TSLA Market Action: 2018 Investor Roundtable

[Nocturnal]

Chanos is complaining that Tesla is only selling the $60k version of the Model 3. ' "I would remind you that that's the car that was supposed to be sold for $35,000." Chanos said.'

And, let me guess... this is... bad?

Those complaints are ridiculous. Can you imagine somebody saying that about Apple?

"I mean, sure, they are selling as many of their 1k new Iphones as they can make, but they promised a cheaper version and they won't sell it yet!"

Somebody needs to remind him that every fund/manager/investor winds up reverting to the mean given a long enough time horizon.

 

[bdy0627]

@HFTAlert
A very large sell program targeting 450 issues hit at 11:51. CAPPER sized which typically mark the end of an intraday range. $SPY

 

[Fact Checking]

In scenario #1 Elon is clearly indirectly reimbursing Tesla. In scenario #2 he is not.

You are applying your own common-sense understanding of what 'reimbursement' means, while in contract law it has specific meaning:

What is REIMBURSE? definition of REIMBURSE (Black's Law Dictionary)

"The primary meaning of this word is “to pay back.” Philadelphia Trust, etc., Co. v. Audenreid, 83 Pa. 264. It means to make return or restoration of an equivalent for something paid, expended, or lost; to indemnify, or make whole."​

(emphasis added.)

So:

• Firstly, there's no 'pay back' element here: sale of equity is a value for value transaction at market prices. It would be an entirely legitimate business transaction without any SEC context.
  
• Secondly, Tesla's bottom line is still harmed by the SEC fine: Q4 profits are still lower by -$20m, so this is neither reimbursement nor indemnification.
• Fourth, the SEC wrote the settlement contract, so in case of any doubt or ambiguity the default interpretation of the contract goes against them.
• Fifth, Elon and Tesla announced this $20m equity sale shortly after the settlement - if the SEC disapproved of it they could have and should have mentioned it in their letter to the judge. They chose not to, but wrote a long letter detailing why they think the settlement is in the public interest - in full knowledge of Tesla's and Elon's $20m equity sale plans.
• Finally, it's 99.9999999% certain that Tesla's and Elon's lawyers signed off on it, and it's 100% certain that SEC lawyers either knew or should have known that equity deals of any value are still possible according to the terms of the settlement.

For your interpretation to hold all these five arguments would have to be defeated.

The $20m sum and the timing is also symbolic, of course, but nothing in the settlement forbids Tesla or Elon from doing it.

 

[KarenRei]

Another possible lemur:

Lemur Holdings – Bushveld Minerals

They're an energy company, although invested in coal. They're hoping to electrify the southwest of the country. Some searching shows that Madagascar has been seeking solar tenders, but it shouldn't be connected to Lemur's work, as far as I can tell....

Would be pretty cool if the Imaloto project was being converted from pure coal to a coal+solar mix.Another possibility would be using powerpacks to eat the demand peaks and increase the capacity factor (and to some extent efficiency) of the coal plant. Doubt that's what's going on, of course, but just bringing this up...

 

[MarcusMaximus]

The way I look at it things happened likely one of two ways:

1. Elon said I don't want Tesla financials to suffer as a result of this fine, so to make Tesla whole I want to buy $20 million of newly issued stock.
2. Tesla said we don't want this fine to impact our financials so we are going to sell $20 million of new stock. Elon then stepped up and said that he would buy the stock.

In scenario #1 Elon is clearly indirectly reimbursing Tesla. In scenario #2 he is not.

All I'm saying is that once the sale of stock goes through don't be surprised if the SEC asks for records to try to determine how the stock sale idea was decided upon.

Or, option 3:
Elon saw that the stock price was very low relative to value and wanted to buy some stock. He asked and Tesla graciously accepted. The $20 million figure came from either 1. He’s heard that number a lot recently and it seems like a good amount or 2. He figures the stock is due to double and wanted to make his money back.

Barring something REALLY dumb on Elon’s part, good luck proving it isn’t #3.

 

[SOULPEDL]

I liquidated my entire portfolio and bought $100k of Tesla after the tweet. And as it went down to the lower $300s I put in another $100k... and then he canceled the go private. I’m just holding and hoping at this point

I'm in deep with my IRA as well. But as I've said, I still own the same amount of Tesla as last month... Only the fool sells on the dip which is why I own even more since the tweet, and actually thinking I'll maybe grab some more candy just to be sure. Even if the Lemur is a non-event, and earnings are less than people expect, it won't be that long now. I've got some quick sells locked in up higher but always keeping about 75% really long. I'm betting on the planet, better I (we) win before it's too late.

 

[brian45011]

Again, you are missing the essence of my post, which is that many more than just short-term speculators have been hurt by the stock's long-term performance. Four years is a very, very long time for retail investors. Failing to acknowledge this is denying important facts... for what purpose?

It's important that we acknowledge why investors are frustrated: 8 out of 10 have not seen *any* return on their capital: ValueAnalyst on Twitter

Cue Ben Graham.

 

[WentOffGrid]

Shorts must have used up quite a bit of their firepower on the earlier morning dip.

Yup! And my "Lucky Thirteen" hit very near that dip

Not much powder left, but grab whatever I can

 

[ThereAre4Cars]

Elon has a large pool of fans and a large pool of haters. He's a celebrity. The haters seem to think he's a liar and a huckster and a fake engineer. So be it. The media likes celebrity and controversy. Bezos or Reed hastings are alternate models. They don't make wild speculations and court attention. They just kick ass quietly like thieves.

All of that creates a kind of superficial layer of volatility on the stock. The main reason the SP has done poorly is because Tesla executed the model 3 ramp horribly. The dreadnaught concept was mostly a failure. And the sales/service/delivery quality has message threads all over with disgruntled individuals. Meanwhile the op ex of the business climbed to such a level that it takes 5k per week of skimming off 60k$+ car orders from a backlog to break even. And somehow without sufficient explanation even at that price point the gross margin is only 15%. In this context of poor execution very significant team members have left, Elon called someone a pedo and launched a bizarre take private scheme in an impulsive manner.

There's plenty to chew on. For me, most of this is a function of incredible ambition put there by Elon who could have navigated a much slower growth path more pleasantly. So kind of take your pick. Tesla is now selling nearly the revenue of Mazda and is en route to far more. They have taken the highest difficulty dive and botched the entry. My position is we just passed over the dark night of the soul and yet the market hasn't figured it out yet. There is probably a high chance that Tesla could have failed and died the last 9 months and some of that impression lingers.

 

[Joe F]

On a more positive note, Ford announced they'll now produce 1350 GT supercars, to be delivered 2020 - 2022 timeframe, an increase from their initial production number of 1000.

Or about a half days Model 3 production. Kind of explains Ford's stock price.

I did read though that over 6500 people "raced" to sign up for the initial 1000.

 

[ThereAre4Cars]

Also the macro environment for growth stocks is horrible. What is going on with Netflix the last two days are war crimes. They are performing ridiculously well even for them.

 

[SOULPEDL]

Come on already while I still have some color in my hair...

 

[mongo]

It would be nice if the news is King Julian style:

 

[AlexS]

Come on, Elon... it's 8:40 in California, 11:40 in NYC, and yet here I sit, still bereft of lemur....

I think Saudis tweeted today that lemur is postponed, until the clarity with journalist, so probably for a long time

 

[bdy0627]

Honestly, given the macro environment, I think $TSLA is holding up quite well. I would point to $NFLX as an example - absolutely bossed their earnings and look at it now...

Hopefully the market reaction to NFLX' earnings isn't an indication of what we can expect with TSLA, but if the market stays negative, it very well could.

 

[Right_Said_Fred]

I think we have started the second leg down of the overall market correction, and don’t know if Tesla will be able to withstand the drag. Will start buying more if we reach the fifties or forties to lower my average price.

 

[bdy0627]

Chanos is complaining that Tesla is only selling the $60k version of the Model 3. ' "I would remind you that that's the car that was supposed to be sold for $35,000." Chanos said.'

And, let me guess... this is... bad?

Yes, he's right. No wonder he is complaining about it. It is very bad...for shorts. Much better gross margins are not what the shorts are looking for.

 

[njzimmic]

lemur bros? like Lehmans bothers maybe IDK

 

[CaliBear1]

Some people play drinking games....

My version of "Hi Bob?" Every time Nabob Chanos pops off, I have to scrape up more dry powder and add to my TSLA holdings. My shares are now in four figures.

And God help me if I include idiotic Bob Lutz quotes in this game. I'll have to get another job! Maybe I'll Uber with a P3D+

 

[ggies07]

Isn't it weird how the only people who WE ever hear angrily shouting "WHERE'S THE $35K MODEL 3, TESLA???" are shorts?

Nope. Right ****ing here. Maybe you missed all my posts Been a shareholder since 2012 and I'm in it for the long term.

The only reason Tesla is doing so well with the high end version is because that is all they are selling. I don't need the premium interior or the long range battery, what I need is to get off of fossil fuels and the base model for which they promoted does that.