TSLA Market Action: 2018 Investor Roundtable

[sundaymorning]

Looks like the media is starting to change its tune, from Forbs:

Guess What? Everyone Was Wrong About Tesla

Meanwhile, the company’s profit margin on every Model 3 it sells is now around 20%, well above the industry average in its segment, and overnight its prospects for growth and profitability now seem not only credible, but probable, regardless of the belief in some quarters that Musk is crazy. The world would be a better place with a few more crazy people like him in positions of leadership.

It’s obvious that the smart shorts like Citron has figured it out. The dumber more stubborn shorts who are caught in the shorting Ponzi scheme will likely be slaughtered.

 

[ggr]

Indeed, Tesla's corporate lawyers need to start thinking about anti-trust regulations. I suggest Tesla start by giving Bollinger Motors access to the SC network for their upcoming B2 EV-SUV.

Bollinger, like everyone else, already has access to the supercharger network, if they want to pay their fair share of costs.

 

[Fact Checking]

There are signs that Tesla is not planning to maximize short-term growth. Their expansion choices so far seem to be more designed to reduce risk. Tesla almost certainly could have made a more aggressive deal in China with production starting sooner with more capacity. Instead the choice seems to be to assure success and non-dilution of ownership.

FTFY - I'd expect 2019 to be high growth again.

Also, 20%+ cash generation rate (30%+ for their mature products like the S/X) provides more than enough capital to grow.

Tesla's main problem, going forward, is to not grow too fast.

 

[Tslynk67]

Sorry, couldn't resist...

How come you don't charge at home? In an apartment where it's not possible?

Let’s put it to the test. SP has been trading sideways in a ‘flag’ pattern since going from 200 to 380 in 2017. If we break through the top of the flag at 380 we should make a similar movement up from the bottom of the flag to complete the pattern, according to the TA theory. That should get us to 430. From there on it’s uncharted territory.

I have no idea what a "flag" pattern is, you'll need to draw it... Any I would't say we've been trading sideways, it's been up and down like a merry-man's backside...

The scenarios why the SP will go up or down are unfortunately endless. There are many possibilities out there and I do not even try to start to number them.

Short term we all do not know what happens Monday or this week. We may go up or down and find good reasons in retrospect. Long term is what really counts.

As pointed out from many here the company is heavily undervalued and with every quarter from now on with continuous positive productions units and financials there are not really many scenarios out there that the SP will go down or stay flat on the long run.

Its a while ago that I posted that the stock went flat for 4 years and 2 month until it broke out and we had a nice bull run. Since then only 1 year and 7 months passed by but if we put the fundamentals in relation to the SP than we never had a better situation than today. IOW, a break out is overdue but although I hope it happens soon and there is a good reasoning for it we cannot exclude that it takes longer.

In 6 month from now we have exactly 50% of the previous side move accomplished and that will be in April 2019, end of the month when we will see the Q1 results. Nice coincidence and pure speculation....

As of today I would say there is room to get closer to $380 until Q4 ER. At that stage a lot is possible but it will be a larger resistance to overcome. The good news is if we overcome it we can expect exaggeration on the upside to happen. That would be fun to watch!

To be honest and this may receive a lot of disagrees I believe in the possibility of a scenario that Tesla manage a break even or slight annual profit for 2018. I assume most people will disagree with it and have good reasons for it. I am not an financial expert nor an accountant but lets all make a step back and acknowledge that almost all of those experts have been taken by surprise about the Q3 numbers. What happens if we are taken by surprise in Q4 as well?

One of the very few that has been criticized here heavily but hit the numbers very close is @ValueAnalyst . We should all applaud him or her for that prediction. Congrats by the way for the successful establishment for your own investment community.

Break even or even a slight profit for 2018 may look unreasonable for most but the Q3 numbers did as well. I would appreciate if the smarter people than me here take their pencil out and tell me how unrealistic that really is.

Well VA does make some good predictions, but I didn't appreciate he mud-slinging with some other members recently, that doesn't help anyone IMO. I think it got her a ban too.

Not sure if it's possible for Tesla to break-even this year, but if they did then...

 

[ggr]

While I agree that most technical trading is nonsense, the fact is that arbitrage opportunities are left on the table all the time. Advantages simply are not arbitraged away. The most famous example I can think of is RDS.A and RDS.B stock. You could make money consistently just by shorting one and buying the other, and reversing every so often. Few enough people do it that *you could still make money doing that right now*.

So you are simply dead wrong about this point. You are repeating one of the versions of the efficient market hypothesis, and specifically, one of the false and disproven versions.

Fascinating to go down that rathole for a minute. Royal Dutch Shell has significantly missed its estimates for years running, and yet the analysts all rate it "strong buy" or "buy".

How come they have two symbols, any idea?

Discrepency between Berkshire stocks is much smaller, not to mention hard to arbitrage at $270k/share.

 

[CorneliusXX]

No need to get so defensive. I was just curious how someone could be so sure of someone's age solely via forum posts. From a psychological standpoint that is interesting.

Your defensiveness and boastfulness are concerning signs. I recommend you looking into what those might be symptoms of.

Trumpitis?

 

[hacer]

Thats fine but you may have overlooked two sentence:

"Quick math about the value of free SupperCharger here in Germany...."

You live in Brussels rights? So my calculation does not apply to you.

...

Where you are going wrong is comparing free supercharging to the cost of gas. That is totally wrong. You need to compare the cost of free supercharging to the cost of paid charging (super or otherwise). It dramatically changes the numbers.

 

[sundaymorning]

i’ll get excited about it if/when things start happening. EAP is impressive. other automakers have similar abilities. let’s see where it goes. i’m not ready to value tesla differently. on the other hand, i don’t think it should be valued less than waymo, uber(especially), GM(cruise).. from autonomy perspective. but i’m not ready to add multiples for something that may never happen.

Keep in mind that waymo, GM and Uber cruise control is restricted and confined by a “Geofence”. Meaning there is an invisible fence around the geography of where you can take their cars and put it on cruise control. If you take their cars outside this fence, well, it’s not recommended you do that....their system cannot figure things out on its own in a more complex and diverse environment like Tesla. To me, it’s a no brainer which company is ahead. Especially with navigate on autopilot enabled.

 

[Artful Dodger]

Bollinger, like everyone else, already has access to the supercharger network, if they want to pay their fair share of costs.

In theory, Elon says he will grant it if manufacturers help pay the cost, but it hasn't happened for any auto maker yet.

At my suggestion, Robert Bollinger attempted to contact Elon via twitter to initiate that for his new EV, but that was the day of the New York Times hit piece on Elon (Aug 16, 2018).

TSLA fell $35 on Aug 17 so its understandable Elon was a little distracted. Still it's up to Robert Bollinger to persist if he wants to join the SC network. Elon reinterated his willingness on Wed Oct 24 during the 2018 Q3 Conference Call.

 

[ggr]

Actually, the thesis is quite similar to Tesla. Anyone else *could* theoretically produce a cloud product as good as Amazon which was plug-compatible... but nobody else *is* doing so (nor will they any time soon). Just like anyone else *could* theoretically produce electric cars as good as Tesla with a similar Supercharger network etc... but they *aren't*.

Full disclosure: I'm also invested in Amazon, and my investment thesis is based on AWS taking over the world.

Mild disagreement: anyone who wanted to duplicate AWS would have to start building massive server farms without yet having the economies of scale that Amazon already has, so would have to price the service higher, in which case everyone would just use AWS instead. Also there's a lot of internal stuff in AWS management that isn't available to third parties, and would have to be developed again.

Our startup uses AWS a lot.

I agree with your thesis.

 

[ggr]

In retrospect, I wish forum software was smart enough that when you ignore someone, it can also parse and remove all replies to the person being ignored too.

Once upon a time it did. It was, in many ways, worse. There is value in seeing the correction to misinformation, even if you didn't see the misinformation.

 

[bdy0627]

It was Elon’s decision to refund 5k.

Given that Elon's refund tweet will likely mean Tesla losing about $50M+, and therefore seems to be significant company related information, shouldn't he have screened that through Tesla first? It seems like it was a pretty impulsive decision and tweet by Elon. I thought his settlement with the SEC involved avoiding such impulsive tweets. I highly doubt there would be any action taken by the SEC on it, but it's an indication that Elon is pretty much going to continue to decide and tweet what he wants to regarding Tesla. Makes me wonder if he may seriously cross the line on the settlement at some point.

 

[30seconds]

So the next leg of major growth will be moving from 4.5k to 7k / week production - let’s say over a 12 month period. That significant, maybe 35% growth (assuming ASP reduces).

Then Model Y in mid 2020, but significant growth will need China to be coming on line about then.

Possible? Likely?

 

[KarenRei]

Trumpitis?

"Inflamation of the Trump"? Sounds painful...

Wait, isn't he already inflamed?

 

[avoigt]

Where you are going wrong is comparing free supercharging to the cost of gas. That is totally wrong. You need to compare the cost of free supercharging to the cost of paid charging (super or otherwise). It dramatically changes the numbers.

Well, In my Situationen I am about to purchase a Tesla with or without free spercharging.

So in Order to answer the question raised if it’s worth it for me and conning from a gas car It’s a comparison of before and after in my situation not the one of Fred or anybody else.

You may talk here about a very different Szenario of yourself or someone else that I did not try even to answer.In fact I do not have the data to do that.

No offence but you relate my answer to a question that does not apply in my example.

But still thanks for you reply as it makes obvious where the confusion is coming from.

Alex

 

[Sparky4life]

Nissan makes their own motors too. Leaf has been quite efficient compared to S.

But where Tesla leads is performance. This is why Infiniti never made an EV (though they kept talking about it from 2013).

This is why I think premium OEMs are at more of risk than mainstream.

But the S is a heavier car. I've been driving a LEAF since 2011 and I was averaging 4.2 miles/kWh by driving 60 mph and hypermiling. I'm averaging 4.5 in my Model 3 RWD driving faster albeit still practicing hypermiling techniques (old habits die hard)

 

[sdtslafan]

B

Given that Elon's refund tweet will likely mean Tesla losing about $50M+, and therefore seems to be significant company related information, shouldn't he have screened that through Tesla first? It seems like it was a pretty impulsive decision and tweet by Elon. I thought his settlement with the SEC involved avoiding such impulsive tweets. I highly doubt there would be any action taken by the SEC on it, but it's an indication that Elon is pretty much going to continue to decide and tweet what he wants to regarding Tesla. Makes me wonder if he may seriously cross the line on the settlement at some point.

My guess is that he has over $50 million in ZEV credits that can put this thing to rest without impacting Q 4 profitability. But can someone much smarter than me chime in?

 

[avoigt]

Sorry, couldn't resist...

How come you don't charge at home? In an apartment where it's not possible...

Many Appartments in Europe don’t allow you to charge at home. That’s not surprising is it?

 

[Reciprocity]

FTFY - I'd expect 2019 to be high growth again.

Also, 20%+ cash generation rate (30%+ for their mature products like the S/X) provides more than enough capital to grow.

Tesla's main problem, going forward, is to not grow too fast.

People are sleeping on TE as well. Room for $2-3B with 30% GM. Interestingly, because both share gigafactory, increased production of TE could help on the deprecation and amortizing of shared tech which could add to margins for automotive. Also a sleeper for next year, a refresh of model S/X to include 2170 which will help as well. This could removed the supply constraints on those vehicles combined with a $5k price drop could juice sales nicely while cost savings from 2170 will help maintaining margins. With competition coming, Tesla is going to embarrass them with 120KWh pack and 400mi EPA range and 2c+ 250KW supercharging. This will have a S120D charge 250 miles in the same time as a Taycant, but that will be a full charge for the Taycant and the S will be able to add another 100mi range in 15 minutes. PM motors and those super efficient inverters from the model 3 will help range as well. Also good Autobahn performance.

That's the problem with trying to compete with Tesla's 5 year old tech.

 

[hacer]

Well, In my Situationen I am about to purchase a Tesla with or without free spercharging.

So in Order to answer the question raised if it’s worth it for me and conning from a gas car It’s a comparison of before and after in my situation not the one of Fred or anybody else.

You may talk here about a very different Szenario of yourself or someone else that I did not try even to answer.In fact I do not have the data to do that.

No offence but you relate my answer to a question that does not apply in my example.

But still thanks for you reply as it makes obvious where the confusion is coming from.

Alex

Your first post on the topic TSLA Market Action: 2018 Investor Roundtable was responding to a twitter comment from a P3D buyer who is characterizing the value of free supercharging compared to PUP cost. Thus already owning a Tesla which can't operate on gasoline. So you did respond to someone else seeming to access the value of free supercharging. Even in your own case (considering a Tesla purchase), if free supercharging were an option you could choose at price X, your comparison is faulty because the value of the option is related to the difference between what you would pay to charge the tesla vs. charging for free. As an aside I don't think Tesla should refund any of those whiners, least of all Fred. They deserve nothing, not even sympathy. Next we'll see people bitching about the stock price changed after only a few hours and they should get refunds.