TSLA Market Action: 2018 Investor Roundtable

[dgodfrey]

People are often surprised at what they thought they heard when faced with evidence otherwise.

I'd suggest that a recording or transcript made from one would be a more authoritative source than memory some time after the fact.

Not saying he didn't say that... but time and again here when people claim "Elon said..." or "Elon promised...", it turms out that actually he "thought", or "felt", or was "confident" of something instead...

I see this all the time too on competing EV forums. The dumpster fire of misinformation is overwhelming. It's like cleaning my garage, where do I start?
They're convinced Elon promised the $35k base model by EOY 17. He promised 5k/month by 2nd Q. He promised a cross country FSD in 2016.
You can beat your head against the wall and link sources but their mind's made up, don't confuse them with the facts.

 

[neroden]

Given that foreign purchases of land are illegal in China, well, duh.

Actually, it's practically impossible to buy land in China *at all*. Rural workers' cooperatives can own land, some rural farmers can own land outright if I remember correctly, but I believe *all* urban land is leased from the government since 1982 when the last private owners were nationalized.

 

[Singuy]

OK, so it's bugging me enough to pull the trigger and post about it, knowing very well there are strong emotions related to this topic- but anyway, here it goes.

Am I the only one who feels there is some hysteria, or double standard related to the Saudi situation (as it pertains to Tesla)?

Now in no way am I suggesting, that an assassination of a journalist is acceptable! However, I wonder how all those people who have huge issues over the Saudis owning some shares in Tesla or just doing business with them feel about China. A dictatorship is a dictatorship. Just because China has learned the lessons from the Soviets and realized that on an economics level communism is unsustainable, they are not much better with regards to freedoms, or democracy than any other dictatorships.

China is a communist dictatorship where people disappear if the government doesn't like them - like the recent case with the actress and all the others you don't hear about because they are not famous, who BTW might disappear for good. They also restrict civil liberties, monitor and censor the internet and of course there is widespread corruption keeping people loyal and the system alive.

Yet, everyone applauds the Shanghai factory, no one was concerned about Tencent's involvement and if Tesla announced delivering a huge battery farm we would all comment on how good this will be for Chinese air quality.

What I am trying to say is, you either operate on base of principals and do not do any business with those whom you deem morally unacceptable - but then that goes for the iPhone in your pocket too. Or, you are pragmatic and say, OK my company will not actively support these regimes or allow majority control, etc, but serving the billions living there with clean energy products is net beneficial to the entire planet.

So if Tesla were to announce a massive battery deal or setting up a PV factory to supply a huge solar power plant, should we really be upset?

Okay let's not go around spreading news with incomplete stories. That Chinese actress envaded taxes. Now she's back making public apologies and will continue with her acting career. Plenty of people tries the disappearing act after envading taxes.

Www.nst.com.my/node/423070/amp

 

[neroden]

The ICE resale value crash has already been discussed in this thread, but I haven't heard much discussion on the disappearance of gas stations. There's already huge numbers of gas stations closing while EV charging stations are being built all over the place. Every gas station that closes chips away at the biggest advantage ICE cars have: lots of places to refuel. I think we are looking at a gas station death spiral in the next few years which will make the shift to EVs happen even faster. Gas stations will disappear sooner than you think

Yeah, I talked about that... two years ago? Over in the "shorting oil, hedging Tesla" thread.

 

[neroden]

That's some A+ sleuthing! Very interesting.

I hope there is a big deal. But I hope it's kept hush hush until the Khashoggi thing mellows out.

I don't think we or anyone should back out of any deal w/ the Saudi's over the murder. I have a contrarian view - they should have to hire/pay more towards good projects - for stuff like solar that's good for the world - it's a way they can repent.

I'm fine with deals to sell them good projects like solar power. But we should probably stop selling *weapons* to the Saudi monarchy/theocracy.

 

[neroden]

adadf

Elon went there for a conference years ago. You can find it on youtube. He does look quite out of place - he's up there talking about alternative energy to a room fool of Saudi oil lords. I think it's fairly safe for western business people.

Probably, but that was before the bizarre incident with the apparently-coerced/kidnapped prime minister of Lebanon, and the kidnapping of all the Saudi billionaires in the hotel... it's all looking very unstable for VIPs to me.

 

[neroden]

We know Neroden is one person and they go on information blitzes that are equal to FC, and probably with a deeper level of insight.

*Blush*

 

[Smokey4141]

170,000,000 Total Shares
-40,000,000 Held By Musk
-90,000,000 Held by institutions and early retail longs with strong hands (T. Rowe Price alone holds 17,000,000 shares, doubt they are selling at these levels)
=40,000,000 shares that weak longs and institutions trade with

So yes, shorts can control the price

*Forgot to add the Saudi's own 8,000,000 shares, and probably accumulated more at these depressed prices. I feel like this stock is a coiled spring and will jump just like AMD did from $9 to $34

But "longs" have no bearing on the price as well....??
Organizations that hold MILLIONS of shares don't have some control of the price?
Allll righty then.....

And seriously....if shorts can "control the price".......how could they possibly lose money?
WHY would they let themselves lose money?
Do they just decree, "I'm going to make money on my shorts", and Mr. Market just says, "Oh, okay", and just gives me money??

It doesn't really work like that..... I wish it did......but it doesn't....

 

[hacer]

Certainly some of Tesla's enemies have done so already, and are using their equity in an attempt to damage Tesla. At least one of them dumped over a million shares of TSLA in the first minute of the 'Bloomberg Bare Raid' on Sep 18. This is a group that can afford to throw away 30 million dollars in a minute to make a point. It's also a warning to others. All done before the SEC lawsuit was filed. Jus' sayin

View attachment 345798

Only part of this is dumping of equity. A fair amount is likely naked short selling: you can see a large spike in "failures to deliver" on the date that these trades would settle. https://www.sec.gov/files/data/fails-deliver-data/cnsfails201809b.zip.

Of course naked short selling is illegal, but the SEC never does anything about it. The failure to deliver persisted for several more days - suggesting that they "covered" their naked short sales over a period of days.

 

[winfield100]

Stupid and probably unrealistic thought I’ve been entertaining for a while now: can’t a person, company, fund or institution with very deep pockets gobble up all those 40 million free shares (and any more that come available)?
Slowly over a period of several months, so as not to push up SP too much. And preferably timed so that it takes the longest time before the stake has to be announced.

well, if you follow the A/D line, Accumulation/Distribution. where it tracks buy sell so if prices are a tiny bit higher vs a tiny bit lower....

and since the spiegel bottom, the linear regressions kinda look "upwards" for A/D line, SO it may be that some "someones" re quietly already doing so,

 

[Smokey4141]

No there are 170 milion shares. There are 30 milion shares or so loaned out by longs to sell short. These were bought up. That did not create any new shares. If tesla were to hold a share holder vote. Only 170 million votes could be cast.

Even short sellers who failed to cover didn't create any new real shares. They created fake shares that have no rights associated with them.

Well..... Hmmmm... Then who bought the 30 million shares the shorts sold??
The 170 million longs already own "their" shares, so.....~somebody~ must have bought the shares sold short...

?????

 

[neroden]

OK, so it's bugging me enough to pull the trigger and post about it, knowing very well there are strong emotions related to this topic- but anyway, here it goes.

Am I the only one who feels there is some hysteria, or double standard related to the Saudi situation (as it pertains to Tesla)?

Now in no way am I suggesting, that an assassination of a journalist is acceptable! However, I wonder how all those people who have huge issues over the Saudis owning some shares in Tesla or just doing business with them feel about China. A dictatorship is a dictatorship.

(Emphasis mine.)

Well... I actually disagree? There are a lot of gradations between
-- full, totally functional democracy with very strong rule of law, like Switzerland
-- absolute, practically lawless dictatorship like Saudi Arabia

China is one of many, many countries which is somewhere in between.

Frankly, so is the US.

There are various "democracy rankings". The Economist did one in 2010; Saudi Arabia was at rank 160, 7th from the *bottom*, keeping company with Equitorial Guinea, the Central African Republic, Myanmar (which is committing multiple genocides), Uzbekistan, Turkmenistan, Chad, and North Korea. China was up at rank 136, near Azerbaijan, Egypt, and Vietnam because it has a political culture and political participation.

The important point for this purpose is that China has an extremely strong, and very old, legal tradition. Despite one-party rule, people can get absolutely furious, and fight in court a lot, if property is taken without proper procedure and compensation, or if laws on the books are not enforced (as was happening with the environmental laws until recently). A lot of the fight for human rights in China is done by lawyers fighting to enforce laws already on the books. And judges *do* rule against the Chinese government.

Saudi Arabia officially doesn't *have* laws on the books. They claim that the Koran is the Constitution and use Sharia for most rulings, supplemented by royal decree. This wouldn't be so bad if they used any of the traditional Islamic systems of jurisprudence (which ended up being quite a lot like English common law in many ways). But they don't. Because the extremist Wahhabis have controlled the legal system in Saudi Arabia since day one, they have ended up with a system where the judges are not bound by precedent or text or legal tradition, and simply act as agents of either the Wahhabis or the king.

Given this, which country is safer to make a business deal with?

So if Tesla were to announce a massive battery deal or setting up a PV factory to supply a huge solar power plant, should we really be upset?

A battery deal would be OK. Saudi history treatment of workers is worse than China (workers actually do have substantial rights in China -- and generally no rights at *all* in Saudi Arabia), so I'd be uncomfortable with a factory.

 

[neroden]

I think I know who Fact Checking is. While he is not Elon, he is brilliant in his own way. And No, I will not reveal my guess here or via PM.

We know from his "Location" that Fact Checking is in Vienna -- and he doesn't seem like the sort to deliberately falsify location! I can't think of any people in Vienna who he might be, therefore I assume he's someone I've never heard of.

 

[Smokey4141]

Stupid and probably unrealistic thought I’ve been entertaining for a while now: can’t a person, company, fund or institution with very deep pockets gobble up all those 40 million free shares (and any more that come available)?

Slowly over a period of several months, so as not to push up SP too much. And preferably timed so that it takes the longest time before the stake has to be announced.

At current SP it would cost 10 billion, but if SP slowly goes up maybe 15 billion. A lot of money, but not out of reach for some parties in this world. More money would have been involved in the going private venture.

At the end of the buying liquidity would dry up and the short squeeze would happen for sure. And fhe ownership situation would be comparable to what it would be under a private Tesla.

Fire away! (paraphrasing another poster)

No firing away from me! LOL
But yes! Exactly! ~IF~ somebody wanted to do that, they absolutely could....

You could even say, "The longs can control the price"..... ;-)

And quite frankly, the current handful of large (Elon / fund families) shareholder blocks ARE controlling the price...
Not the shorts... Not the retail longs... (in other words, you and I..) What "we" do makes no difference to the SP...

The few large shareholders support and activity is what's keeping the price here....

And when they start selling, you'll know it...

 

[Mobius484]

I don't remember Elon visiting KSA before. I do recall him presenting at the World Government Summit in Dubai in 2017. Does anyone have a link with him at a Saudi conference?

Thanks, your right, it was the Dubai conference.

 

[NikeWings]

Elon also said in the same conference call Tesla may not be cash flow positive if they pay off big loans, but you might have stopped reading soon after you found your bit.

Geezus, if Elon and Deepak can't be accurate when speaking about Q3, while 1/3 into it, (the OP's question), then we have bigger problems than packs, paint, logistics and shorts. Yes Elon made a disclaimer in opening remarks about a force majeure and occasional big paydown, but his Q&A with Deepak was quite specific on the near quarters being cash flow positive and GAAP profitable. Yes, a Q1/19 debt paydown likely qualifies for the disclaimer you reference, but it would be very problematic if triggered before that. Depak's creditbility would be out and while Elon can walk back his financial missteps, Deepak can not. Institutional tolerance stops.

Gotta love Elon ramblings......we find answers to suit all of our needs.

 

[CorneliusXX]

Helpful. But it's a long way from 7000/week to 12000/week (10000 Model 3 + 2000 Models S & X).

Do you know why NUMMI used to be able to paint 500k vehicles per year under GM/Toyota while tesla struggle to cover the current volume?

 

[Fact Checking]

Do you know why NUMMI used to be able to paint 500k vehicles per year under GM/Toyota while tesla struggle to cover the current volume?

Apples to oranges:

• NUMMI was a fine plant, but at their peak they mass assembled cheap cars: the highest unit count were Toyota Corollas that had an ASP of $15-$20k.
• They also made Hummers, but with a much lower unit count.
• Much of the ICE powertrain was made elsewhere: engine, transmission, differentials, axles, etc.
• Seat production was outsourced as well.

So the value-add of the NUMMI factory was probably less than $10k per unit.

Under Tesla they are making $40k-140k premium vehicles there. Seats and a whole lot of other components are vertically integrated.

In terms of paint shop, apples to oranges again: Tesla uses robotic arm powder coating with several complex layers of paint:

Paint on Corollas had perhaps two layers, made with much cheaper technologies and the result was not nearly as premium - so painting took less time.

Tesla also does significant R&D at Fremont AFAIK - while neither Toyota nor GM did that.

So the value created at Tesla's factory is already probably 10 times that of the peak value-add of the NUMMI plant.

Comparing the NUMMI plant to Tesla's factory on a unit count basis is perhaps one of the most dishonest arguments of Tesla shorts and bears.

 

[Smokey4141]

Do you know why NUMMI used to be able to paint 500k vehicles per year under GM/Toyota while tesla struggle to cover the current volume?

There could be many reasons, but both EPA and California paint emission / air quality restrictions over the last many, many years, has just gotten more and more restrictive...
California has just become a more difficult place to build cars, versus 2-3 decades ago...

 

[EVNow]

A battery deal would be OK. Saudi history treatment of workers is worse than China (workers actually do have substantial rights in China -- and generally no rights at *all* in Saudi Arabia), so I'd be uncomfortable with a factory.

This is definitely true. Treatment of workers in China is probably not that different from countries like Bangladesh.

In KSA, the rights they suppress most is religious (if you are not a Sunny Muslim). Most of the projects are actually undertaken by large European or US constructions firms and in turn, they handle workers the same way they do in all developing world. But someone who is in the direct employment of a rich local probably has zero rights - and is in a worse condition than an undocumented worker in the US.

So, I wouldn't be too concerned about a factory in KSA compared to a factory in - say - Nigeria.