TSLA Market Action: 2018 Investor Roundtable

[Unpilot]

The bear spin is some weak as shat...if you know what I mean

 

[Jayjs20]

Can’t imagine that happening. Too far down in the rabbit hole.

I think for him, it's just a matter of pride vs money

Anyways, remember two days ago when we were at 260? So far, it's +70 in 2 days+AH

 

[ZachF]

$330 AH

 

[MarcusMaximus]

$331, holy hell.

 

[Bobbyducati]

well i sold all my excess shares at @320 on an order i placed earlier today. and my short call caps me out at $299/share so at this point im maxed out profit wise. congrats to everyone!

 

[MartinAustin]

Keeps bouncing off of it. Lets see if it can stick...

...and, of course, as soon as I say that it jumps over 326.

I think $325 is going to stick.

 

[T-Will]

Option_Sniper‏ @option_snipper
Option_Sniper Retweeted Option_Sniper

$tsla already at 318 now. strong resistance above are 321 327 331. if it can clear 331, gonna trigger huge short squeeze into 355 372 possibly 387 again. but let's see if it gets through 321 first.

What happens now??

 

[azaz]

Charley Grant of WSJ who demonstrates straight up animosity towards Elon hasn't tweeted since the letter

LMFAO

 

[Wnuk]

Hope this doesn't turn into a NFLX. Macros are troubling, we need this to hold.

 

[Tslynk67]

Hell, water, cold temperatures, and all that - a positive, factual article from Kolodny!

*** W*A*R*N*I*N*G - C*N*B*C ***

Tesla boosts cash position despite repaying loan, expects trend to continue through Q4

 

[MarcusMaximus]

I think $325 iView attachment 346677 s going to stick.

But is $332?

 

[MXWing]

"I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened."

TESLAQ motherfrackers

WHOOP WHOOP

 

[Johann Koeber]

Finally I have the feeling, the outlook for the next quarter is not too optimistic. A win should feel like a win.

 

[mikevbf]

But to get the Chinese EV incentives I think the batteries have to be made in China. So that really encourages making the batteries/packs there as well.

The plan is to produce batteries in all future GF's, but it is not clear in the report when they will start that aspect of the production in China.

 

[EV forever]

So my key number is model 3 gross margin:

20% Q3 and guided for same in Q4. I find that neutral to negative honestly.

Everything else I have to sort out.

Tesla guided for 15% in Q3 and achieved 20%. I find it positive to super positive honestly.

Only forward numbers actually matter since they embed all the knowledge of management not just trailing. 20% matches past guidance, but expectations would have been slightly elevated since it has become known since that prior guidance that AWD and P was outperforming. The same reason they beat Q3 guidance should have translated to beating Q4.

And the real problem with 20% guidance is the difficulty after 18 months of production to easily point at cost savings that allow for 25% once the SR model dominates sales volumes, but you have to actually get out spreadsheets and think in detail to understand this, which has been done elsewhere. It's my opinion this is the single number that measures business health the best but I also like these op.ex numbers. That was extremely impressive.

20% exceeds past guidance. Rest of your post is spinning a negative tale where none exists.

Mod: Offending post deleted on those grounds. Please stop responses.

 

[Compton]

What happens now??

White shorts are turning brown.

 

[Ulmo]

I believe shorts will predictably once again attack the increase in accounts payable as the main reason Tesla is cash flow positive. I do not know if that attack will help them at all.

They are, but it is another short's lie, because from Q2 to Q3 accounts receivable increased $18,636,000 more than accounts payable increased, i.e., a growing company making more revenue, which has been the story all along, leading to more profit.

It seems as if all the shorts come from declining companies that never grew in their life, and don't even know what it looks like, and all the manufacturing analysts left for offshores long ago because we are supposed to be a "service economy", but now we aren't any more and they are miffed because their offshore stuff isn't doing what they want.

 

[ThereAre4Cars]

Note that this 20% includes increased costs due to tariffs and a newly increased mix in lower margin versions.

Yeah the tariff is an understandable adjustment like fx but since it's small (50M$) we can ignore it's implications. The mix of lower margin versions is plus or minus an adjustment to the margin outlook depending on just how many sell, since on the other hand the P and AWD sales again are higher than prior expectation.

 

[Fact Checking]

I have just gone through the update letter with a fine comb, including the numbers, and WOW.

There's not a single negative note compared to realistic expectations. The China tariffs were expected and a -$50m hit from them is much lower than expected.

Some highlights:

• They only sold $50m in ZEV credits - I.e. below last year's levels, and still made a record quarter.
• Very little "accounts payable" cash generation: the 1.3b generated from operations is genuine and sustainable (!)
• Inventory levels are picture perfect.
• Opex got reduced (!), this is a beat as well.
• Model 3 gross margin above 20% - this is way above guidance and was the main driver of this jaw-dropping quarter and profitability.
• Capex lower than expected, despite accelerated GF3 investments.
• They are guiding to pay back bonds in cash in Q4, and paid back $80m+ bonds in cash this quarter already.
• In Q3 Tesla already earned enough cash to pay back the $920m March 2019 notes (!), the "Cash Crunch" bear thesis is dead.
• If Moody's was consistent they'd have to upgrade Tesla's credit rating to investment grade right now.
• Customer up-sales from <35k cars is ~50% of trade-ins, this indicates an at least twice as large addressable market for the Model 3 in the U.S. as we speculated about so far (!).
• They expect even better Model 3 sales in Europe, because the mid size premium sedan market is twice as large there. (!)
• They expect to start assembling the first Model 3's in the Shanghai Gigafactory in 2019 already (!), which should be fantastic for China sales and margins, as these units will have 0% Chinese import tariffs.
• Guidance for Q4: similarly robust cash generation expected - this is good news in term of future Gigafactories and revenue growth.
• No equity raise needed or planned, convertibles get paid in cash not shares, no dilution!

I'm absolutely stunned!

Lots of kudos to @luvb2b for calling this correctly: that was a masterpiece of a model.

 

[MP3Mike]

The plan is to produce batteries in all future GF's, but it is not clear in the report when they will start that aspect of the production in China.

Well they are going to start taking orders for Model 3 delivery in China this year, and plan for GF3 to be making Model 3s sometime next year... Maybe the first Model 3s will be imported... (I can't imagine people wanting to wait 3/4 of a year after they place their Model 3 order.)