TSLA Market Action: 2018 Investor Roundtable

[K_Dizzle]

What do you guys think would happen to SP if Tesla announce they are currently producing 1100 Model 3s/week?

why post such a ridiculous question? the production rate announcement will be over the weekend more than likely it will be attached to the Q1 delivers. If the production rate was that low, they wouldnt even mention anything.

 

[ggr]

Since this is Market Action, a quick reminder that the market closes early tomorrow (Thursday 13:00 EDT) and is closed entirely on Friday. Don't make the mistake of thinking that you can wait until tomorrow afternoon...

 

[K_Dizzle]

Since this is Market Action, a quick reminder that the market closes early tomorrow (Thursday 13:00 EDT) and is closed entirely on Friday. Don't make the mistake of thinking that you can wait until tomorrow afternoon...

bought 4000 shares at 258.xx today, wish me luck fellas. May the gods frown upon the shorts.

 

[ruralectric]

I think itll be exactly 6 weeks before you get one.

I'd be fine with waiting a bit, since I've been pouring my car-purchase dough into into an exciting investment opportunity the last few weeks. I just couldn't help myself.

 

[smalltownguy]

Added 700 shares at 257.

Let's do this!

 

[Richgoogol]

why post such a ridiculous question? the production rate announcement will be over the weekend more than likely it will be attached to the Q1 delivers. If the production rate was that low, they wouldnt even mention anything.

Well, just trying to bounce ideas off of you guys to see if this thing could get any worse if they announce the lowest delivery number possible. I highly doubt the SP will get any worse but with the macro and momentum of the shorts/sellers lately, it's anyone's guess. But I think you are right about if the rate is really low, they will definitely sugar coat it.

bought 4000 shares at 258.xx today, wish me luck fellas. May the gods frown upon the shorts.

Holy cow...is there a typo? 4000 shares?

 

[phil0909]

]

Those who think this price drop is about Uber or the Model X crash are wrong. It's about Moody's pointing out the Tesla will soon be out of cash:

Moody's Thinks Tesla Will Soon Be Out Of Cash - Tokyo Picker | Seeking Alpha

This doesn't make sense to me. The cash burn has long been known, to anyone paying attention.

 

[Do It]

The desperation they are fighting with can certainly be felt, it’s a smart move on their part. Bravo to them for taking control of this conversation. As a veteran long-term investor, I can say I expected a dip (based on the missed projected ramp), but I certainly did not foresee such a massive one based on such uneventful storylines within the press (what else can we expect from them—Tesla doesn’t use their advertising channels..).

The amount of doom and gloom reports that have been trending is almost comical (who trusts Moody’s anymore? Since they were one of the orchestrators of the last recession). Consider this dip a gift if you have money sitting on the sidelines, all my dry powder will certainly be deployed after numbers are released, that is when the market will start to understand the bigger picture.

Overall Tesla remains healthy, steadily making progress towards a ramp that will cement their place in the automotive industry—profitability. All else considered, if Tesla stops expanding today, they will be profitable, but that isn’t their goal. Tesla’s goal is to dominate the EV industry much in the way that the iPhone has... you can tell by the endless software updates and engineering breakthroughs from batteries to AP, navigation, maps, TE, solar, Semi, Roadster, 0-60 in 1.9 seconds, Greece engineering plant, etc. These are all signs of a healthy growing company (they’ve even had 2 acquisitions in robotics lately—think Grohman...). It’s when you stop seeing these advances that will generally be signs of a contracting company (think Fisker, all talk but no walk).

For those who are worried due to the recent misses in production, Tesla’s comment on profitability has been quite consistent—5,000/ week will get them there. They are, theoretically one quarter away from that. Their balance sheets are getting better by the Q due to the M3 ramp, not worse, albeit slower than we’d like. Like most of you, I am waiting for April 1st-4th as a re-entry point. At that point I would expect a lot of the Fudsters arguements to be less effective as a ramp of 1,500-2,000 will be about 2-3x better than last Q. If they can replicate this for next Q, they will be at 3,000-4,500 (give or take 2 weeks) for Q2 production. This is where the bear arguments will start to show signs of fallacy, a steady clip of 5,000 M3 units in Q3 will likely shoot us to the moon as it’ll guarantees Tesla’s survival.

Lastly, Tesla has over $3 billion in cash, even if they burn through $500m-$1b the next 2 Q they’ll have plenty of reserves left (which is why Deepak/Elon has stated “Zero” capital raise needed). What they’ll need the capital raise for is further expansion into China for another GF.. make no mistake about it, they’re waiting for the best timing to get the best bang, that time is when they turn a profit somewhere in Q3.l, and ita coming whether the shorts spread FUD or not. Make no mistake about it, shorts! Elon is coming for you.

Except tsla insiders people on this forum collectively has the best understanding of the financial condition of tsla. It would be nice if we can collectively create and maintain a financial model, so we can counter misunderstanding or malicious FUD about tsla financial health with an easy-to-understand model.

1. Provide more details to what’s in quarterly report. E.g. break down of equipment purchase for M3 vs. GF expansion, cost of charging network expansion vs. service center expansion, etc. These break downs are not reported in quarterly report, but I believe we collective can figure out ball park numbers.
   
2. Keep all quarterly data in one spreadsheet so it is easier to look at trends, etc.
   
3. Provide good annotation so non-accountant can understand line items better
   
4. Focus on past data and leave out the future projections. Individual people can model future project based on his/her own assumptions using the data.

 

[Mkorpal]

]


This doesn't make sense to me. The cash burn has long been known, to anyone paying attention.

It also doesn't matter if the ramp happens. Cash burn is always highest at the beginning, when revenue is low and expenses are high. It's of zero consequence if they hit production targets. Even if the ramp is still slow, it shouldn't be too much of a concern for a while as they are past the most expensive portion of the ramp.

 

[ggies07]

Why does this number call to mind Forbes and swatting?

not sure what you mean....I found the exact number though - it was 115k, I wasn't off by that much.

before Elon Musk walked off stage on March 31st, he confirmed Tesla had already received over 115,000 reservations

Tesla Model 3 reservations reached over 400,000 based on cash flow from customer deposits

 

[Lessmog]

bought 4000 shares at 258.xx today, wish me luck fellas. May the gods frown upon the shorts.

Wow. Here I thought I was bold buying 10 at 266, but I agree with your sentiment and am just a tiny bit envious.

 

[phil0909]

It also doesn't matter if the ramp happens. Cash burn is always highest at the beginning, when revenue is low and expenses are high. It's of zero consequence if they hit production targets. Even if the ramp is still slow, it shouldn't be too much of a concern for a while as they are past the most expensive portion of the ramp.

So that leaves - the fatal Model X accident...

 

[jhm]

not sure what you mean....I found the exact number though - it was 115k, I wasn't off by that much.



Tesla Model 3 reservations reached over 400,000 based on cash flow from customer deposits

Sorry, it was a joke, a brief joke.

 

[Waiting4M3]

Negative operating cashflow of $2 billion in 2018, $1.2 billion debt maturing through 2/19, $2.4 billion owed to suppliers.

I like that last number, Tesla usually has 25% gross margin on their cars in high volume production, the more they own to suppliers, the better, IMO

 

[Waiting4M3]

What do you guys think would happen to SP if Tesla announce they are currently producing 1100 Model 3s/week?

It stays where it is now, it's priced in, IMO

 

[Esme Es Mejor]

bought 4000 shares at 258.xx today, wish me luck fellas. May the gods frown upon the shorts.

Makes my 100 shares at 255.xx seem downright paltry.

Hope you have no margin on that. Share prices are going way up from here, but there’s no telling what the timeframe is.

 

[doctoxics]

My thoughts on the sell off. Not really about Tesla. All about volatility as a result of events from Washington. If the volatility stays high, there will eventually be a panic and a greater overall sell-off than what we have seen so far. Tesla is particularly susceptible due to perceived weak fundamentals. The smart money is trying to run away from an impending black swan event. They have to move early because of their impact on volume and price action.

If you are looking for an entry point, we are probably not there yet. I expect a rebound for a while and then the real black swan event. Hope I am wrong, but staying in cash.

 

[Waiting4M3]

Ihor Dusaniwsky on Twitter

$TSLA down another 4% this morning following a 8% drop yesterday. Short interest is $8.5 billion. #Tesla shorts were up $749 million in mark-to-market profits yesterday and another $390 million so far today - up $1.2 billion year-to-date.

... stay alert Shorts, Longs are gonna get their monies back in next few days

I'd love to see it happen in the next few days but there is a possibility that it may not be that soon. I think the drop has as much to do with shorting, but also weak longs selling, either by choice or get their stops taken out. The shorts IMO is a pyramid scheme, old shorts cash out, new shorts pile in at lower prices. When good news comes out, it's the last bunch of shorts that got in that will get burned, and them covering won't get us all the way back. The weak longs likely won't get back in immediately either, a lot of them will remember the pain just long enough to sit out the rally and buy high after the rally is mostly done, it's the same lack of long term vision and pain tolerance that dooms them to both sell low and buy high. The big boys may step in and steal some shares, if it happens, we won't know it till it's over. When Jonas gives an "upgrade", it's probably a signal that his clients have eaten all they can.

 

[Mkorpal]

So that leaves - the fatal Model X accident...

The dip is almost certainly a mix of macro and the bond issue, but it really is just nothing over hot air. It only re-affirms those who buy into the Tesla is going bankrupt tomorrow narrative. And we know that holds no water.

 

[K_Dizzle]

Makes my 100 shares at 255.xx seem downright paltry.

Hope you have no margin on that. Share prices are going way up from here, but there’s no telling what the timeframe is.

Thanks, actually around 11% is on margin. It’s small enough percentage that I’m comfortable riding this out. I do go in and out of Tesla, I don’t alway get the timing right but I’m feeling confident next weekda numbers will suprise on the upside.