TSLA Market Action: 2018 Investor Roundtable

[SteveG3]

What I am saying is that Tesla has large purchase agreements, notably with Panasonic that bind Tesla to take up a number of cells (and pay for it) that they then need to warehouse because Model 3 and Tesla Energy production are both bottlenecked at the moment. These purchase agreements as reported are $2.7B for 2018 with over 90% from Panasonic. At $100 per kWh that's 27 GWh Tesla must buy this year. Guidance is 1 GWh of Tesla Energy product, leaving us with 26GWh of cells that Tesla is contractually bound to purchase. 9 for the S/X makes 17GWh for the Model 3 or enough for over 225 000 LR Model 3s. That's a number Tesla is almost guaranteed to miss. So will Panasonic let them off the hook, if they don't buy that many cells. Or will they buy them, pay for them and see cash being converted in inventory. So how you see that story unfold is very relevant in trying to determine Teslas cash position over this year.

I'll quote myself from the general thread earlier today (post #5184), bolding added for the key part in response to your comment.

"Matt, be careful, there are many people out there pumping out misinformation about Tesla at 100 mph at the top of their lungs. It looks like you have been duped by some of this misinformation.

Tesla is not facing a liquidity crisis. They entered 2018 with about $3.4 billion in cash. Low Model 3 production in Q1 may mean this dips to about $2.4 billion, but, Q2 is likely when the tide turns, if not, then Q3. Their next big amount of debt coming due is in March... of 2019! about $300 million will come due before then, but on the scale of $2-3 billion cash on hand, that is not a big deal.

Just didn't want to see anyone duped by misinformation. MattEnth, key is that we all learn to think for ourselves, I'm sure you can do better than you ever imagined doing that! Really mean that!"

 

[Richgoogol]

Last bought 50 shs @ 253.1

 

[Tenable]

I'm likely going to finally back the truck up in a big way if we hit the 230s. Regardless of what I've been posting, actually seeing TSLA at 250 feels surreal.

 

[sweter]

Just as I was getting ready to buy at 253 it's reversing ?

 

[bdy0627]

I just added a small position of J19s. I want to back the truck up but sadly I'm not convinced we have bottomed just yet. Fingers crossed that I regret not buying more a week from now.

I added a few J19s here as well. I'm not sure I can avoid adding a few more tranches on 10% drops. If I look at all of my investments, at this level I have complete conviction in TSLA as an investment over this next 9 months. I also bought some NVDA J19s because I think their earnings is going to be very good and they have sold off pretty hard as well.

 

[Quassinoid]

Based on the M3 numbers I've seen, I think Tesla will achieve 2500/wk production by end of 1Q. A lot of people look at the ramp as linear, and it's not. Because Tesla is close to the steepest part of the ramp curve, going from 2000/wk to 2500/wk doesn't take that long. Bloomberg calculator is not a useful indicator during this time as they use averaging. The rate of change is too fast for the calculator to be predictive of the current production rate. I may eat my words, but I think we're much closer to target than it would appear.

 

[30seconds]

What I am saying is that Tesla has large purchase agreements, notably with Panasonic that bind Tesla to take up a number of cells (and pay for it) that they then need to warehouse because Model 3 and Tesla Energy production are both bottlenecked at the moment. These purchase agreements as reported are $2.7B for 2018 with over 90% from Panasonic. At $100 per kWh that's 27 GWh Tesla must buy this year. Guidance is 1 GWh of Tesla Energy product, leaving us with 26GWh of cells that Tesla is contractually bound to purchase. 9 for the S/X makes 17GWh for the Model 3 or enough for over 225 000 LR Model 3s. That's a number Tesla is almost guaranteed to miss. So will Panasonic let them off the hook, if they don't buy that many cells. Or will they buy them, pay for them and see cash being converted in inventory. So how you see that story unfold is very relevant in trying to determine Teslas cash position over this year.

Agreements this large don’t work like that. There is a lot of scheduling timing and flexibility built into large supply agreements especially when you know there is demand/ production and uncertainty.

It hurts Panasonic if Tesla isn’t successful. They are in thIs together

 

[Tenable]

I'll quote myself from the general thread earlier today (post #5184), bolding added for the key part in response to your comment.

"Matt, be careful, there are many people out there pumping out misinformation about Tesla at 100 mph at the top of their lungs. It looks like you have been duped by some of this misinformation.

Tesla is not facing a liquidity crisis. They entered 2018 with about $3.4 billion in cash. Low Model 3 production in Q1 may mean this dips to about $2.4 billion, but, Q2 is likely when the tide turns, if not, then Q3. Their next big amount of debt coming due is in March... of 2019! about $300 million will come due before then, but on the scale of $2-3 billion cash on hand, that is not a big deal.

Just didn't want to see anyone duped by misinformation. MattEnth, key is that we all learn to think for ourselves, I'm sure you can do better than you ever imagined doing that! Really mean that!"

Steve I am more of a lurker than an avid poster on this forum, but I very much appreciate your posts. You're always level headed and do your best to be data oriented.

 

[⚡️ELECTROMAN⚡️]

IT was just the usual morning dip. Bought more at 256.

 

[elasalle]

I added a few J19s here as well. I'm not sure I can avoid adding a few more tranches on 10% drops. If I look at all of my investments, at this level I have complete conviction in TSLA as an investment over this next 9 months. I also bought some NVDA J19s because I think their earnings is going to be very good and they have sold off pretty hard as well.

Good point, starting next week, people will need to start planning for Earnings season, not just be trading based on headlines.
AAPL reports end of April.

 

[bdy0627]

I just added a small position of J19s. I want to back the truck up but sadly I'm not convinced we have bottomed just yet. Fingers crossed that I regret not buying more a week from now.

Option Sniper is starting to watch it closely, considering a buy at the monthly 50 SMA, which is $252. That suggests to me that traders are starting to consider jumping in for a reversal play.

 

[elasalle]

OK, also Longs should Sell at ATH, and Shorts must take profits at ATL(ows) .. else it's just paper money ...

 

[Richgoogol]

Option Sniper is starting to watch it closely, considering a buy at the monthly 50 SMA, which is $252. That suggests to me that traders are starting to consider jumping in for a reversal play.

That was one hell of a reversal though. Lucky I scooped up 50 shares before it jumped 3% in a matter of 15 minutes.

 

[BornToFly]

Just as I was getting ready to buy at 253 it's reversing ?

I used the last of my cash to close as many of my naked puts as I could as the stock was approaching the low of the day. This pretty much guarantees that the stock will go straight up from here, maximizing my loss. I stopped the drop. You are all welcome!

 

[Tslynk67]

OK, place order at 255 - wanted 250, but have been burned in the past.

And filled

 

[Intl Professor]

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.

Well said. In addition, they are always ex post. They are not, nor do the pretend to be predictive. Many here based on facts, science and logic, attempt to predict the future value of the stock, not its actual price. I use goose entrails and an ombic chant to predict when to buy.

 

[bdy0627]

I'm likely going to finally back the truck up in a big way if we hit the 230s. Regardless of what I've been posting, actually seeing TSLA at 250 feels surreal.

I really believe that in a few months time, it will be nearly impossible to believe that just as the Model 3 ramp finally started to really take off, the market decided TSLA was worth about $250. I think there is a very very good chance that some huge amounts of money will be made here.

 

[bdy0627]

Based on the M3 numbers I've seen, I think Tesla will achieve 2500/wk production by end of 1Q. A lot of people look at the ramp as linear, and it's not. Because Tesla is close to the steepest part of the ramp curve, going from 2000/wk to 2500/wk doesn't take that long. Bloomberg calculator is not a useful indicator during this time as they use averaging. The rate of change is too fast for the calculator to be predictive of the current production rate. I may eat my words, but I think we're much closer to target than it would appear.

I'm not counting on that, but wouldn't that be nice! Shorts might be a little upset about it, though. In fact, I can't think of a much better setup to put a little squeeze on those pessimists as they climb over each other's backs trying to lock in their gains and cover. With this brutal dip, at least I can dream about it.

 

[Waiting4M3]

I'm not counting on that, but wouldn't that be nice! Shorts might be a little upset about it, though. In fact, I can't think of a much better setup to put a little squeeze on those pessimists as they climb over each other's backs trying to lock in their gains and cover. With this brutal dip, at least I can dream about it.

It's possible that the drop that happened in the last couple of days can be attributed both to shorts selling and also longs getting their stops taken out. In this case the smart shorts would have covered at the bottom, basically robbing those longs. This is why I never use stop loss.

 

[defc0n]

time to step away from the computer to eat some food and convince myself to wait until after Q1 earnings...