TSLA Market Action: 2018 Investor Roundtable

[TNEVol]

Why the hell is this stuff on the market forum?

Dan

Don't tug on Supermans cape Dan.

 

[TradingInvest]

Yeah, so beyond the possibility that they know something we don't know, I think it's due to the following main factors:

• Corporate bond traders tend to be pretty risk averse, conservative guys, to whom the following news are serious red flags:
  • Elon taking a puff of weed (and they don't notice how inexperienced Elon was, and how he explained that he doesn't smoke weed),
  • Elon being portrayed by the NYT as a mental wreck in tears, on the verge of collapse, (and they don't watch YouTube so haven't seen the video of a happy Elon in Fremont on the same day the NYT conducted an interview without publishing as much as a transcript),
  • Elon referring to bankwuptcy several times in the recent past (and they don't know that he has done this countless times already, it's a motivator for him)
  • New CAO leaving a month into the job, during which Elon wanted to go private and then decided not to.
    
  • Elon tweeting in anger, etc.
  • Current Q3 analyst estimates are still negative and don't show Tesla making cash
• Also to them bankwuptcy is the #1 risk Boogeyman they don't normally hedge against.

While most Wall Street hedge fund managers would shrug off the above (they've probably done worse ...) and concentrate on the fundamentals, bond traders not so much, it's extremely outside their normal cultural comfort zone of polished corporate high finance.

So basically peak FUD and viscous character attacks against Elon convinced another category of conservative investors to turn bearish.

If Tesla starts generating cash in Q3 and Q4 then it probably won't matter: Tesla won't need financing. Moody's could downgrade Tesla to below toilet paper and it probably wouldn't matter: Tesla raised $680m of local capital in China recently for the Chinese Gigafactory, via local loans only that create no corporate liability for Tesla shareholders, no equity financing was required and no new corporate bonds were issued either.

Note that bond prices reacted strongest to similar incidents in the past as well, and recovered big time not on Q2 financials primarily, but on Elon's performance during the Q2 conference call: composed, deferential to analysts, conservative. Their kind of guy.

We even had bond prices of $94 right after the CC I think - and the fundamentals are even better today: the Model 3 was the top grossing car in the U.S. in August, with record sales and still over $10b in pre-orders.

So yeah, I think there's a high likelihood that the 2025 bonds are mispriced, due to Elon being Elon and FUD.

If Q3 numbers beat estimates and meet guidance then I fully expect a perfect CC call from Elon again, which should bring bonds above $90+ again.

Not advice, of course.

It's relatively easy to manipulate Tesla's bond. Nobody wants to push it up. Shorts have the incentive to push it lower. Think about who is dealing with the CDS on Tesla.

In reality, Tesla has near zero chance to bankrupt. If the worst comes, the company can be sold (likely at a price much higher than today). We won't get to that point because there is so much upside, the cash situation will quickly improve. I am happy to keep adding shares with new cash. Hopefully I can hold onto them for 20 years.

 

[HG Wells]

Purple squirrels are not mythical.

Does this mess up your analogy?

WOW thank darwin I don't have any young children. They would want one of those.

 

[DaveT]

People are quick to discount Gene Munster on this board, but the guy has earned his reputation as one of the best Apple analysts over the years. He’s been very bullish on Tesla and Elon, but understandably the recent months of Elon’s antics have exhausted his patience. Another note is that Munster is likely in touch with a lot of institutional funds and he has a pulse on their sentiment. He is not just talking from conjecture. It’s very likely large institutional fund sentiment has shifted negative and that concerns Munster.

It makes sense to have a stronger and more independent Tesla board to act as a check and balance so that there’s a group Elon needs to answer to.

But I do understand the concern that a stronger board would slow Elon down or discourage him. Perhaps Elon has an earth-shattering idea he wants to do at Tesla that would be great, but the board resists due to practical reasons.

Overall though, I hope that Munster and others can punt on this issue for another few months at least while Tesla reports Q3 profit and Jerome takes reign of Tesla Automotive. Stock also will likely rebound quickly and once we’re over 350, optimism and euphoria sets in. And as long as Elon doesn’t screw up on Twitter or elsewhere, then everything will look rosy soon. At least that’s the plan.

 

[Krugerrand]

People are quick to discount Gene Munster on this board, but the guy has earned his reputation as one of the best Apple analysts over the years. He’s been very bullish on Tesla and Elon, but understandably the recent months of Elon’s antics have exhausted his patience. Another note is that Munster is likely in touch with a lot of institutional funds and he has a pulse on their sentiment. He is not just talking from conjecture. It’s very likely large institutional fund sentiment has shifted negative and that concerns Munster.

It makes sense to have a stronger and more independent Tesla board to act as a check and balance so that there’s a group Elon needs to answer to.

But I do understand the concern that a stronger board would slow Elon down or discourage him. Perhaps Elon has an earth-shattering idea he wants to do at Tesla that would be great, but the board resists due to practical reasons.

Overall though, I hope that Munster and others can punt on this issue for another few months at least while Tesla reports Q3 profit and Jerome takes reign of Tesla Automotive. Stock also will likely rebound quickly and once we’re over 350, optimism and euphoria sets in. And as long as Elon doesn’t screw up on Twitter or elsewhere, then everything will look rosy soon. At least that’s the plan.

None of the intro of your post makes him right about Tesla’s board and what should be done in that regard. Things get a little rough and it’s ‘run for the exits!’.

 

[X Fan]

View attachment 333030
Just received an email (lame btw) from an Audi of Naples sales rep stating that the e-Tron reservation window will open on September 17th.

IMO, the Mercedes unveiling was a bust and should have no impact to TSLA price....I wonder if Audi's product will have a similar or negative impact to SP (albeit short lived once Tesla's quarterly results are unveiled).

Thoughts?

btw: I'm "overjoyed" & lol at his "THANK GOODNESS" comment......

fyi re: Audi's USA competitiveness vs.Tesla...I received this today from Audi sales rep (I asked him a few questions):

Vehicle Delivery: We expect them to be here at the end of the 1st quarter
# of e-TRON's at dealership: Zero. We will only receive ordered e-TRON for an extended period.
Trade: Will not be able to trade with other dealers on the e-TRON
Sales Price: Pricing will be available at the same time it will be available to me, Monday 9/17, at midnight.

 

[imherkimer]

Purple squirrels are not mythical.

Does this mess up your analogy?

But isn't it obvious that, despite the misinformation about being mythical, these purple squirrels are killing it?
I mean, we have to acknowledge that this is some serious innovation!
It's epic! That color combo with the fully extended luxury tail!
The competition: grays and browns and reds, all of them, are generations behind, and in total denial!
That's why they always maintain that those purple squirrels are mythical, don't even exist! And anyway their features are impossible!
"Simply not supported by the laws of biophysics, and could never be produced," said two squirrelly sources familiar with the matter.
Deep down, all the traditional grays, and browns, and reds, know that even if they started today trying to produce something similar, they would have to go through so many iterations to even come close, it would take much longer than many anticipate.
And in the meantime, of course, they would be undermining the seamless and voluminous production of boring yet efficient grays and reds and browns that has been achieved over the millennia!
It's like they just keep proving they have no idea what it takes!
Really, these purples are taking squirrel to a whole new level!
While the squirrelly incumbents around the world always talk a big game, and are certainly out in much bigger numbers globaly, actual competing models for these beautiful purple are still very hard to find!

 

[oneday]

Purple squirrels are not mythical.

Does this mess up your analogy?

He’s talking about these purple squirrels.

You may have missed them, because they are often in disguise.

 

[Intl Professor]

A company as large as TSLA really needs an independent board.

I know what you mean in an ideal world, but I don't know of any U.S. board that is independent. The big guys all share votes on each other's salary—on the other board.

 

[bhzmark]

They all but confirmed that the semi would be built at the Gigafactory.

When did they do that?

 

[oneday]

When did they do that?

This is based on the last conference call when Elon was asked about building Semi at GF1, Elon indicates it was a good question but said they couldn’t comment. So it is speculated that meant they are.

 

[TradingInvest]

People are quick to discount Gene Munster on this board, but the guy has earned his reputation as one of the best Apple analysts over the years. He’s been very bullish on Tesla and Elon, but understandably the recent months of Elon’s antics have exhausted his patience. Another note is that Munster is likely in touch with a lot of institutional funds and he has a pulse on their sentiment. He is not just talking from conjecture. It’s very likely large institutional fund sentiment has shifted negative and that concerns Munster.

It makes sense to have a stronger and more independent Tesla board to act as a check and balance so that there’s a group Elon needs to answer to.

But I do understand the concern that a stronger board would slow Elon down or discourage him. Perhaps Elon has an earth-shattering idea he wants to do at Tesla that would be great, but the board resists due to practical reasons.

Overall though, I hope that Munster and others can punt on this issue for another few months at least while Tesla reports Q3 profit and Jerome takes reign of Tesla Automotive. Stock also will likely rebound quickly and once we’re over 350, optimism and euphoria sets in. And as long as Elon doesn’t screw up on Twitter or elsewhere, then everything will look rosy soon. At least that’s the plan.

I trust Elon and the company. They created the most compelling car on the market as promised. I added more shares Friday and today, will prepare more cash to add shares if another great entry point happens. Margin can hurt you, if you don't want to be hurt, don't use margin.

Elon uses Twitter and interviews as marketing tools. It worked really well in the past. Elon said at some point they might do some fun ads. I think now it's a good time. As revenue goes up, the company can afford to spend some money to let the public know Tesla products are indeed superior.

In the early years, Elon said those who are repeatedly in the hot seat don't fit this organization. Elon's view is if you are not a good fit for Tesla, it's better for both sides that you leave as soon as possible. The latest accounting officer likely is an example (based on everything the guy commented recently). Some people left because they can't handle the heat, some are simply not capable for the job. People leaving is generally viewed as not good for the company, but it helps for the most capable people to quickly ascend to take more responsibilities. The situation should get better going forward.

 

[Zhelko Dimic]

I just read his piece on CNBC. This stood out to me:

“There was a vote earlier in the year to remove Musk as chairman, but the voting structure of Tesla's stock requires a super majority to pass changes. The motion failed.”

Did a check, >86 million shares voted against that change and <17 million voted for it. I’ve said this before: if you (proverbial you, I’m speaking of Munster here) show yourself to be fundamentally dishonest, I don’t care what you have to say. That statement was fundamentally dishonest.

Huh, I'm surprised... If you accuse Gene Munster of being against Tesla, you are indeed very poorly informed.
You must not have been paying attention, to not see him hundreds of times defending Tesla in media, and being a counterpart to many attacks last few years.
And he's legendary ex-APPL analyst, bigger name than any current analyst covering TSLA.

 

[The Blue Owl]

None of the intro of your post makes him right about Tesla’s board and what should be done in that regard. Things get a little rough and it’s ‘run for the exits!’.

Munster is not running for the exits, though. You may disagree with his opinion on the Tesla board and Elon's role, but he's far from a fair weather friend to Tesla. He's one of the most ardent believers in the potential of this company and he has been heavily invested for a long time.

 

[Sudre]

While I object to Gene Munster’s sensationalism, his ideas are sound. A company as large as TSLA really needs an independent board.

I don’t mean to be critical of the company I love. But there will be growing pains along the way.

An independent board will give you the Chevy Bolt and the I-pace with no charging network. Independent boards have no interest in the risks Tesla is taking to change how people think about cars.
Does GM have an independent board? Honestly asking.
If they do, how’s that working out for them and their bankruptcies?

 

[The Blue Owl]

I just read his piece on CNBC. This stood out to me:

“There was a vote earlier in the year to remove Musk as chairman, but the voting structure of Tesla's stock requires a super majority to pass changes. The motion failed.”

Did a check, >86 million shares voted against that change and <17 million voted for it. I’ve said this before: if you (proverbial you, I’m speaking of Munster here) show yourself to be fundamentally dishonest, I don’t care what you have to say. That statement was fundamentally dishonest.

There is nothing dishonest in that fragment. He doesn't say that the motion failed because those proposing it didn't have a super-majority. He just stated two independent, but relevant, facts.

 

[MikeC]

There is nothing dishonest in that fragment. He doesn't say that the motion failed because those proposing it didn't have a super-majority. He just stated two independent, but relevant, facts.

The “but” implies that it was the need for a super majority that caused the motion to fail.

 

[AWDtsla]

There is nothing dishonest in that fragment. He doesn't say that the motion failed because those proposing it didn't have a super-majority. He just stated two independent, but relevant, facts.

It is dishonest, and worse than an outright lie.

 

[The Blue Owl]

The “but” implies that it was the need for a super majority that caused the motion to fail.

Point taken. I missed that.

 

[humbaba]

There is nothing dishonest in that fragment. He doesn't say that the motion failed because those proposing it didn't have a super-majority. He just stated two independent, but relevant, facts.

...putting the two sentences back to back implies they are related, a basic grammatical structure used every day. And that, boys and girls, concludes today's lesson in understanding English.