TSLA Market Action: 2018 Investor Roundtable

[elasalle]

Model S/X packs are assembled at Fremont, and are never processed through GF1.

To workaround tariffs for S/X, a model that is similar to Tillsburg (Europe) , could be set up ...
Right now it is S/X sales that are suffering from the 55% tariffs

Edit(Add)..For Model 3, might as well start simplified production line (the one under tent) .. that took 2-3 months to setup. For this as well, until stamping press etc are all in place, send the parts over from Fremont & Sparks

(production line with Kuka robots might we easier to set up ) .. than the rest of the parts ... ~ cheers

 

[Tslynk67]

So how will these be purchased, in one transaction or strategic buying so as not to spike the SP too much?

Curious!

 

[mongo]

So how will these be purchased, in one transaction or strategic buying so as not to spike the SP too much?

Curious!

Direct issue from Tesla (new shares) using predetermined pricing (close on date y or some such) no impact on market (beyond minor dilution)

 

[TradingInvest]

Actually, this happens already: when a Model S/X is sold in China, the cell was made in Japan, shipped to Nevada, assembled into a battery pack, mated in Fremont and the shipped back over the Pacific to China.

Shipping 2170 cells would be pretty cost efficient, as they are dense and can be packed tightly.

Also, the primary short term goal would be to avoid the 40% tariffs, shipping a full car costs maybe $1,500, cell shipments would be significantly cheaper.

Once the Shanghai cell lines are up and running they could substitute.

Edit: correction by @Artful Dodger.

There is a good chance the 40% tariff will be removed by next year.

 

[elasalle]

Direct issue from Tesla (new shares) using predetermined pricing (close on date y or some such) no impact on market (beyond minor dilution)

Only impact is SP going up based on EMs purchase ... Shorts/MM could make EM suffer, by ensuring SP moves up super rapidly (prior to his purchase)

 

[Fact Checking]

Direct issue from Tesla (new shares) using predetermined pricing (close on date y or some such) no impact on market (beyond minor dilution)

Also, this makes sure the proceeds will flow to Tesla directly, so Q4 profits won't be hurt by the $20m SEC fine.

 

[Artful Dodger]

This shouldn't affect the point I tried to make: 18,650 cells are already shipped over the Pacific twice. Shipping 2170 cells once should not be a big cost - until GF3 cell production ramps up.

Tesla would likely also consider having Samsung manufacture some 2170 automotive cells in Korea for assembly at GF3, if that's allowable under China's import regime. Tesla owns the IP, and could easily have a 3rd party make the cells.

 

[Fact Checking]

Tesla would likely also consider having Samsung manufacture some 2170 automotive cells in Korea for assembly at GF3, if that's allowable under China's import regime. Tesla owns the IP, and could easily have a 3rd party make the cells.

Panasonic has been a good and reliable partner so far, so I'd guess they are the top candidates - unless they are being unreasonable about the GF3 investment (which I don't think they are).

It's still a negotiation process.

 

[Tslynk67]

Only impact is SP going up based on EMs purchase ... Shorts/MM could make EM suffer, by ensuring SP moves up super rapidly (prior to his purchase)

That would be funny - cause a self-inflicted short-squeeze in order to annoy Elon!

 

[SpaceCash]

EM's purchase will not affect share price. He is buying newly issued shares directly.

 

[Fact Checking]

Direct issue from Tesla (new shares) using predetermined pricing (close on date y or some such) no impact on market (beyond minor dilution)

Btw., won't this kill the short thesis that claims that Tesla is under a "Wells notice" that makes them unable to raise cash? A small ~70,000 shares demonstration that this is not so.

The real reason Tesla is not raising cash through equity financing is because they are cash flow positive and are paying back debt from internally generated cash.

 

[humbaba]

and the selling pressure is on!

 

[elasalle]

To workaround tariffs for S/X, a model that is similar to Tillsburg (Europe) , could be set up ...
Right now it is S/X sales that are suffering from the 55% tariffs

Edit(Add)..For Model 3, might as well start simplified production line (the one under tent) .. that took 2-3 months to setup. For this as well, until stamping press etc are all in place, send the parts over from Fremont & Sparks

(production line with Kuka robots might we easier to set up ) .. than the rest of the parts ... ~ cheers

Thinking out loud ... just based on intent of setting up factory and starting construction, could the China Govt remove some of the tariffs for S/X as part of the process etc etc (say something like a EV tax credit..)?

 

[Artful Dodger]

That would be funny - cause a self-inflicted short-squeeze in order to annoy Elon!

What weighs more? $20M worth of feathers, or $20M worth of hammers?

 

[Krugerrand]

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.

Ok, so we can expect negativity and shorts to continue with fervor after earnings call since there’s no chance of them going into any such depth of explanation and plan forward. Probably because nobody will ask those questions.

I’m betting focus of call is on his stepping down as chair, who replacement will be, what is current demand/reservation number, timeline for SR 3/European deliveries to start, GF China and everything else but what you just posted.

BTW, another 65,000+/- shares now off the table and in Elon’s pocket. That’s I believe his third buy in the last year. Yep, nothing to see here.

Edit: sorry new shares for Elon but still off the table.

 

[SpaceCash]

BTW, another 65,000+/- shares now off the table and in Elon’s pocket. That’s I believe his third buy in the last year. Yep, nothing to see here.

No. These are newly minted shares sold directly to Elon. No shares are being taken off the table.

 

[tivoboy]

I wouldn't make much of anything of the 20$ million in stock purchased by Musk. It's pretty clearly that the company wants him to pay both halves of the SEC settlement and they don't want it to impact their cash on hand at all (which actually COULD be a little scary)

For Musk $20M is pretty small change (although, he's apparently not very liquid so it's something)
Be more excited by the over 35M in stock that he has purchased over the past several months WITHOUT making newsy announcements
I'm actually just a TAD concerned that they wanted to make this a newsy announcement, sort of trying to inform investors about interest/intent but at the same time it seems like the opposite could be more the case.
they really need to get the share price up in order to meet some debt covenants for possible conversion, but I don't see that likely at all - that they will hit those targets.

 

[brian45011]

When is Tesla offering their own insurance, they Are much safer cars. I gues this would scale along with their body shops?

Insurance is heavily regulated state by state, and significant financial reserves are required. It would be a foolish diversion from Tesla's main lines of business.

 

[Ulmo]

Now that short term longs have taken profit, it looks like shorts want to push down ........ wait, that's macros. Macros are down much more than TSLA; TSLA performing well.

 

[JRP3]

Direct issue from Tesla (new shares) using predetermined pricing (close on date y or some such) no impact on market (beyond minor dilution)

It's basically a big FU to the SEC for fining Tesla instead of just fining Elon. I love it.