TSLA Market Action: 2018 Investor Roundtable

[Buddyroe]

You know, the short game is like a time-share sales pitch - no matter what the situation, they have answer for it.

What the shorts have been saying:

"Tesla can't build their promised $35k car and make a profit on it."
"Tesla took deposits for a $35k car and now aren't offering it. It's a bait and switch scam."
"Teslas are a rich man's toy."

And when Tesla moves toward offering a $35k car by introducing a medium range car:

"Tesla Introduces Lower Priced Model 3 Due to Falling Demand"
"Demand for Tesla High End Model has Dried Up"
"Musk Introduces $35k Car (but not really)"

 

[ThereAre4Cars]

Tesla is probably trading at 260 rather than 300-330 because of macro, but it's trading at both these levels also because Tesla has earned a great deal of skepticism about the following things:

1) How high model 3 production can actually get
2) How cheap they can build them

This is an uberbullish forum so leaps of faith are taken for granted but breaking NUMMI records and getting 25% gross margin on a product mix in the mid-40k$ range lack significantly compelling evidence.

 

[davecolene0606]

Green ya bastages

Kind Sir, at the risk of offending you by correcting your use of phraseology....

It’s: fargin bastages

Thenk u

Fire Away!

 

[tivoboy]

I went back and clocked "Disagree" as requested, but I don't "disagree" as such, you're just plain wrong.

I'll still help me though, I've managed to monetize it nicely. Thanks!

 

[ThereAre4Cars]

I'll still help me though, I've managed to monetize it nicely. Thanks!

I didn't. I always get a kick out of the momo voters. Like... I think the dude got the idea. On reddit your downvotes seem to accelerate after your comment collapses.

 

[JRP3]

come on people there has to be at least a few more people on the forum who haven't disagreed? Come on, I'm going for the RECORD!

pls head back to this link and click DISAGREE.

TSLA Market Action: 2018 Investor Roundtable

Don't know why you're flipping out, you posted something which was inaccurate.

 

[bdy0627]

Tesla is probably trading at 260 rather than 300-330 because of macro, but it's trading at both these levels also because Tesla has earned a great deal of skepticism about the following things:

1) How high model 3 production can actually get
2) How cheap they can build them

This is an uberbullish forum so leaps of faith are taken for granted but breaking NUMMI records and getting 25% gross margin on a product mix in the mid-40k$ range lack significantly compelling evidence.

Don't forget concerns over Tesla's current liquidity. I think that and executive level uncertainty are weighing very heavily, obviously hugely influenced by the overall stock market uncertainty. Both of those first 2 issues should have positive upcoming catalysts with the Q3 ER, and especially Q4, and the appointment of a new board chairman.

 

[humbaba]

If more shares are around then by definition there have been more trades.
If Long Corp starts with 10 shares. Then someone borrows 10 to sell short, then 20 trades have been executed in total, and 20 long positions created, rather than the original 10 trades+long positions.

More virtual shares = more actual trades/transactions. Unless I'm wrong

When you say "if more shares are around then by definition there have been more trades" you are wrong. The only time a transaction increases the number of shares is with short selling. If I sold you my shares (not that I would ) no shares have been created.

The stock issuer is the only one who can create shares. Part of the debate about short selling and "real" vs "virtual" shares revolves around this distinction. Short selling increases the number of shares in circulation (inherently depressing stock price), but it is not diluting the shares (because the number issued by the company has not changed).

If peter sells 100 shares to paul who sells 100 shares to mary -- there are only 100 shares involved, but 300 transactions. If that was the only action that day, there would have been a volume of 300 (fun movie!). If peter was short selling simon's 100 shares then there are +100 shares in circulation, but that is separate from the number of transactions (other than short selling necessarily involves a transaction).

[edit: I may have inadvertently flipped the point above so to be clear it goes both ways -- a corporation could have 1000 shares and 0 transactions in a given day. While it might not be likely, there is no requirement that shares be transacted in any given day. Shares != transactions.]

 

[dqd88]

It's hard to stay leveraged in TSLA right now with the Nasdaq so iffy. There seems to be a lot of market downside risk remaining with not a lot of upside support. Problem is, I rode this latest dip down with a lot of leverage and I do not want to risk being out when it climbs. However, if the market drops a lot further, TSLA will almost certainly not hold around the $250 support level. Decisions, decisions...

Is anyone very confident that the market isn't going down further? I mean, I don't really care too much about a few more percent, but if it was to drop another 5% or more then I would really love to be on the sideline. I think a lot of longs are on the sidelines because of this risk.

My "guess" is that the overall market will trade in this range for a couple more weeks. After mid-term elections things will slowly start to recover.

 

[humbaba]

For trailing NASDAQ by ~1% for most of the day its kinda nice that it closed with a barely larger gain. So some buying pressure above the macros. I suppose not really surprising as only a fool would sell $TSLA short at this level.

 

[SpaceCash]

My "guess" is that the overall market will trade in this range for a couple more weeks. After mid-term elections things will slowly start to recover.

I'm buying more calls next Monday. Food be damned

 

[ThereAre4Cars]

Don't forget concerns over Tesla's current liquidity. I think that and executive level uncertainty are weighing very heavily, obviously hugely influenced by the overall stock market uncertainty. Both of those first 2 issues should have positive upcoming catalysts with the Q3 ER, and especially Q4, and the appointment of a new board chairman.

I think the liquidity theory as an explanation for the stock doldrums might be a bit overstated because the fundamental business case supports the equity value and the equity value supports the debt burden, but we will get to test that perhaps with this quarter. My prediction is that if cash flow is really positive but gross margin guidance is held at 20% then the stock will not respond well. If the gross margin guidance is over 20% I think that unless there is any other highly surprising factor the stock will go up. I'm also very curious about what compelling angle they can give in regard to organic demand generation.

I do think we'll get a bit of a pop if the chairman is a reasonable choice (frankly I like Mulally) but I'd wager that's a 3% kind of news event.

 

[avoigt]

I suspect Tesla wants not just a good location and regional support, but also significant local financing support - which they got in Shanghai.

What's unclear to me is whether that's even possible on the German state level or requires federal support - and that looks highly unlikely to me given how heavily German politics is captured by the German automotive industry.

Perhaps Lower Saxony could sell part of their large stake in VW and invest in a Gigafactory, for diversification. Just saying!

It can be decided on a German state level. The political structure in German allows a lot of decision power in the states instead of the federal level. But even those are partly strongly lobbied by the Auto industry. For instance Lower Saxony where the local PM sits on the Board of VW. Ties between VW and politicians are strong there. So Tesla should definitely not settle in Lower Saxony.

Still the Auto industry has right now a really weak position and other state politicians will do their best to bring Tesla in (exceptions, Lower Saxony, Bavaria and Baden Württemberg). There are a lot of good arguments in favor of Tesla to build a factory in Germany but I also see good arguments that speak against it.

I would strongly applaud it though.

 

[ggr]

Don't want any capital raises though, not unless absolutely necessary.

Agree, you don't want to raise capital while the stock price is depressed, it sends exactly the wrong message and is unnecessary anyway.

 

[SpaceCash]

Agree, you don't want to raise capital while the stock price is depressed, it sends exactly the wrong message and is unnecessary anyway.

Ding ding ding.

I view anyone calling for capital raises at this time as highly suspect, or at the least severely misguided

 

[dqd88]

Agreed with the board members and chair, I think market is waiting for this.

Don't want any capital raises though, not unless absolutely necessary.

I'm ambivalent on the capital raise (pref debt). I'm just saying... if we're sitting around asking what would cause investors to dive back in and what would bring in new investors... capital raise is one thing (eliminates fear)... because it would eliminate the argument that Tesla won't be able to make due on debt payments. This is a negative... even if it's a falsity, it's being used by shorts/media and harms the SP.

The way my mind works - I would layout all the negatives and then ask how to negate those. If Tesla operates in the public markerts and cares about SP then they have to play politics to some degree. This is why I would prefer Tesla as a private co.

 

[tivoboy]

I didn't. I always get a kick out of the momo voters. Like... I think the dude got the idea. On reddit your downvotes seem to accelerate after your comment collapses.

thanks anyway, I got to the 30 I needed.. ;-)

 

[ThereAre4Cars]

Agree, you don't want to raise capital while the stock price is depressed, it sends exactly the wrong message and is unnecessary anyway.

"Stock price is depressed" is an opinion though. It's not a fact. A decline in macro conditions and this stock goes down further, car sales tank across the board and investors wring their hands about the whole sector in a "sell first, think second" manner. A billion dollars would do a lot for derisking and is a pretty small dilution. The news flow is substantially more negative than otherwise I believe because of the low cash balance. There's always a risk that the media negativity infects the customer demand in a reflexive manner. I consider Tesla a potential 20x return stock and I'm 100% willing to accept a 3% dilution to derisk the downside personally. If everything turns out hunky dory than Tesla's cash demands will increase faster than actual operational cash because at that point they will think more aggressively about cap.ex.

 

[dqd88]

When you say "if more shares are around then by definition there have been more trades" you are wrong. The only time a transaction increases the number of shares is with short selling. If I sold you my shares (not that I would ) no shares have been created.

I don't see how I was wrong. If a physical share is loaned to a short and then sold, then virtually there are now more total (physical+virtual) shares ie "more shares around". The only way to get to that point is through trading. There can't be a new long buyer who bought the short sellers trade without a trade. Hence more total shares (physical+virtual) requires more trades. But I could be wrong

 

[Zaxxon]

Folks, how come no one mentioned that GF3 already has a tent!?? We should see 1k/week vehicles by Wednesday probably, Friday definitely!