TSLA Market Action: 2018 Investor Roundtable

[KarenRei]

Heck, even the estimate in your link only assumes 50k Model 3s this quarter.

 

[KarenRei]

Something we agree on! A stock buyback is a really idiotic idea.

That's quite a list. Do you really believe all of this cash can be internally generated? My rough guess is $20 billion for what you listed. Obviously this can be done over time but still, I do not see much of this coming from internal cash generation.

I wouldn't go as high as $20B (at least not in the ~3 year timeframe... with a longer timeframe, sure). But it's certainly a lot. And no, I don't think it will all be internally generated. Rather, once Tesla has been profitable (esp. for two quarters) it will make it much easier for Tesla to borrow on favourable terms. Hence scaleup can be accomplished via a combination of internally-generated revenue and debt.

Which - it should be mentioned - is the strategy that Tesla has stated during the investor calls.

 

[Fact Checking]

Shortsville Times: Tesla unable to sell Model 3s, stores them on trailers

The above photo was taken yesterday on an Oregon interstate, where car carrier trucks packed with Tesla cars have caused a major traffic jam. We have received reports of similar incidents along the west coast.

According to a Tesla spokesperson these shipments of cars are part of the "7 day delivery push" where thousands of Model 3's would be shipped to new owners this week - but industry experts Dana Hull, Jim Chanos, David Gelles, Mark Spiegel, Andrew Left and Bob Lutz expressed deep concern about this approach.

According to Bob Lutz, "as everyone in the car industry knows, newly manufactured cars are first shipped to dealerships, where they are often stored for months until they are sold by expert car salesmen who know how to connect with customers on a personal level. These cars were obviously never in any dealership showroom, and this year Tesla's showrooms scored dead last 10th year in a row in pressure-sales ranking, so how can Tesla possibly claim that these cars were already sold? They haven't even hired a single car salesman as far as I know. It makes no sense and I believe the only explanation for this is that Tesla is trying to hide its unsold inventory, by storing them on trailers."

"The attempt by Tesla to characterize these shipments as already sold Model 3 inventory looks very much like clear-cut securities fraud that reminds me of the days when I shorted Enron" Jim Chanos added, stressing that his lawyers advised him to point out that technically he is not accusing Tesla of fraud. Dana Hull questioned Tesla's ability to finance the waves of class action litigation that would certainly stem from this incident.

Our panel of industry experts also called for the ouster of Elon Musk as the CEO of Tesla: Musk has overseen a disappointing manufacturing output increase of over 300% over the last 12 months, demand for Tesla's products is lackluster, and he was also responsible for high trading losses for investors like Chanos, Spiegel or Left. "The SEC and DOJ needs to represent the interests of all investors, not just that of Tesla shareholders" Spiegel added.

(Elon Musk has not responded to our repeated attempts to contact him over Twitter.)

Copyright (c) 2018, Shortsville Times, Chief Editor @HG Wells.

 

[CorneliusXX]

I'd like to point out that Elon's announcement that Tesla intends to buy back the $920m 2019 convertible notes is a stock buyback program in essence: if that debt was paid in new shares (as the convertible nature allows), it would dilute shareholders.

But Tesla should certainly not use free cash to buy back stock this year or next year - maybe they could start buying back convertible notes from the open market later this year, which at current prices would probably be cheaper than paying them back in cash. But by the time Tesla has the cash to do that, share price will probably rise significantly, which is going to make those 2019 convertible notes significantly more expensive.

A quasi equity product like a convertible note could be interpreted as you describe. However I would argue that buying back stops the issuance of new shares rather than buys back already issued shares. Good arguments could be made both ways.

 

[Fact Checking]

A quasi equity product like a convertible note could be interpreted as you describe. However I would argue that buying back stops the issuance of new shares rather than buys back already issued shares. Good arguments could be made both ways.

I suspect it depends on what market expectations are. When Tesla issued the notes they registered the new shares with the SEC, and could issue them if note holders request conversion.

If market participants expected these shares to be issued above $360 then this could have acted as a sell barrier/ceiling at around $360. By announcing that they won't issue new shares, the barrier property of $360 should be weaker next time TSLA reaches those levels.

 

[elasalle]

Shortsville Times: Tesla unable to sell Model 3s, stores them on trailers

The above photo was taken yesterday on an Oregon interstate, where car carrier trucks packed with Tesla cars have caused a major traffic jam. We have received reports of similar incidents along the west coast.

According to a Tesla spokesperson these shipments of cars are part of the "7 day delivery push" where thousands of Model 3's would be shipped to new owners this week - but industry experts Dana Hull, Jim Chanos, David Gelles, Mark Spiegel, Andrew Left and Bob Lutz expressed deep concern about this approach.

According to Bob Lutz "As everyone in the car industry knows, newly manufactured cars are first shipped to dealerships, where they are often stored for months until they are sold by expert salesmen who know how to connect with customers. These cars were obviously never in any dealership showroom, and this year Tesla's showrooms scored dead last in the country in pressure-sales ranking the 5th year in a row, so how can Tesla possibly claim that these cars were already sold? They haven't even hired a single car salesman as far as I know. It makes no sense and I believe the only explanation for this is that Tesla is trying to hide its unsold inventory, by storing them on trailers."

"The attempt by Tesla to characterize these shipments as already sold Model 3 inventory looks very much like clear-cut securities fraud that reminds me of the days when I shorted Enron" Jim Chanos added, stressing that his lawyers advised him to point out that technically he is not accusing Tesla of fraud. Dana Hull questioned Tesla's ability to finance the waves of class action litigation that would certainly stem from this incident.

Our panel of industry experts also called for the ouster of Elon Musk as the CEO of Tesla: Musk has overseen a lackluster manufacturing output increase of only 300% over the last 12 months, and was also responsible for high trading losses for investors like Chanos, Spiegel or Left. "The SEC and DOJ needs to represent the interests of all investors, not just that of Tesla shareholders" Spiegel added.

(Elon Musk has not responded to our repeated attempts to contact him over Twitter.)

Production Hell!! The Bats are out of Hell

 

[KarenRei]

"The attempt by Tesla to characterize these shipments as already sold Model 3 inventory looks very much like clear-cut securities fraud that reminds me of the days when I shorted Enron" Jim Chanos added, stressing that his lawyers advised him to point out that technically he is not accusing Tesla of fraud.

Post upgraded from "Like" to "Love" due to this line

 

[LordAstinus]

Shortsville Times: Tesla unable to sell Model 3s, stores them on trailers

The above photo was taken yesterday on an Oregon interstate, where car carrier trucks packed with Tesla cars have caused a major traffic jam. We have received reports of similar incidents along the west coast.

According to a Tesla spokesperson these shipments of cars are part of the "7 day delivery push" where thousands of Model 3's would be shipped to new owners this week - but industry experts Dana Hull, Jim Chanos, David Gelles, Mark Spiegel, Andrew Left and Bob Lutz expressed deep concern about this approach.

According to Bob Lutz, "as everyone in the car industry knows, newly manufactured cars are first shipped to dealerships, where they are often stored for months until they are sold by expert car salesmen who know how to connect with customers on a personal level. These cars were obviously never in any dealership showroom, and this year Tesla's showrooms scored dead last 10th year in a row in pressure-sales ranking, so how can Tesla possibly claim that these cars were already sold? They haven't even hired a single car salesman as far as I know. It makes no sense and I believe the only explanation for this is that Tesla is trying to hide its unsold inventory, by storing them on trailers."

"The attempt by Tesla to characterize these shipments as already sold Model 3 inventory looks very much like clear-cut securities fraud that reminds me of the days when I shorted Enron" Jim Chanos added, stressing that his lawyers advised him to point out that technically he is not accusing Tesla of fraud. Dana Hull questioned Tesla's ability to finance the waves of class action litigation that would certainly stem from this incident.

Our panel of industry experts also called for the ouster of Elon Musk as the CEO of Tesla: Musk has overseen a disappointing manufacturing output increase of over 300% over the last 12 months, demand for Tesla's products is lackluster, and he was also responsible for high trading losses for investors like Chanos, Spiegel or Left. "The SEC and DOJ needs to represent the interests of all investors, not just that of Tesla shareholders" Spiegel added.

(Elon Musk has not responded to our repeated attempts to contact him over Twitter.)

Copyright (c) 2018, Shortsville Times, Chief Editor @HG Wells.

I couldn't help it...

Miguel PeraIv0 on Twitter

So hilarious!!!!

 

[mongo]

I couldn't help it...

Miguel PeraIv0 on Twitter

So hilarious!!!!

Obviously need to switch to Tesla Semis


Edit: For the record, I neglected to notice this was Market Action. Thought it was a cross posted image after I controlled the urge to post the first time .
On topic: only slightly down in pre-market.

 

[KarenRei]

Obviously need to switch to Tesla Semis

We all of course know that's coming. Tesla, SpaceX and Boring Company are obviously going to switch 100% to Semi and be the first adopters. Guaranteed business which won't complain about any teething problems

 

[Nathan]

The stock market is a mechanism for discounting and assessing future cashflows, To assess future cashflows, it is necessary to analyze the probability of multiple possible future scenarios. If this is a thread dedicated to trying to predict Tesla's future stock price, then Brian is right to raise such issues.

But if it is just a cheerleader thread then you are probably right to recommend ignoring them.

Not being a cheereader if you are suggesting that. Simply saying this was discussed endlessly weeks ago and was hoping that we could move on to what I consider more important issues right now. That subject of SEC investigations etc will be resolved ultimately and then we can discuss.

 

[TheMrX]

Option_Sniper on Twitter

Interesting

 

[Krugerrand]

Thanks for noticing. And let me take this opportunity to say how glad I am to be back with you all, and to apologize for the FUDster behavior which led to my involuntary absence.

I am not sure whether it was my foolish prediction that the SP would go below $300, or my expression of doubts as to the veracity of the going private tweets (full disclosure - I am affiliated neither with the DoJ nor the SEC) or even my switch back from a long to a short position which led to my ouster. Whichever it was, I hope that nobody here relied on my opinions in forming their own views.

Looking forward to further spirited discussions.

Garbage in; garbage out.

 

[Tslynk67]

Option_Sniper on Twitter

Interesting

In one of the responses: Also “TESLA 3Q DELIVERIES SEEN SLIGHTLY BEATING CONSENSUS: GOLDMAN”

Ah yes: "Goldman Sachs analyst David Tamberrino maintains Buy on Tesla Motors (NASDAQ: TSLA) price target of $210.00.The analyst expects Q3 deliveries..."

Huh? His current status is SELL. In any case, how can they have a BUY rating when the SP is $100 above their price target?

Colour me confused!

 

[KarenRei]

TheTeslaGuy on Twitter

TheTeslaGuy‏ @GuyTesla
Replying to @GuyTesla @Bob_Mayo and
Hilarious highlight of the day: The Jaguar dealers that had just moved in next-door to Tesla Littleton commented on all of the truck carriers of cars showing up, and asked, “where are you going to put all of these?” And the answer was “They aren’t staying.” Sad faces...

 

[cheshire cat]

In one of the responses: Also “TESLA 3Q DELIVERIES SEEN SLIGHTLY BEATING CONSENSUS: GOLDMAN”

Ah yes: "Goldman Sachs analyst David Tamberrino maintains Buy on Tesla Motors (NASDAQ: TSLA) price target of $210.00.The analyst expects Q3 deliveries..."

Huh? His current status is SELL. In any case, how can they have a BUY rating when the SP is $100 above their price target?

Colour me confused!

If he has any to get rid of @$210. Sign me up

 

[hobbes]

Car sales set to crash after dealers flood the market to beat new green tests
Interesting. Article states ICE manufacturers have been flooding their Dealer networks with cars before new emission standards come into effect due to VW Dieselgate. Since Tesla is the only auto manufacture that only reports figures once car is sold to individuals and all others report figures once cars are sold Dealers, last few months have of ICE auto sales have been exaggerated and soon they will need to reconcile the numbers, expecting a crash in sales. Perhaps this should make it to front back news as Tesla will certainly buck this trend.

Note that this article is from The Telegraph of the UK, so it probably doesn´t apply to the US directly. Is the WLTP test cycle even used in the US at all?

 

[KarenRei]

Note that this article is from The Telegraph of the UK, so it probably doesn´t apply to the US directly. Is the WLTP test cycle even used in the US at all?

No.

 

[SO16]

FUDsters-the job!

In a last week before some data... I expect tons of FUD. Nothing new here.
I want to characterize the job.

When I was young older people taught me that each job is respectable, decent, honorable. I believed them.

12 years ago I visited memorial centre where WWII nazi concentration camp had stood. There were many across the Europe. This one is in Croatia/Jasenovac. It was mentally exhausting for me even to listen all these stories how "human being" can be evil, brutal...
I remembered one story particularly that shocked me.

There were the killing day. The executioner asked the old man how is he filling before dying? Are you afraid?
The old man said: Son, you shouldn't worry about me. I have lived long enough. You should worry what kind of job you have.

I cried. I cried then and now..each time I remember that.

You should worry what kind of job you have.

When will TSLA owners get sick of giving money to the fudsters by believing their nonsense and selling at a loss?

 

[shootformoon]

When will TSLA owners get sick of giving money to the fudsters by believing their nonsense and selling at a loss?

Exactly. I always blame weak longs more than shorts. Shorts have only no more than 40M shares of ammunition. Longs have unlimited funds. Just keep buying until shorts have to buy back.