TSLA Market Action: 2018 Investor Roundtable

[SO16]

Tesla needs to tout the battery in SA. Tesla energy will be bigger than their vehicle segment.

 

[MP3Mike]

Google is your friend

Yes it is. Definition of charge:

6. to accuse formally or explicitly (usually followed by with):

It doesn't have to be something criminal. And the SEC did specifically accuse them formally "with failing to have required disclosure controls and procedures relating to Musk’s tweets."

 

[neroden]

So with all the positive outlook, why are we not stable above 310? It's killing me! Sell call now or wait til tomorrow?

This is simply a concerted effort at market manipulation by some group of criminals. It's got all the hallmarks: falsified news stories, etc.

 

[Smokey4141]

Hey Dan, Did you get your Model 3?

BB77, you made me chuckle... hahaha

Anyway, just wanted to let you know I appreciate your comments...
They seem to be fair and reasonable to both sides, and are pretty matter-of-fact in presentation...
Can't always say that for a number of posts.. :-O
Anyway, just wanted to say thanks..

 

[neroden]

Unreal. The articles should be changed or this is blatant stock price manipulation.

Please get timestamped screenshots of both FactSet's data and the articles with fake numbers, and post it over in the thread for collecting evidence of criminal stock price manipulation, so we can send it to the SEC.

Also push the pages into archive.org, and note the archived copy -- as someone else pointed out this is proof of date and time.

 

[Fact Checking]

My thought is that the Q3 CapEx guidance will end up being way high. The trend this year has been lowed estimates due to the not expanding the Model 3 line/ production capacity. Combine that with your thinking that GF3 cap ex will start next quarter and Elon's push for positivity, and Q3 with be even more favorable...

So my impression is the following: they reduced capex guidance once, in May, when they slashed or delayed all discretionary capex after the Moody's downgrade - in an effort to reach Q3 and Q4 positive cash flow.

What remained was mandatory capex: already contracted for orders, and installments of existing new equipment.

This is why they built the Sprung Tent early June: they had zero free capex, so they reused the automated Model 3 parts conveyance system which didn't work out.

Q1 and Q2 capex outflow was $655m, $620m, with $650m/$650m remaining for Q3 and Q4 (note, the split is unknown).

And that's why I think it's not Semi, Y or GF3, those were highly discretionary back in April/May.

 

[neroden]

I hope you don't take this the wrong way, but you are nowhere near ready for options trading (I'm really trying to help you by telling you this). You should read about what options really are, why they exist (i.e., what function they perform in the market), and most importantly how they are priced. Read about the Black-Scholes equation at least at a high-level and try to understand the big ideas. You don't need to go into the actual equation, but you should understand its inputs, what real-life elements they are modelling, and how those inputs impact the option price when their values change.

This time you got lucky. Take your profits and also a (long) break from option trading. Once you've built enough understanding that you can answer the basic questions for yourself, you can take the next step.

Trust me on this one.

What he said. It took me over a year of study before I started doing any options trades (and I've invested in stocks for decades before that). I only did one type of trade, which was very specifically designed to handle a specific situation (the one I'm still doing, selling cash-secured puts). I tried another type of options trade, and then realized I'd missed something important (tax considerations) and backed out of it at a loss. I tried a third type, and it was OK but it made me very uncomfortable so I won't do it again. Tried a fourth type of trade, same result as the third type.

 

[M3Rider]

...The present 10 lines have an output of 20 GW...

Second, adding 3 new lines will NOT increase production to 35 GWh, not even close. Production will more likely be increased to 24 GWh per year with 13 lines.

Tesla Gigafactory 1 to see Panasonic's new battery lines and new Grohmann machines in Q4

According to the analysts, Tesla head of investor relations Martin Viecha noted that upgrades from Grohmann, which are set to be sent to Gigafactory 1 by the end of Q3 or the beginning of Q4, would help module production become three times faster and three times cheaper.

 

[EVNow]

Given the price action of Yesterday & Today, I've to wonder whether we should expect another visit to 260s soon.

 

[Fact Checking]

I do need to push back on the non-overlapping bullet point: if they don't overlap, then they extend the timing until all the pieces are usable. They maybe have less robots, but they still need them to be installed at the same time.

I don't have a reference, but I'm reasonably sure that Elon said that they are moving the high capex threshold to after unveil and assessment of demand.

The mistake they made with the Model 3 is that due to exceptionally high demand they changed plans mid flight and compressed the schedule, rushed everything and then changed it all again.

All the while nobody senior thought of verifying the true progress of the Gigafactory battery pack subcontractor's significant software development work but relied on the (as it turned out false or misleading) progress reports ...

Tesla wanted a new baby to be delivered three times faster, by impregnating three women.

Elon doesn't want this "Production Hell" ever again. This is why I think the earliest Model Y large scale capex spending is going to start some time after the unveil: March 15, 2019.

Semi might be more advanced - but requires much less tooling I believe, due to the much lower unit count. I'd also expect assembly to start mostly manual.

I.e. the main capex at this point would be stamping machines for GF1 (or autoclaves if it's mostly carbon fibre), and construction work.

 

[Fact Checking]

Tesla Gigafactory 1 to see Panasonic's new battery lines and new Grohmann machines in Q4

"According to the analysts, Tesla head of investor relations Martin Viecha noted that upgrades from Grohmann, which are set to be sent to Gigafactory 1 by the end of Q3 or the beginning of Q4, would help module production become three times faster and three times cheaper."​

That's battery pack lines on the Tesla side.

The 10+3 lines are in the Panasonic area, producing raw 2170 cells. This is the primary bottleneck currently.

 

[oneday]

I.e. the main capex at this point would be stamping machines for GF1 (or autoclaves if it's mostly carbon fibre), and construction work.

GF1? Is it pretty much assumed they’re building semi at GF1?

What is the lead time on a stamping machine? Are these stock items? What about an autoclave?

They also need a stamping machine for GF3. Probably get an order for one of those soon. Perhaps the same one that they put in 2 years ago at Fremont?

 

[GBleck]

While I agree with you on principal and speaking in generalities, in light of the delivery tactics experienced by many (Including me) last week it may not be the best time to be discussing the delivery experience. Just sayin'.

Dan

The delivery experience at the start of September was quite pleasant and orderly.

 

[Joe F]

NOT a TSLA Market Action post:

So the negative talking points on CNBC continue. This time from an X GE exec. Wait, where's GE's stock at today? Right.

EDIT: Sorry, this was the wrong video. Incorrect link removed. Fat fingers I guess. Try:

CNBC's Fast Money on Twitter

 

[Krugerrand]

Let's face it: The shorts have endless pockets and no interest in profit. They just want to harm Tesla.

What could be the end of this game then? How could the shorts be stopped?

That’s a rhetorical question...but for the peanut gallery: going private.

Yeah, I was totally down for it, totally expected it to happen and totally disappointed when Elon followed that loyal heart of his, yet again. But unlike some, I don’t ever blame him for being true even when it’s not advantageous to me. He’s got to be Elon.

So here we are still bent over behind the woodshed, not having a good time.

 

[Remus]

I believe Q4 could be a repeat of 4Q2016. That year Q4 demand was pulled forward into Q3 as well to generate a profit. Tesla has the chance this time to expand their market for Model 3. But I do not see much improvement being possible for total production in the next three months. But we are currently guessing in the blind. Tesla has not updated any reservation numbers in over a year. Statements like "orders are increasing" are meaningless without context or reference points.

I believe Tesla has GREAT long term potential. But it has to survive the short term to get there.

But I thought 4Q2016 and later quarters were the overly aggressive push for Model 3 which introduced massive spending and production hell? Looks like Elon and team will not start another aggressive push quite yet?

And it seems to me the bottle neck is the cell production, and they are using occasional production line shutdowns to improve production and trying out burst rates. All these appear to indicate a more efficient Q4.

 

[KarenRei]

Tesla needs to tout the battery in SA. Tesla energy will be bigger than their vehicle segment.

Touting Tesla Energy when they're struggling to get enough cells to make Model 3s?

Come on Panasonic, ball's in your court

 

[brian45011]

Increase in accounts payable is a natural effect of increasing production volume. We'll see another round of cash generated in Q4 by increasing accounts payable, but it will be supplemented by a much higher amount of profit. When you have 60 days to pay your suppliers and you can build and sell the vehicles in substantially less than that time, increasing volume is a huge cash generator. The good news is that as long as your volume stays the same or increases, you never see those accounts payable biting you. OTOH, look at the effect of 15,000 vehicles in transit over end of quarter. Those are assets.

Agreed, most financial metrics increase as production volumes increase. We'll know more in a month. Between 2Q18 and 3Q18, autos produced increased by 50% Over the same period, Luvb2b's estimate is that AP/AL will increase by 277%.

Admittedly, AP/AL is not solely a function of auto production because vendor and contractor unpaid invoices included in AP are not just for auto GOGS expenses but also for Energy Generation/Storage, OpEx and CapEX. The correlation between deliveries and AL is even more attenuated. Accrued liabilities include:

"Accrued purchases; Payroll and related costs; Taxes Payable; Financing obligations, current portion; and Accrued warranty, Taxes Payable included value added tax, sales tax, property tax, use tax and income tax payables. Accrued purchases reflected primarily liabilities related to the construction of Gigafactory 1, along with engineering design and testing accruals. As these services are invoiced, this balance will reduce and accounts payable will increase."


​

 

[Fact Checking]

GF1? Is it pretty much assumed they’re building semi at GF1?

My speculation, but it's standing on several strong legs, including what I believe to be an unintentional "tell" from one of the Tesla executives in a CC.

So I'm 90%+ certain, but not 100% certain.

What is the lead time on a stamping machine? Are these stock items? What about an autoclave?

AFAIK none is stock, and both have very high lead times.

Tesla will have to wait another 2-3 years before the stamping machine ... fire sales from erstwhile ICE assembly plants begin ...

They also need a stamping machine for GF3. Probably get an order for one of those soon. Perhaps the same one that they put in 2 years ago at Fremont?

Is there a link/article about the one from 2 years ago?

 

[SpaceCash]

FWIW, TSLA max pain sits at 295 flat for this Friday's options expiry.

I expect price to remain JUST where we're at, or with any luck, we will finally get a rock hard stimulus that will spike us up and out of the current tiresome holding pattern