TSLA Market Action: 2018 Investor Roundtable

[Tenable]

Maybe I don't understand how it works, but... doesn't EM as a CEO have a responsability only towards
shareholders, meaning investors? He shouldn't care of traders (daily, weekly) and above all shorters.

I mean, if you can take advantage of the volatility, good for you; if you can't, bad for you.
EM has the obligation to make Tesla succesfull as a company, this is much all of it.
As the tiniest of Tesla shareholders, I'm participating in the highs and lows of this company, and what I want for them is to succeed. Can we say the same for traders and people with options?
If I'm not mistaken, we cannot.

Beside long term investors/shareholders, options market is derivative gambling industry,
good luck everybody.

You're mistaken.

 

[aubreymcfato]

You're mistaken.

Could you elaborate on this, please?
It's quite probable I am, but I'd like to know how.

 

[Tenable]

Could you elaborate on this, please?
It's quite probable I am, but I'd like to know how.

Many of the people here have are long term shareholders and choose to use options to increase exposure or provide themselves with protection. At all times in doing so they are paying for contracts that control shares. Also, a fair number of our members choose to use options are their long term investment tool of choice. I for one am a long term bull, but I choose to use LEAPS (very long term contracts) instead of shares. It gives me maximum exposure to the upside that I believe TSLA will provide. Being someone that trades or chooses options over shares does not make us less invested, or less exposed to the highs and lows. On the contrary, one might argue quite the opposite. Those in options feel the successes and failures of the company far more acutely.

I'm off, I hope this provided some insight into my thoughts. Have a good morning.

 

[Matias]

FYI. I don't have the competence to evaluate, whether this article is accurate or not.

HEDGE FUNDER JOHN THOMPSON: Tesla is 'on the verge of bankruptcy'

 

[avoigt]

Moody's: $TSLA "Tesla's liquidity position is not adequate to cover 2018 operating cash burn that will approximate $2 billion; debt maturities of $1.2 billion through early 2019. Cash needs will require a near-term capital raise exceeding $2 billion."

so theres that. But what does moodys know

We all know from the outcome of the financial crisis that rating organizations do not know a lot. We also have to factor in that they are paid for their services so there is even a financial influence that may trigger certain assessments.

They very likely took the Bloomberg tracker and calculated based on a 1k/w production rate, factoring all possible worst case scenarios in they could imagine. People for some reasons believe this companies are independent but they are not. They are paid from institutions/companies/countries who have interest. Taking their word as truth is risky.

 

[X Yes?]

FYI. I don't have the competence to evaluate, whether this article is accurate or not.

HEDGE FUNDER JOHN THOMPSON: Tesla is 'on the verge of bankruptcy'

Worth a read, whether long or short. SEC interest is illuminating:


"No matter how good a social investment makes you feel as it is going up, extreme anger will result if most or all of your money is permanently lost, especially when it is due to false and misleading statements by senior company officers.

This is when the [Department of Justice] steps in and escorts untruthful managements to their new living quarters."

 

[Tslynk67]

I was lucky as I had €60k cash in my pocket, February 2016, which just hapenned to coincide with the dip. Persuaded the wife to let me buy 100 when the SP was $144, then a few days later got "permission" to invest the rest around €166.

Prior to that I had 8 shares that I'd bought for SP of $280. So I wouldn't really say I was riding that dip down...

On a selfish level, I'm pleased with this dip as I've just received my tax refund and can add a bit to my modest pot. I'm definately long on TSLA, with a 10-15 years time-frame for retirement, but I'd surely accept to shorten that if things accelerated a bit.

Of course if you're looking to cash-out this week, it's unfortunate in the extreme.

I have no fear that TSLA will go bankrupt, can never say never, but I find it highly unlikely, as many have said, don't bet against Elon.

As to those here pointing fingers at the missed targets, have you been watching Tesla at all the last few years and learned nothing? Always late, always Q&A issues, but after a while they do get there. They are improving though - X ramp was better than the S, 3 is way ahead of X. Perhaps by the time the Y comes around they'll sort it out.

Buy & hold without margin remains my strategy. Worst-case scenario, I lose the lot, but that will change nothing for me in my daily life. More likely is that Tesla will make me a millionaire, but I just need to wait.

 

[vigleik]

After a day like this I like to take a step back and look at the big picture. One number I like to follow is the price/sales ratio, which I believe is now at a historic low.

For context: The average price/sales ratio of the S&P500 is about 2. But a company that is growing quickly should command a much higher ratio. Just how high depends on how far into the future investors are willing to look, and for how long they believe the growth will continue. Bonus for being profitable, of course.

I also think we should calculate the price/sales ratio by looking at current sales, not the previous quarter or last 12 months. Assuming model 3 production is now up to 1600/week that gives us another 4B of annual sales on top of what we already have with the rest of the company. With reasonable assumptions on S+X, energy, and everything else this gives annual sales of about 17B and a price/sales ratio of less than 3. Not too long ago this ratio, calculated the same way, was about 5.

I believe the reason why the price/sales ratio has fallen so far is that investors are unable to look past the model 3 delays, so Tesla is not getting credit for all the other things we know are coming. Once this cloud clears and investors can see all, or even just some, of those things then the price/sales ratio will go back up. Some time in the near future, hopefully at the end of June but possibly one or two quarters later, model 3 production will reach 5000/week and annualised sales will be closer to 25B. Tesla might once again show a profit. If the price/sales ratio goes back up to 5 that gives a stock price of 700 or so.

In early 2016, when tsla briefly visited the 140s, I thought: This is crazy. I wish I had a brokerage account so that I could buy some stock. Then in November 2016 I got my act together and bought my first shares. I’m getting the same feeling right now. Unfortunately I’m all tapped out, otherwise I would definitely be buying more.

Not an advice.

 

[Tslynk67]

Worth a read, whether long or short. SEC interest is illuminating:


"No matter how good a social investment makes you feel as it is going up, extreme anger will result if most or all of your money is permanently lost, especially when it is due to false and misleading statements by senior company officers.

This is when the [Department of Justice] steps in and escorts untruthful managements to their new living quarters."

What I read in that article is that the guy doesn't understand Tesla at all, he's probably not used to this fast-growth model and can't get his head around it.

 

[Todd Burch]

All this bankruptcy talk is pure BS. As if suddenly in the last few days Tesla's financial outlook has changed.

Seems to me the piece of sh*t shorters who have absolutely zero integrity waited until right before quarter end, when Tesla entered the quiet period and can't comment on financials, to make crap up.

And it seems a lot here are falling right into their trap. This has been going on since the IPO. It's NEVER been accurate. I've been hearing that Tesla's going to fail any day now since then, and it's just not the case.

Think about it. The company's not worse off than they were a month ago. M3 production has at least doubled. (Take a look at the pictures of trucks loading M3s in Fremont in the Model 3 forum--it's clear cars are leaving the factory at a much higher rate than early March).

Payment terms for M3 parts are 60-90 days, so they don't owe a thing for anything made within the last 2-3 months. That means they might need to pay for a couple thousand cars total, while they've taken in payments for about 10,000. Deepak stressed this several times at the last two quarterly calls: as the production pace increases, Tesla's balance sheet gets better, not worse. It's really simple. Tesla has never had trouble raising money if they needed it anyway. They have access to lines of credit they haven't tapped.

I'm surprised that so many regulars here have been so shaken by shorts. Shorts don't know jack squat about the reality of this company, they're just putting on a play for suckers. And they're happy to pass out free front-row tickets to anyone who's foolish enough to take them.

Regulars should know better. I've been to this site almost every day for almost a decade (check my join date). Been invested since the IPO. Listened to every quarterly call. Driven almost 150,000 Tesla miles since 2012. No chance in hell some random short or hedge fund manager who appears at opportunistic times has even a fraction of the knowledge about this company that I do.

The trail of bullsh*t dripping from the mouths of shorts is long. And putrid.

And I'm not fooled.

All in.

 

[bdy0627]

The stock looks pretty horrific technically, I haven't heard any traders excited to get into tsla here and this forum full of bulls seems generally muted on buying. Tsla has a history of surprising, but I'm not optimistic for a move up tomorrow.

What will it take for the chart not to look so horrific other than some green candles? I can't imagine the chart looked anything other than horrific on that dip in Feb 2016, right?

 

[bdy0627]

I feel need (again, sorry) to warn you against reasoning by analogy. Firstly, we talked about this, TSLA was rangebound, and patterns work, until they don't, and this may be the case where they stop working, and TSLA goes into prolonged dip
Secondly, in Feb '16, plenty of time to regret: I sold at $235, started adding at $220, it was dropping and dropping and dropping and I was leveraged to the gills by $180. And it continued dropping and dropping, and I was watching another 20%+ drop to $139. Your current reasoning reminds me of mine at the time of $190, $180 maybe. So, what do you do if bottom is not near, but is at $200, or $190? After all, that would be 50% drop from ATH, like Feb '16. And consider, if TSLA recovers from here on out to $350, would your position not be leveraged enough already for a very nice gain? So, is further leverage with under 1 year options really prudent? 6-12 months of rangebound $200-$280 could wipe you out if you continue leveraging, no?
And thirdly, that '16 recovery was miraculous, no one could believe it at the time, so please don't take it for granted next one would be analogous. I've seen stocktwits short that was literally losing 10K every day of money he didn't have, and was shocked the way it was going up. He was liquidated around $210, but, he shorted at $145 and was sure Tesla can't go through $180 on the way back. Just like we couldn't believe TSLA will break down through $280-$290. I feel that was one in 20 years recovery, so counting on another just like it may be asking for too much.

Sorry if I sound too gloomy, I'm trying to present uncomfortable futures, so you consider all possibilities. Otherwise, recency bias may be too strong, black swans are too hard to predict, but they happen semi regularly on stock markets (option-wise)

Good cautionary points. Thanks.

 

[avoigt]

According to M3OC a large batch of invites went out to Canada today.

 

[bdy0627]

Not for short term trading but i was excited to get back in the game. Still got dry powder for further drops but I doubt it’ll fall much from here. If it drops to $250 would be a no brainer!

I think This is a different time unlike 2016. Global economy is strong, Tsla is much stronger, more mature and is working hard to ramp up the most important mass market product (yes, timing might be off a couple quarters at most, but they’ll get it done.) I really like the risk vs rewards here.

This has been my thought process as well but Zhelko makes some good cautionary points to consider. I'm so leveraged at this point that I'm well beyond "only use money you can lose." It's probably a mistake to keep thinking it's important to add more in an effort to do it right at the bottom. I've got plenty and then some. Time to take a little break on the buying I think. If it starts to climb again soon, great. If it goes down quite a bit further, which I personally doubt, I'll be glad I took a break.

 

[bdy0627]

I find Moody's downgrade suspicious with highly unusual timing. Given that Tesla Q4 earnings were available on 7th Feb, they should have downgraded bonds then only. It just does not make sense to announce this 5 days before end of Q1 given that Q1 production and delivery numbers will be out in about weeks time. Unless Moody's is speculating production miss based on some model 3 tracker.(Bloomberg)

I find the timing.......interesting. Perhaps they do tend to go off of market expectations, but it would make a lot more sense to me if they downgraded AFTER learning of the ACTUAL Q1 production/deliveries rather than a few days before.

 

[Tslynk67]

Norway deliveries continue apace. By the end of the month - assuming 3 more elligible delivery days - I wouldn't be surprised if they're not up 100% on 1Q17...

 

[phil0909]

Transferring data over cellular network cost money, for Tesla. And transferring data real time over cellular network is pure waste of capital. The cars always buffer information locally and wait for WiFi or a time threshold pass to upload.

What is the time threshold? How many minutes or hours?

 

[Drax7]

I would say neither, just optimistic/unrealistic as to what it takes to achieve a goal in a specific time period.

Hubris lots of hubris, the autopilot mess is pure unadulterated hubris.
The falcon wing doors is another prime example.
This automated factory will take much much longer than anticipated.
Again hubris.

 

[justvisiting]

All this bankruptcy talk is pure BS. As if suddenly in the last few days Tesla's financial outlook has changed.

Seems to me the piece of sh*t shorters who have absolutely zero integrity waited until right before quarter end, when Tesla entered the quiet period and can't comment on financials, to make crap up.

And it seems a lot here are falling right into their trap. This has been going on since the IPO. It's NEVER been accurate. I've been hearing that Tesla's going to fail any day now since then, and it's just not the case.

Think about it. The company's not worse off than they were a month ago. M3 production has at least doubled. (Take a look at the pictures of trucks loading M3s in Fremont in the Model 3 forum--it's clear cars are leaving the factory at a much higher rate than early March).

Payment terms for M3 parts are 60-90 days, so they don't owe a thing for anything made within the last 2-3 months. That means they might need to pay for a couple thousand cars total, while they've taken in payments for about 10,000. Deepak stressed this several times at the last two quarterly calls: as the production pace increases, Tesla's balance sheet gets better, not worse. It's really simple. Tesla has never had trouble raising money if they needed it anyway. They have access to lines of credit they haven't tapped.

I'm surprised that so many regulars here have been so shaken by shorts. Shorts don't know jack squat about the reality of this company, they're just putting on a play for suckers. And they're happy to pass out free front-row tickets to anyone who's foolish enough to take them.

Regulars should know better. I've been to this site almost every day for almost a decade (check my join date). Been invested since the IPO. Listened to every quarterly call. Driven almost 150,000 Tesla miles since 2012. No chance in hell some random short or hedge fund manager who appears at opportunistic times has even a fraction of the knowledge about this company that I do.

The trail of bullsh*t dripping from the mouths of shorts is long. And putrid.

And I'm not fooled.

All in.

you are right, the financial outlook has not changed
and thats why bankrupcty is a very real possibility.

 

[Todd Burch]

you are right, the financial outlook has not changed
and thats why bankrupcty is a very real possibility.

Let me know how that prediction goes for you. I'm looking forward to it.