TSLA Market Action: 2018 Investor Roundtable

[S3XY]

Agreed, and note this new disclosure from yesterday's conference call:

Elon Musk: [...] I do know that Tesla will operate its own ride hailing service like Uber and Lyft. We will also have a way for customers to add or remove their car to the fleet. There will be a Tesla-owned fleet and a customer-owned fleet.​

That and their FSD bullishness is one of the biggest news items of the conference call IMHO:

• I fully expect Tesla to refurbish used Teslas that come back from lease or are traded in to the fleet, and add them to their taxi service fleet.
• This is why the plug-in HW3 upgrade computing module is such a big deal: every car that was made after ~December 2016 can go into the fleet, giving Tesla a very low capex path to quickly expand their ride-sharing fleet - and yet not cannibalize supply of new Tesla's.
  
• FSD ride-sharing should significantly reduce insurance costs and overall risks of both the Tesla and the customer ride-sharing fleet and should eventually also allow empty cars to drive to the next customer, or back home.
• Note another benefit: by taking used Teslas off the market they increase the relative demand of new Teslas and further increases the value retention of Teslas.

I.e. the "Tesla ride-sharing fleet" will feed back and provide advantages for their automotive sales ...

The first thing I thought of when Tesla ride hailing service was mentioned was that rather than trading in or selling my current M3, I might just keep it to run on the Tesla Network and earn me some side cash. But I'll have to do some analysis when the time comes to see if it's worth it after charging costs, insurance, maintenance, etc.

 

[MP3Mike]

I paid the entire tax due on my model S when I registered my car - in Colorado. Where do most buyers pay the tax on the car?

California collects sales tax on any car picked up in state even if you are just driving it to your own state that has no sales tax.

 

[Ellec]

I wouldn't worry about the price over the next few weeks, it will continue to be volatile until the market absorbs the reality.

Here is a chart from 2013, when Tesla posted their first surprise profit. It gapped up then dropped for a week, before taking off and within 4-5 months quadrupled. I'm not suggesting this will happen but I think we are in for a climb over Q4.

 

[SteveG3]

It's beyond odd. I've been gawping, with my jaw dropping, about it for years.

The number of people who don't seem to be able to understand basic economies of scale (fixed costs vs. variable costs) is far, far larger than I would ever have imagined, and it includes far, far too many people working as Wall Street "analysts".

I mean, I thought Wall Street analysts were bad, and I knew most people who invested in stocks were incompetent, but before I witnessed this, I would never have believed that so many of them could be unable to understand something this basic. It really is Finance 101, Economics 101, Business 101 material.

It simply astounds me. I've explained this to so many people. While I understand that random people off the street might not be capable of understanding this basic math, anyone who is working in anything remotely related to business management or financial anything ought to understand it, and it seems like over half of them don't.

Gobsmacking.

not everyone is intellectually honest

 

[neroden]

The disinformation peddlers are certainly finding any and every way to spin the news negatively. All nonsense as usual. There may, as tivoboy suggested, be *really* good buying opportunities coming up.

I said I wouldn't buy TSLA to over 25% of my portfolio, but if my construction project finishes up (making my financial outlays clearer) or my merger arb trade resolves either way (leaving me with more cash) and the stock price is still acting silly, I may change my mind.

 

[neroden]

not everyone is intellectually honest

True, but even accounting for the ones who are just lying there's still an astounding amount of ignorance. I mean, you'd think the liars would come up with more plausible lies, even.

 

[Drax7]

With manufacturing efficiencies tesla should be able to generate equivalent eps numbers
($2.90 ) In the upcoming quarters . And as production increases even exceed this eps. This
Is not a one off type event.

In my view, The market has not yet even discounted a minimum of $12 profit per share,
Over the next 4 quarters, And it’s likely they will generate At least $15 per share next year.

Assuming a p/e of 30, and eps of $15, $450 is a short term objective.

 

[Artful Dodger]

Well looks like some kine buying program kicked in at 11:00

SP up to $307.45

 

[Zextraterrestrial]

@Ellec - this chart is exactly what I keep thinking about. I got my S in December before this all happened and it was and is still awesome. It was pretty shocking that it took that long for the stock to take off . i think the exact same thing is/will happen with the 3 but now there are a hell of a lot more people that realize how nice the cars actually are.. and this time it isn't like there is any chance in hell Tesla will go under like there was before they had delivered 20k cars.


...sad that I sold some in that 2012 Nov - Dec jump that never went back down...I'd be scared now that the same would happen trying to play with the regular swings we've seen for the last 3-4 years. I would think(hope?) they might not be swinging so low anymore.

 

[sauce]

Dabbed a bit around on Twitter, for fun, starting from @markbspiegl and branching out. First of all I don't understand the layout of Twitter - who's posting? Who's responding to who etc? (Maybe that says more about my age than anything else, I'm 38 so oldish when it comes to these things). But apart from that: WHAT A CESSPOOL of uninformed negative comments. If this is what us longs are up against I'd say we have nothing to be scared of.

I would go as far as claiming it gives us a competitive edge. We will own the shares they don't.

 

[Bobbyducati]

bought back in at 303 after selling after hours at 320. disappointed it came back down but not surprised. onward and upward!

 

[LoveTSLA]

Sell the news.

Someone might think TSLA will be traded as nflx last week. So they sold this morning. I will bet they will be regretted.

 

[Lucky_Man]

You win. Sound your horn so that the potential people on the other side of the turn know you're coming and can get out of the way. (or if they can't get out of the way, can sound their horns back at you...) Yep!

This is actually the reason cars have horns...

This is why I wish Elon's team would give us a lower-volume horn option (chirp?) when turning right across a pedestrian crosswalk. I needed that in FoCo last spring. She was entirely blocked from my vision by the 'A'-pillar and, luckily, all I hit was her icy stare.

 

[neroden]

With manufacturing efficiencies tesla should be able to generate equivalent eps numbers
($2.90 ) In the upcoming quarters . And as production increases even exceed this eps. This
Is not a one off type event.

In my view, The market has not yet even discounted a minimum of $12 profit per share,
Over the next 4 quarters, And it’s likely they will generate At least $15 per share next year.

This actually seems like a pretty reasonable guess for next year's profit per share. Obviously, it depends on many factors known collectively as "execution".

Assuming a p/e of 30, and eps of $15, $450 is a short term objective.

Marketwide p/es are crashing, and if Tesla were evaluated as if it's steady-state (the most common form of idiocy I see on Wall Street) I wouldn't expect a p/e higher than 20, which would mean the current stock price, $300. However, Tesla really should be getting some sort of credit for its growth rate. I believe it's fair to say that Tesla will continue to follow the exponential growth curve (as do all EVs worldwide).

According to the somewhat silly PEG ratio, TSLA is severely undervalued.

 

[Right_Said_Fred]

I wouldn't worry about the price over the next few weeks, it will continue to be volatile until the market absorbs the reality.

Here is a chart from 2013, when Tesla posted their first surprise profit. It gapped up then dropped for a week, before taking off and within 4-5 months quadrupled. I'm not suggesting this will happen but I think we are in for a climb over Q4.

I think you are absolutely right. It will stay volatile and it will take time to sink in, maybe even a few quarters. But SP will take off one day, probably when we least expect it.

Any weakness until then gives us a chance to buy more. We are priviliged, as we can see much further into the future than others. I’d almost call it insider trading

 

[ZsoZso]

CNBC front and center this morning with every analyst's reasoning TSLA is a 'sell'. Embarrassing stuff.

Apparently this wildly expensive first quarter of truly profitable production is the best we're ever going to see. As they continue to ramp, things will get less lean.

Reading these I wonder to myself if there is one adult human being on the planet who buys this nonsense logic.

Here's what every major analyst had to say about Tesla's earnings: 'This quarter was different'

Did they bring out uncle Bob too ? (as in Bob Lutz )
I will click on CNBC only to see him repeat his usual nonsense about Tesla burning cash and never producing profit...

Please, alert me if he shows up! I need a good laugh this morning!

 

[tivoboy]

This is why I wish Elon's team would give us a lower-volume horn option (chirp?) when turning right across a pedestrian crosswalk. I needed that in FoCo last spring. She was entirely blocked from my vision by the 'A'-pillar and, luckily, all I hit was her icy stare.

Is there a way to like this more than just one time? Totally agree, the horn s..s..must have a chirp or ping or simple blip option, it's literally all on fire engine or nothing at all.

 

[ggr]

What? If he for example has a short term tax loss, (probably the case based on the scenario he described) and now takes a long position and sells ultimately for a LT gain, those two won't offset each other.

Worked example:
Alice buys at $300. Price goes down to $250. Alice gets depressed.
Alice sells at $250, for $50 loss. She can claim this on her taxes. Stock has great earnings, goes up to $310. Alice wants to get back in.
Alice buys at $310, triggering the wash sale rule. She can no longer claim the $50 loss.
HOWEVER Alice records the cost basis of the purchase as $360: actual purchase price plus the $50 wash loss.
Wait one year.
Alice sells for $500, and only pays tax on $140 of capital gain, not the $190 it would normally have been.

So you're right, but she could have chosen to sell a day earlier to make the whole transaction still short term. She'd get the full value of the tax loss on the $50, but also pay the income tax on the other $140. Which is worse?

Some people make stupid decisions because of tax law. I can't remember where I first heard this, but I live by it:
"Don't let the tax tail wag the income dog."

 

[sauce]

Innovate or die.

We all know what OEMs have chosen. It is only a matter of time.

Toyota first, please. The level of contempt they have shown so far for EVs is next-level frustrating.

 

[MartinAustin]

Here's what every major analyst had to say about Tesla's earnings: 'This quarter was different'

The Needham analyst expects ZEV sales to decline... anyone know how this could happen? Is it because other manufacturers are starting to make their own BEVs?