TSLA Market Action: 2018 Investor Roundtable

[Artful Dodger]

As of posting, I did not find him here yet. Writing is like a DNA or fingerprint and you can identify a person how he puts sentences together as well as some other indications. But what do I know

Indeed. Plus, it's been automated:

Analyze My Writing

 

[RobStark]

At that growth rate GM will reach their 2017 sales figure (8.6m units) and be a pure EV company in just on three decades.

Nice to see them doing something, would like them to do a bit more.

China has a CARB like system where 10% of car sales are supposed to be ZEV in 2019.

But there are extra credits here and there for long range, fast charging, PHEV etc.

So I don't know exactly what percentage of GM China sales in 2019 will actually be BEV/PHEV but I know it will be a lot more than this year.

Then the percentage keeps going up after that. So GM MUST increase BEV production by more than CAGR 20%.

 

[Tslynk67]

Okay, what? U mean that little $50 pop? Bah, Chump change!

View attachment 344541

It was on 400 when I looked - should have screen-capped it, soz!

 

[TradingInvest]

Ok, Waymo is routinely given 100 billion dollar valuations. I have seen estimates as high as 175 billion.

So, Tesla’s autonomous driving program is basically given a negative valuation?

Tesla is the world’s dominant EV producer (that’s right, I said it!). It’s is pulling away from its competition in a ridiculous fashion over the past three months. AND it has a fairly advanced autonomous program that seems to be picking up steam. Depending on who you ask, maybe ahead of Waymo. Let me not mention the other revenue streams.

So how is this a 50 billion dollar company?

Show us a profit Musky baby, and watch a SpaceX launch in your portfolio.

I see extreme inefficiencies in this market. Place your bets.

I think it's a possibility Q3 profit may not do much to stock price, both longs and shorts should know it's a profitable quarter. The Wall Street earnings estimate looks bad because 1/3 of them are shorting TSLA, I assume they just give bad numbers to depress Tesla stock. Each of the bearish analyst probably has an internal Q3 number which is not so negative. For this reason, I guess both sides will buy short term Calls, which in turn could magnify the "buy rumor, sell news" effect. Also TSLA has a chance to rally if a large short decides to cover after they see the Q3 result and realize Tesla is unstoppable. Retail longs probably will max out before CC, many with leverage, so they can't do much after a good CC. Professional longs have no reason to push the stock up, if they want to increase holding, they would rather want to see it go lower... This is all my speculation, don't pay attention to it.

On the other hand, I agree with you the $50B market cap is completely wrong. Tesla's self-driving unit should worth north of $100B today, even though it still has a long way to go to achieve full self-driving. Good engineers should be able to realize Tesla's approach is the most promising real solution. Wall Street people have zero chance to understand this stuff. All they can talk about is number of disengagement per million miles, which means nothing if you don't look at the underlying design and details.

After more than a century, the Wall Street people still haven't figured out how to value companies properly. Let's look at a few recent examples: Nvidia was valued at $13B three years ago. The company was spending $2B to develop AI chips. The CEO said the value of that AI chip is going to be huge. Very few people listened. Three years later Nvidia is valued $156B. Nvidia was mispriced by a wide margin three years ago. Similar example with Netflix. Lot's of people on Wall Street don't know why Netflix's market cap went up 40 fold in 6 years. Anyone who pay great attention to quarterly earnings probably don't understand long term investment. CC is important, but the most important part is not the earnings numbers.

Tesla's downside is limited for the reasons we discussed in the past. The upside in 10~15 years? could be a few hundred billion, could be a few trillion. All I know is I keep buying with new cash. No margin. I don't care about getting rich quick, rather I want to make sure my account will do well in the long run. When shorts rig the stock, I'm not forced to sell, instead, I buy more shares. I guess shorts hate investors like me.

 

[Artful Dodger]

How is this proof? I could post an image just like this using Photoshop. Except Elon would be sitting next to me in the passenger seat.

Ahaha, no! Photoshop won't accurately create those lens flares and rainbow effects.

 

[Artful Dodger]

It was on 400 when I looked - should have screen-capped it, soz!

No problem, the per-minute NASDAQ quotes are still there until the Pre-market session opens the following day:

Netflix, Inc. (NFLX) Interactive Chart

Here's the aftermarket high from the per-minute NASDAQ data:

Date: 2018-10-16 16-05
ASP: 395.11
Vol: 1,341,055

So from close that's a nice 395.11 - 346.40 = $48.71 pop.

But, CHUMP CHANGE compared to what we expect from TSLA.

Cheers!

P.S. Did you notice the deep deep right at 17:00 hrs? Looks like somebody executed 200 call contracts at $346.40 (closing price)? Let me know if you have any insights on this action.

 

[MXWing]

I think it's a possibility Q3 profit may not do much to stock price, both longs and shorts should know it's a profitable quarter. The Wall Street earnings estimate looks bad because 1/3 of them are shorting TSLA, I assume they just give bad numbers to depress Tesla stock. Each of the bearish analyst probably has an internal Q3 number which is not so negative. For this reason, I guess both sides will buy short term Calls, which in turn could magnify the "buy rumor, sell news" effect. Also TSLA has a chance to rally if a large short decides to cover after they see the Q3 result and realize Tesla is unstoppable. Retail longs probably will max out before CC, many with leverage, so they can't do much after a good CC. Professional longs have no reason to push the stock up, if they want to increase holding, they would rather want to see it go lower... This is all my speculation, don't pay attention to it.

On the other hand, I agree with you the $50B market cap is completely wrong. Tesla's self-driving unit should worth north of $100B today, even though it still has a long way to go to achieve full self-driving. Good engineers should be able to realize Tesla's approach is the most promising real solution. Wall Street people have zero chance to understand this stuff. All they can talk about is number of disengagement per million miles, which means nothing if you don't look at the underlying design and details.

After more than a century, the Wall Street people still haven't figured out how to value companies properly. Let's look at a few recent examples: Nvidia was valued at $13B three years ago. The company was spending $2B to develop AI chips. The CEO said the value of that AI chip is going to be huge. Very few people listened. Three years later Nvidia is valued $156B. Nvidia was mispriced by a wide margin three years ago. Similar example with Netflix. Lot's of people on Wall Street don't know why Netflix's market cap went up 40 fold in 6 years. Anyone who pay great attention to quarterly earnings probably don't understand long term investment. CC is important, but the most important part is not the earnings numbers.

Tesla's downside is limited for the reasons we discussed in the past. The upside in 10~15 years? could be a few hundred billion, could be a few trillion. All I know is I keep buying with new cash. No margin. I don't care about getting rich quick, rather I want to make sure my account will do well in the long run. When shorts rig the stock, I'm not forced to sell, instead, I buy more shares. I guess shorts hate investors like me.

Reaching just Mobileye parity is 15.3 billion in market cap right there by itself. That’s the price intel paid.

I don’t wish for a MMD tomorrow but if it happens I’m in. Happy to take more shares out of circulation.

 

[Papafox]

Q3 is all about positive cash flow. I hope there's a profit, but most of all I hope we show the world that Tesla has generated more than $500 million in positive cash flow. $700 million would be even better. This is a huge part of the answer to the bears that keep chiming "How are they going to pay the debt?" What will be important is for Elon and Deepak to lay out the how and why of Q4 and 2019's early quarters and explain expected average sale prices, estimated quantities of vehicles that will be produced and delivered, and how the M3 gross margins will grow to 25%. How well those two get the message across in the ER and conference call will greatly affect how long the media stays negative and how the shorts will behave in the coming months.

Shorts are planning to dismiss Q3 as a one-time wonder, or perhaps as a two-time wonder along with Q4. Elon and Deepak have to take this argument head on at the Q3 ER and CC.

 

[NicoV]

For @neroden...

Elon Musk on Twitter

Seems like there is money again to invest.

 

[MXWing]

Q3 is all about positive cash flow. I hope there's a profit, but most of all I hope we show the world that Tesla has generated more than $500 million in positive cash flow. $700 million would be even better. This is a huge part of the answer to the bears that keep chiming "How are they going to pay the debt?" What will be important is for Elon and Deepak to lay out the how and why of Q4 and 2019's early quarters and explain expected average sale prices, estimated quantities of vehicles that will be produced and delivered, and how the gross margins will grow to 25%. How well those two get the message across in the ER and conference call will greatly affect how long the media stays negative and how the shorts will behave in the coming months.

Shorts are planning to dismiss Q3 as a one-time wonder, or perhaps as a two-time wonder along with Q4. Elon and Deepak have to take this argument head on at the Q3 ER and CC.

There are other intangibles that matters as well. What I felt really supported the strong Q2 conference call was the Model 3 expanding beyond just the A4/3 Series market. Consumers were trading UP from cars like the Prius to get the Model 3.

If the conference call is November and we find out the Model 3 crushes a marquee car like the Accord or Camry in October that’s going to be really scary disruption.

Outselling the Camry and Accord or coming close means Tesla’s are in people’s garages. People are knowing the brand, their families and friends are knowing the brand.

I mean I see group S3X everywhere along the coasts but it takes time to reach the interior. Model 3 is definitely helping to make that happen.

 

[NicoV]

ps : I'd take his tweet at its face value. He had a review where the managers told him they have a problem that needs his attention - and he decided to fix the problem.

Looks like Elon has a Star Trek management style: ‘Make it so, number One’.

 

[TradingInvest]

Q3 is all about positive cash flow. I hope there's a profit, but most of all I hope we show the world that Tesla has generated more than $500 million in positive cash flow. $700 million would be even better. This is a huge part of the answer to the bears that keep chiming "How are they going to pay the debt?" What will be important is for Elon and Deepak to lay out the how and why of Q4 and 2019's early quarters and explain expected average sale prices, estimated quantities of vehicles that will be produced and delivered, and how the M3 gross margins will grow to 25%. How well those two get the message across in the ER and conference call will greatly affect how long the media stays negative and how the shorts will behave in the coming months.

Shorts are planning to dismiss Q3 as a one-time wonder, or perhaps as a two-time wonder along with Q4. Elon and Deepak have to take this argument head on at the Q3 ER and CC.

It's also important that Tesla gives conservative predictions going forward. Giving optimistic predictions then can't meet it will hurt credibility and hurt aggressive longs. It has great marketing effect if every quarter the news is "Tesla beat the estimate" instead of "Tesla missed again". I understand Elon didn't have much choice in the past.

 

[Papafox]

It's also important that Tesla gives conservative predictions going forward. Giving optimistic predictions then can't meet it will hurt credibility and hurt aggressive longs. It has great marketing effect if every quarter the news is "Tesla beat the estimate" instead of "Tesla missed again". I understand Elon didn't have much choice in the past.

I have a similar thought but lean toward "achievable goals." I think the Q3 production and delivery numbers were slightly weighted to the conservative side, which allowed for a few surprises along the way (delivery hell) and still allowed Tesla to fall within the projections. Tesla, please give us more of this.

 

[NicoV]

Media sentiment is changing. The pendulum is swinging to the positive side, in the light of undeniable facts. This Dutch article (Tesla bereikt belangrijke mijlpaal met Model 3) acknowledges that they had fun with the Model 3 production issues, but that the delivery of the 100Kth Model 3 is very impressive (given that it took Nissan 4 years to reach that number), and more importantly, states that it is incomprehensible that a small brand like Tesla achieves this, and that the competition has nothing to compete with.

 

[sundaymorning]

Bankers are reportedly approaching Tesla as debt payments loom

I’m loving the quiet confidence that Tesla is exhibiting lately. What could Tesla possibly have up their sleeves to decline future loans from banks? No analyst took Elon seriously when he stated that he didn’t need or want to raise capital, they aslo underestimated Tesla’s ability to borrow from China... what can Tesla possibly do to pay off debt, besides borrowing? Could it possibly be profits? hmmmm...

 

[MXWing]

Bankers are reportedly approaching Tesla as debt payments loom

I’m loving the quiet confidence that Tesla is exhibiting lately. What could Tesla possibly have up their sleeves to decline future loans from banks? No analyst took Elon seriously when he stated that he didn’t need or want to raise capital, they aslo underestimated Tesla’s ability to borrow from China... what can Tesla possibly do to pay off debt, besides borrowing? Could it possibly be profits? hmmmm...

Or..

Teslaquila sales.

Gross margins on top shelf liquor I would predict to be higher than the SR Model 3.

 

[avoigt]

BMW, Board Member Klaus Fröhlich: “I think the discussion about electro-mobility is a little bit irrational,” he said.

If you watch the world around you and call it irrational there are in my opinion only two potential reasons for it.

Either you are a genius and can see what know body does or its time to assess what you can do to help yourself to work on a better alignment about the word around you and your perception of it.

Yes, I do talk about talking to a Doktor for mental health issues.... but maybe he is a Genius?

 

[Fact Checking]

I am pretty sure they're using GP106, not GP102. So it's actually 1280 + 256 (+ 256 on HW2.5), or an 80/20% theoretical split (~71%/~29% on HW2.5).

Indeed, and this significantly lowers the $600-$700 price I estimated for HW2.5: GP106 chips should be much less expensive than GP102 chips.

An equivalent GPU would be the "NVIDIA GeForce GTX 1060 Max-Q" discrete GPU chip for laptops with a 80W TDP, which has a similar boost clock of 1,480 MHz:

NVIDIA GP106 GPU Specs
NVIDIA GeForce GTX 1060 Max-Q Specs​

Price of the board should be similar to discrete GPU106 based NVIDIA cards, such as the "GeForce GTX 1060 6 GB":

NVIDIA GeForce GTX 1060 6 GB Specs​

except that the Tesla board has 8 GB of GPU RAM.

The GTX-1060 board retails for around $200-$300, and I suspect Tesla gets the GP106 for much less than $200 in bulk quantities, maybe even below $100. So the Tesla AI chip's direct per-unit cost savings should be less than $100, not the $400-$600 I estimated previously.

This is also more in line with what @oneday noted:

They said on the last conference call,

Elon Musk said:
"And it costs the same as our current hardware and we anticipate that this would have to be replaced, this replacement, which is why I made it easy to switch out the computer, and that's all that needs to be done."​

Regarding GPU clock speed:

But it's actually more complicated than that, since clock speeds will matter. For example a typical base clock of 1480 MHz for the GP106, and a GPU clock on the Parker SoC's ranging from 854 MHz to 1465 MHz on the Parker SoC(s) ... If just one Parker SoC is used and at the lowest clock, then you'd have a ~90%/10% split, and at the other end with both Paker SoCs and fastest clock, it would be a ~71% / 29% split. We have no idea what clocks are involved here, plus it is likely the Parker SoCs are less efficienct / have more latencies and overhead due to likely having slower memory than the GP106 does, and other reasons, since iGPUs are often second class citizens when it comes to accessing data and so forth. I would guess the realistic performance splits to be somewhere around 95%/5% to 85%/15% depending on clocks and whether both Parker SoCs are in use.

I'm pretty certain that when AutoPilot is active (i.e. when the car is driven) the chips typically just clock up to the maximum frequency. It's all liquid cooled, so there should be no thermal throttling.

My guess is that low power mode matters mostly when the car is not driving, you'd still want to have vehicle control software running and react to certain sensor inputs (such as temperature sensors to keep the BMS running, or the security system, or cabin overheat protection, etc.) - but full AutoPilot processing of the video+sensor feeds is not required. In this scenario the discrete Pascal GP106 chip is turned off entirely, and the two Parker SoC's are in low power mode. (Maybe even the integrated GPU is off in this case and only some of the ARM cores are running.)

Regarding memory bus speed: using already trained, static neural nets with no back-propagation are exceedingly simple calculations of combining the weights with the input values, where the number of weight values in their neural nets far exceeds the limited hardware cache sizes of Pascal chips, so I suspect their NN throughput is primarily memory bus limited. So if the memory performance of the GP106 and the Parker chips differs significantly, that would have a direct effect on NN processing performance of the integrated GPUs.

An interesting question is whether Tesla is going to replace the Parker SoC's as well, or only the GP106 discrete GPU chip. The safest iterative step would be to only replace the discrete GPU and keep the Parker SoC's, this would leave much of the ARM v8 based vehicle control platform unmodified. Making their own chip is a complex enough step already, they'd want to reduce the HW3 migration risks as much as possible.

But, these are just guesses and wild speculation, and I've been wrong a number of times in this short discussion already.

 

[Johan]

Ahead of today's trading, which will certainly be interesting with the seeming wind in TSLA's sails and possibly NFLX dragging the whole halo-stock-sector up, here's some uplifting news from Norway.

As per Bilsalget i september new car sales in Norway for September of 2018 shows that out of 10620 new cars sold pure BEVs were 45% and only 12,4% diesel cars (record higs and record lows).

Now image what happens when Model 3 goes on sale in Norway...

 

[Tslynk67]

Except that the Tesla board has 8 GB of GPU RAM.

Is that including the new chairman and two independent members?