditions in the network are way worse than other nodes. For example, he's the new shop in town, or the new EV startup in a world of huge, century-old OEMs...

I found this model² directly interesting for Tesla. This is why the M3 rampup is so important: every new customer will be a EV owner, and a Tesla customer, for life. This accelerates the rise of Tesla as an hub, a one of the few winners in his own network. And remember that power laws follow an exponential curve: Tesla will be exponentially bigger than his peers, provided that continues to do good (and steady). Every new car is a link more in the network, and Tesla needs it to grow and go on top of the others.

¹ Albert-László Barabási - Wikipedia. He's also the author of Link, which I recommend to everyone.
² Bianconi-Barabási model, for those of you that are interested

 

[Electroman]

Instead they had 8,000 unsold units at the end of Q2 (that had nothing to do with 200K). At the end of Q2 there were 1,400 unsold Model 3's

Donn - you think you are smart when you slip in the word 'unsold' in there, as if people in this forum are stupid to get sucked in by that. I was following you to the most part in that post, and was thinking.. hmm he makes a good point, until you slipped in the your theory of 'unsold' inventory. Then you lost all credibility.

We all know they were trying to get close to 200k but not exceed by end of Q2. But that doesn't mean production has to slow down. Simply store and flood the deliveries in July. But then their delivery logistics didn't really beef up to the increased load. No big deal. Just like how they fixed the production issues, they will fix deliveries too. Growing pains

When I have PM'd them to ask why, they seem to have moved to other stocks.

I don't think so. SA is a Tesla hater's hell hole. Every other comment reeks of, 'hang the fraud; give him 20 years; 9 next month'. No reason for any Bulls to hang in there.

 

[beachbum77]

Why?

Tesla is in a phase where they are growing their revenue way faster that most manufacturers of any product. So far they've put all of it back in to the business. On top of that they've raised money several times as you are well aware of. We all know that they are now aiming for sustained profitability, but why is that really important? If profitability comes in 5 more years, but they keep executing well and growing, what's the rush?

You know as well as the rest of us that the big reason why they want to be profitable and have self-sustained growth is to become less dependent on the markets for capital. It wasn't for nothing that Elon wanted to de-list Tesla from the stock market…

Okay.
1) First. If there are no profits there is nothing to "put back in the business". You are just burning cash.
2) It becomes important when investors decide they have thrown enough money your way.
3) The markets have served Tesla much better than staying private ever could have. That is why everyone strives to go public. It is all about access to cash. The only reason I know to go back private is to eliminate the vast majority of shareholders and concentrate ownership and future profits among a much smaller group of investors. Dell is a perfect example.
4) The business schools are full of files on companies that had explosive growth and then imploded almost overnight. You need balance. Tesla is feeling this right now. The current infrastructure cannot support 5,000 deliveries a week. That should be obvious to anyone reading the forums and threads. It is hurting the wonderful delivery experience early buyers enjoyed and wrote about. Now the threads are full of cancellations, rejected cars, and over-flowing lots at the DC's. 75 DC's across the country cannot keep up. So Tesla is between a rock and a hard place. To get the numbers to reach a profit it was expected to be 5,000 M3.
5) Many have stated this and I have to agree that the "pros" of going private did not exceed the "cons". That is why this was such a head-scratcher to many. As a CEO you need to be thick-skinned. It is right there in the job description. Same as posting on this thread! LOL

 

[Thekiwi]

Ok people. Tesla is staying public. Now is the time to take a stand against the FUD. I know that TMC is a nice safe place to validate your beliefs in Tesla and the mission, but it's a bit of an echo chamber. While the best, most knowledgeable Tesla minds debate endlessly how many cars Tesla will make and how big Tesla will get, there is a war going on for the hearts and minds of the unwitting who are begging duped into shorting Tesla and spreading lies by parking lot truthers and a constant flow of lies and made up facts.

Just ask 10 random people about Tesla and Elon. You will be shocked at how many echo fud. Social media is a powerful tool, it elected a President many of you despise, yet you huddle in the corner muttering how great Tesla is with little or no actual resistance. It's too bad that more people don't read TMC before deciding what to invest in, but they don't. It's too bad traditional media doesn't come to TMC before posting a dumbass article. They take the short cut off searching for $tsla on Twitter and only see a slew of hot garbage.

It is time to get off your arses and counter some fud. I'm only asking that your search for $tsla and find 10 lies per day to correct with facts and a bit of humor. That is the only cure for fud poisoning.

If the best of the best minds from TMC did only that, fudsters would be overwhelmed and we could start to take control of the narrative which will have an impact on what Traditional media broadcasts. It's time.. the fud will ratchet up with the latest chaos around the sec/public/private debate. I emplore you to dive in and take no prisoners! Remember, facts and humor. Keep it light and it will spread.

I don’t intend to do anything. Reality speaks for itself. Future Tesla earnings reports and the increasing number of Model 3s in the wild is all the defence Tesla needs.

Most of the bozos who are bearish / short on Tesla are the same bozos that we’re short when the stock was at $30. Since then the stock is up 1000%. They are idiots and fools who will once again lose their money. Best not to bother wasting a single moments thought on them.

 

[Richgoogol]

This is wrong.

Tesla cars sold in China from this factory will suffer 25% tariff because the tesla factory is a solely owned foreign entity. Even if it is in Shanghai.

This is correct. At least what’s been told from the video. Not sure if it’s true information.

 

[Johan]

Okay.
1) First. If there are no profits there is nothing to "put back in the business". You are just burning cash.

Wrong. With a given level of revenue you could scale back on R&D, investments in to factory infrastructure, growing your staff etc. If you do that your costs go down (duh) and all of a sudden the exact same revenue now yields a profif in stead of a loss. But of course it does so at the price of stunted growth. Even I can understand this, having no formal training in economics (I'm a medical doctor by day for God's sake).

2) It becomes important when investors decide they have thrown enough money your way.

Correct. What in your reading of the tea leaves suggest that we're at a point where investors are not willing to invest in Tesla?

3) The markets have served Tesla much better than staying private ever could have. That is why everyone strives to go public. It is all about access to cash. The only reason I know to go back private is to eliminate the vast majority of shareholders and concentrate ownership and future profits among a much smaller group of investors. Dell is a perfect example.

Tesla went public out of pure necessity. It was the only thing that could save the company in those days. They had almost nothing to show in order to convince any big investor to fund them (Toyta had cautiosly done so with the RAV-4 collaboration but were getting cold feet). It's abundantly clear that could they have avoided going public they would have, and would likely never have gone public at all. SpaceX is a perfect example. I know of other good reasons to want to go back private, Elon said it best himself: As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

4) The business schools are full of files of companies that had explosive growth and then imploded almost overnight. You need balance. Tesla is feeling this right now. The current infrastructure cannot support 5,000 deliveries a week. That should be obvious to anyone reading the forums and threads. It is hurting the wonderful delivery experience early buyers enjoyed and wrote about. Now the threads are full of cancellations, rejected cars, and over-flowing lots at the DC's. 75 DC's across the country cannot keep up. So Tesla is between a rock and a hard place. To get the numbers to reach a profit it was expected to be 5,000 M3.

When they delivered 500 cars a week their infrastructure also struggled to keep up. As longs a Tesla grows at a relentless pace their infrasctructure is always going to be barely adequate.

5) Many have stated this and I have to agree that the "pros" of going private did not exceed the "cons". That is why this was such a head-scratcher to many. As a CEO you need to be thick-skinned. It is right there in the job description. Same as posting on this thread! LOL

I for one think it was quite remarkable for Elon to first go all-out on his intent to go private, but then cold-headedly just come out and say that after taking in the reactions of investors and listening to advice the plan was cancelled. I wouldn't worry about the thickness of his skin.

 

[beachbum77]

Donn - you think you are smart when you slip in the word 'unsold' in there, as if people in this forum are stupid to get sucked in by that. I was following you to the most part in that post, and was thinking.. hmm he makes a good point, until you slipped in the your theory of 'unsold' inventory. Then you lost all credibility.

We all know they were trying to get close to 200k but not exceed by end of Q2. But that doesn't mean production has to slow down. Simply store and flood the deliveries in July. But then their delivery logistics didn't really beef up to the increased load. No big deal. Just like how they fixed the production issues, they will fix deliveries too. Growing pains




I don't think so. SA is a Tesla hater's hell hole. Every other comment reeks of, 'hang the fraud; give him 20 years; 9 next month'. No reason for any Bulls to hang in there.

I think you are word-smithing. When I say unsold it is to differentiate from in-transit. Now yes part of the unsold new units are floor units and test drive cars. but 8,000? At the end of Q4 all three models had just over 2,000 unsold inventory units around the world accumulated since Q3 2016. That produced a big bump in revenue, but the discounting hurt the bottom line.

If Tesla was firing on all cylinders almost every car should have been in transit as they opened the flood gates on July 1. Many should have been accumulated at the DCs waiting to go out at the stroke of midnight. On July 1 my local DC had zero S & X units waiting to be delivered. Inventory has since been growing.

As a former dealer, inventory was important because it ate up our flooring line and increased interest expense. That is why I was surprised no one seemed to care about Tesla's growing inventory until McNeill was given that $700,000 bonus. So much focus was being directed at production it seemed no one was watching the rest of the operation. And I am seeing that again this year.

Tesla just added hundreds of new cars to their website inventory. Most are 100D and P100D models with discounts up to $22,000 and lots of miles. I am still unclear how these can be sold as new. We could not have done that in California.