TSLA Market Action: 2018 Investor Roundtable

[CorneliusXX]

Apart from settling, I think Tesla should add two independent directors. The question is, who? I would kinda like to see Jigar Shah on the board. I think he can bring some really good leadership in the Energy space.

Also I get the impression that Kimbal may be taking a more visible role perhaps as a prelude to being named as Chair.

If the board were to move fast to add a few directors, it could also lower the stakes for the SEC suit. Naming Kimbal as Chair would take this further. There would be little upside for pursuing weak case in court, and the whole thing could be dropped.

But apart from how this would impact the SEC action, I think there are other benefits to enhancing the board as Tesla grows and expands into multiple industries.

Kimbal's interview makes much more sense now. I think he is being set up as "In case of emergency deploy another Musk". Longs will know that he will only act in consort with his brother as they have had each others backs since the Zip2 days (and I'm sure even before that). To everyone else, there is a different face talking to the camera.

 

[Singuy]

Price Target $420

I think it'll be a Monty Python skit if Tesla is trading at 420+ when Elon is on trial vs SEC. It'll be a hilarious case and may just end with Elon lawyers not saying anything and just displaying the ticker symbol.

 

[mongo]

They could, but from the description, it doesn't sound like that's what Tesla is doing. My guess would be that they have lots of short videos from everyday users, but need longer stretch videos of whole drives for training and/or validation. That's too much to ask of outside users, but employees would likely be willing to part with 300-400 hours of such video(+sensor data), particularly with such a generous reward for doing so. 350 hours * 100 employees = 35k hours of driving data. Sounds like a training set to me.

Yeah, would make sense to add external USB drive to the system for data logging then swap at work, or download via Wi-FI.

 

[MP3Mike]

Let’s connect some dots. 1000 employees are given a discount to test FSD, Elon expect all 1000 will be sold out by Saturday under the condition they pick up the car Sunday at the factory.

The discount was only for 100 employees.

 

[avoigt]

Elon Musk‏Verified account @elonmusk
Sorry for difficulties delivering your Tesla due to high volume! Critical to show that environmentally sustainable is financially sustainable.

2:23 PM - 28 Sep 2018

 

[heltok]

So no trial until feb 2019. Then Elon might get a fine and might have to step down or maybe not. And this changes the value of Tesla today by 14%? By then we will have had Q3 deliveries, Q3 earnings, Q4 deliveries, Q4 earnings, Europe Model 3 release, Model 3 new battery design, $35k Model 3, EAP, maybe FSD demos etc. This trial will be long forgotten by the time it happens. To me it feels like a -2 to -5%, not -14%.

 

[landis]

By trying to keep investors in the game that would otherwise be kicked out of a private deal. Cancelling the go private ended up kicking them out anyway by stock falling.

Why do you say this?
It didn't kick this one out.
Wild swings (e.g. between +18% and -17% in last two months) cause no lack of sleep here. Its been higher and lower. All long shares, no margin, 10 year timeline started acquiring after M3 reservation and before SC merger. Been dabbling with trading a few % in the last year.

BTW as a basic NYT digital subscriber for the first time added several replies this morning into the whacky comments on the Musk/SEC article from yesterday. This was core of one of them:

I am an actual investor in TSLA (and delighted Model 3 owner of four months if you must know) that appreciated the 'considering' tweet which kept me in the loop.

I also appreciated reversing course that allowed small fish investors like me to stay invested for the long term.
…

 

[tander]

The dip triggered rule 201... Ask me Monday who the player is...



Based on my understanding of California autonomous vehicle testing, Tesla can run FSD code with the EAP nag and avoid the reporting requirements. If the employees can handle the light torque without disengagement technique, that provides FSD validation.

400 hours x 100 employees x 60mph=2.4m miles of data and a pretty good sample size.

 

[mongo]

So no trial until feb 2019. Then Elon might get a fine and might have to step down or maybe not. And this changes the value of Tesla today by 14%? By then we will have had Q3 deliveries, Q3 earnings, Q4 deliveries, Q4 earnings, Europe Model 3 release, Model 3 new battery design, $35k Model 3, EAP, maybe FSD demos etc. This trial will be long forgotten by the time it happens. To me it feels like a -2 to -5%, not -14%.

Feb 1 is a pretrial conference, nothing will happen there (unless judge tells them to settle it outside court or such).

 

[CuriousSunbird]

Can someone clarify the following- is raising capital prohibited when CEO is under SEC investigation, or does it apply only if the company itself is under investigation?

I don't think it's prohibited in either case, so long as it's disclosed.

Good luck finding underwriters, though.

 

[mongo]

400 hours x 100 employees x 60mph=2.4m miles of data and a pretty good sample size.

FSD testing also means HW3 in limited quantities .

 

[Singuy]

By 2020, when the case is on trial, TSLA stock will be 650 dollars. The complaint will go from "misleading investors with no funding at 420" to "misleading investors wanting to take company private for a massive discount using an unfair evaluation".

 

[tander]

Elon Musk‏Verified account @elonmusk
Sorry for difficulties delivering your Tesla due to high volume! Critical to show that environmentally sustainable is financially sustainable.

2:23 PM - 28 Sep 2018

Google translate = killing q3 and going to be profitable, sec thing forgotten soon, tip toe quickly shorts

 

[Intl Professor]

So SEC, which should protect investors, creates a dip allowing shorts (anti-investors) to cover.
Then investors can't complaint to SEC itself: I'm in awe, this is evil genius.

On a more serious note: where is @neroden? Did he bail out?

I can't speak for him, obviously, but I have noticed the sky hasn't fallen yet.

 

[The Blue Owl]

Elon Musk on Twitter

 

[HopJokey]

Don't panic Elon says

Elon Musk on Twitter

 

[Ratanpara]

So no trial until feb 2019. Then Elon might get a fine and might have to step down or maybe not. And this changes the value of Tesla today by 14%? By then we will have had Q3 deliveries, Q3 earnings, Q4 deliveries, Q4 earnings, Europe Model 3 release, Model 3 new battery design, $35k Model 3, EAP, maybe FSD demos etc. This trial will be long forgotten by the time it happens. To me it feels like a -2 to -5%, not -14%.

It’s seems Institutions Tesla stock owners are weaker then individual owners , always overreacting. So Elon goes to trial he has nothing to loose, If he wins he proved his point, If he doesn’t then his punishment not likely to increase, probably similiar to what SEC is asking now.

 

[lklundin]

Yeah, 3s in transit for Q2 were 11,166 so that is an upper limit over production for deliveries.
(Delivery event at Fremont proper, fresh out of the gate???)

The following is not aimed at anyone specific, but is more of a general thing:

When the number of vehicles in transit at the end of the quarter is mentioned,
then I really miss a comparison with the number of vehicles in transit in the previous quarter.

Imagine if those two transit numbers were identical, then the quarterly production and delivery numbers would be equal.
Therefore, in order to properly assess the quarterly production and also deliveries, I would rather have the net
difference between the number of vehicles in transit at the beginning and at the end of the quarter - or
naturally both numbers, but I always tend to only hear the number for the end of the quarter (and can often
enough not remember the old one).

For Q3 I guess the relevant statement is:
Once we get the number of vehicles produced in Q3, and the number of vehicles in transit after Q2 (11166), and the number of vehicles in transit at Q3 end, the number of Q3 deliveries will be the Q3 production + the net difference between the start (11166) and end transit number (noting that this net difference can be positive, negative or zero).

This seems logical to me, but I never hear anyone talk about the net difference between vehicles in transit before and after the quarter.

Maybe it's just because accountants don't like negative numbers, the only thing I learned about accounting is that there have to be two columns of positive numbers, that have to sum up to the same. As a mathematician I find signed numbers much more appealing. Any physicist will tell you that things are in balance (in some meaning of the word) when the resulting force is zero, not when all the forces of one kind equals a bunch of other forces pulling the other way. But I digress.

 

[Fact Checking]

Can someone clarify the following- is raising capital prohibited when CEO is under SEC investigation, or does it apply only if the company itself is under investigation?

No such prohibition that I'm aware of: the filing of a civil suit cannot possibly come with penalties before there's a court decision, that would be prejudicial.

But note that it doesn't even matter: Elon specifically stated it during the Q2 conference that they don't want to and don't expect to raise capital in any future quarter.

They are likely cash flow positive now, despite still having Model 3 manufacturing line payments related ~$650m of capex outflow in Q3 and Q4, and likely won't need any outside equity financing ever again, similarly to Amazon.

 

[mltv]

Don't panic Elon says

Elon Musk on Twitter

Good to know he's not. or is this a suggestion he'd drag it out until his BFR is ready.