It has just become available, if you look around...
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It has just become available, if you look around...
WOW!!! Why couldn't they show that little featurette at the end of the show? Far more enlightening than the feature. Damn am I impressed by Elon!
I read some funds that’s shorting TSLA are net long, means they took the money from selling TSLA to invest in other stocks.Uh... huh?
Do you mean for someone holding a long position on margin?
That's not allowed in a retirement account in Canada (nor any short position whatsoever). So I don't know what you're talking about.
Cheers!
For example they could have short positions worth 90% of their own fund and investing 190% in others.
Likely they are not doing well no matter what other stocks they picked.
mltv
Member
Possibly true. Assume TSLA shorters also long macro stocks. Macro stock goes down in value could cause massive margin call on TSLA.
Carl Raymond
Active Member
Strikes me that everything Tesla make with cells from GF1 is highly profitable. At the end of Q3 they had 7 lines and made 300 million profit. At a time when they had 6 lines they made no profit. So let's assign that quarter a TKAF (tesla kick ass factor) of 1, or lines minus 6.
In Q4 the lines goes up steadily to 10, say an average of 8.5, so a TKAF of 2.5.
Q1 next year will start with 10 lines, for a TKAF of at least 4.
Over time competitors will arrive and eventually they will squeeze Tesla's margins. Also over time, those lines will get faster and produce more cells per line, so like any good rule of thumb the TKAF is self balancing.
Edit: Note that eventually GF1 will have 77 lines, so the target TKAF provided by that GF alone is 71. Of course by then other GFs will be coming on line.
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True, but a margin call is a margin call, not on any one stock. You just have to do something to recapitalize your account. You can find money from somewhere else to deposit into the account, or you can sell long stock or options. Closing a short position in TSLA does almost nothing to help; there is a kind of hold on the margin account for 102% of the stock value, so closing the short position gives you back only 2% of the total stock value. This is why short squeezes are so bad for the shorts. They pretty much have to sell anything else.
Yes. Of course, everything else Elon has said about the truck implies this as well.
That's extremely hard to do. It's not just the cost of raw billet metal that matters, it's the total manufactured cost. And here's where the big open question comes: how cheaply can Tesla process titanium alloys in mass production? A tonne of titanium "only" costs about $17k, but that's raw billets, not BIWs.
Same reason I was bullish about Q3: it's thesis-busting. Which is where meaningful market movements come from. The current bear thesis is that Q3 was a one-time engineered profit. Q4 will put the lie to that.
That doesn't mean I'm not open for the possibility of no gain, or a drop; I have a full spread of possibilities (even $0!), and my purchases are designed to maximize the probability-weighted gains, not just the most optimistic scenarios. Right now I have a mix of stock, $250 and $330 calls, although this mix will surely change by the time of the Q4 report. So I'm certainly not "YOLO"ing anything.
But I am seeking to maximize my profit based around my thesis.
Causalien
Prime 8 ball Oracle
I personally was surprised about how bad the first two automated line was. The tent that saved everything was even more surprising. The shorts could've been proven right if not for the existence of the tent.
A great personal lesson in my future endaevors too. No matter how brilliant and hard working your team is, design your manufacturing by only automating the heavy repetitive parts first. The slowly replace humans later with machines.
Fact Checking
Well-Known Member
I disagree significantly with your list of downsides, and I believe you left out a large number of potential upsides, which are IMO much larger than the potential downsides. To what extent the downsides and upsides materialize is uncertain.
Here's where I disagree with your downsides:
- While Model 3 ASP is down by only about $2.5k according to the Troy tracker, but the 'options mix' improved in favor of higher margin options, such as AutoPilot which has near 100% margins.
- Introduction of Medium Range potentially improves margins: people can spend more on higher margin options instead of being forced to spend on battery cells which is one of the lowest margin options.
- Model S/X ASP actually increased in Q4 so far according to the Troy tracker, within the limitations of that survey. This would be natural if higher priced Model 3 sales are replacing lower end Model S/X sales, which would push both ASP and margins higher, while keeping sales constant.
Downsides for Q4:
- Debt repayment downside: the -$230m notes repaid in November, compared to -$82.5m in Q3, i.e. -$147.5m more cash outflow than in Q3.
- Tariffs downside: impact of tariffs should be around the -$50m mentioned in the 10-Q guidance.
- Sales, General and Administrative downside: 'Slightly higher' SGA guided. If this means +5% then that's -$50m.
- Model 3 ASP downside: lower Model3 ASP by $2-3k, with the caveats above that could actually improve margins, plus the deliveries upside further below.
- The SEC fee downside: -$20m present on the income sheet, counter-balanced by the shares purchase of Elon on the cash flows sheet.
- Ramp-up leverage upsides: there could be 10k more deliveries in Q4 than Q3 (65k instead of 55k), which might not sound much, but there's a significant leverage effect of distributing fixed costs over +20% more units. This could add a couple of percentage points to Model 3 margins, which will increase income and cash generated. The impact could be in the +$50m income and cash generation range, relative to Q3.
- ZEV upsides: Tesla's seasonal pattern for ZEV credits is to sell them all in Q4. If they continue that pattern then they might have up to $400m-$600m in unsold ZEV credits in 2018. They have sold $100m so far in 2018, and in 2017 they have sold about $300m. So the two trajectories are:
- limited ZEV market: if the ZEV market has a fixed size they could sell +$200m this year.
- flexible ZEV market: but in 2018 Tesla generated twice as many ZEV credits due to selling over 100k Model 3's, so if the ZEV market can accept some growth and Tesla offers them a good deal they could sell up to +$500m. All of these would be pure cash income with a 100% margin.
- Potential deliveries and inventory upsides: cyclically Tesla has managed to reach the lowest inventory levels in Q4, which is due to the seasonality of production: a big chunk of the Fremont factory and of the Gigafactory workforce will be on holiday:
- This could mean even lower Model 3 inventory levels than in Q3, and a deliveries upside of around +5-6k units - which has a revenue upside of around +$300m and an income upside of $60-70m.
- Lower end of year inventory could have an additional cash flow and working capital improvement effect of around +$100m.
- Deferred revenue recognition upsides: Tesla has a significant portion of past AutoPilot income stored as deferred revenue, recognition contingent on delivery milestones of significant AutoPilot features. In Q3 Tesla did not deliver an AutoPilot milestone, but they did so in Q4 with a major upgrade. I expect them to recognize deferred revenue for the whole fleet of 300k vehicles for which they have deferred revenue. This could easily be in the $200m-$300m range.
- Efficiency and margin improvement upsides: as the Model 3 workforce gets more experienced, hours of work and re-work per unit will continue to decrease. Reported efficiency increases that were reported by Tesla to have been reached in August (the middle of Q3) will benefit the whole Q4 reporting period.
- Restructuring related cash flow upsides: restructuring costs burdened Q2 and Q3 cash flow, but probably won't burden Q4 - while the efficiency improvements and savings will still be there largely, despite increased hiring levels.
- Potential reduction in capex levels: while we don't know the exact depreciation and amortization schedule of Tesla, but by now all Model 3 related capex was present on the Q3 income sheet and there's no significant increase expected due to the capex freeze enacted in Q1. It's possible that some major past capex schedules of past Model S/X related expansion are now timing out, reducing overall capex portion of the income sheet and improving income.
- Q3 end of quarter receivables artifact upside: there was a bump up in receivables due to cash check clearing delays over the end of Q3 which fell on a weekend. This effect won't be there in Q4 and the Q3 outstanding cash flow will improve Q4 levels to the tune of $100m-$200m.
- Potential stock compensation upsides: Q4 is the first quarter with a significant number of executives and white collar workers not on the payrolls, i.e. there's a lack of vesting. While there's a lot of new hires, the vesting plans usually do not activate for about 12 months. So there could be a brief 'pause' or even drop in stock compensation expenses - which would improve GAAP income. Furthermore, Tesla employees might be less inclined to actually exercise stock options after Q3 despite the higher stock price, seeing the very real potential of much higher stock prices in the future.
- Potential payables upsides: suppliers might be less worried about Tesla's payables debt towards them after increasing cash levels significantly in Q3, and might have been more willing to allow Tesla to expand payables in Q4. In Q3 there was a remarkable lack of expansion in payables, despite significant increase in production - so there's room to grow there and there would be cash flow benefits from that.
- Tesla Storage/Energy upsides: these business units were in hibernation in Q1, Q2 and Q3 due to the chronic shortage of 2170 cells which were all used for Model 3 battery packs. Now that Panasonic has expanded cell production significantly end of Q3 and during Q4 as well, there's probably an uptick in storage sales and deliveries. New product iterations were released. While solar sales would be seasonally low, with the onset of winter, storage margins could also further improve as the 2170 mix improves.
In any case, due to these factors I'd not be surprised to see all key business wide financial metrics to improve in Q4.
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About the 60 minutes interview:
I could not watch the full version here in Europe just the different short videos and the kind of summary from CBS but believe that seems to be most of the content.
My assessment is that because there has not really been any fundamental news in it and all statements he made have either been made already before or have been well expressed there is nothing in it I could see be used against Tesla and Elon really.
It is a bid like a summary of many points he made over the course of time and no news is in the situation we are in good news.
60 minutes was kind of doing what the media always does which is to try to create a story people will listen to and that is fine and to be expected. Some of the questions and how they portrait him and Tesla has been not justified e.g. accident rate, 35k Model, erratic, but thats to be expected with every interview.
Here are some highlights:
No new is good news and a lot of potential new Tesla investors may listen and say "well they did bad but now they are out of the woods and some of them will agree that the SEC is not necessarily an authority many people respect but the jurisdiction definitely should be."
Good one.
I could not watch the full version here in Europe just the different short videos and the kind of summary from CBS but believe that seems to be most of the content.
My assessment is that because there has not really been any fundamental news in it and all statements he made have either been made already before or have been well expressed there is nothing in it I could see be used against Tesla and Elon really.
It is a bid like a summary of many points he made over the course of time and no news is in the situation we are in good news.
60 minutes was kind of doing what the media always does which is to try to create a story people will listen to and that is fine and to be expected. Some of the questions and how they portrait him and Tesla has been not justified e.g. accident rate, 35k Model, erratic, but thats to be expected with every interview.
Here are some highlights:
- Working days in Fremont not getting out to show the workers that he suffers even more through that period. As a true leader and manager you need to earn the appreciation of your worker on the line to create acceptance and be a role model that you are one of them to make them work harder for you. This is just brilliant and I can not agree more to his sacrifice and approach. Think about how many CEOs you know that would do the same
- Anger about Unions, SEC, big Oil and media: thats a fair point to make and most people will now as Tesla is on the succeeding path agree that all of that has been not always fair. If Tesla would not be in success mode today most people would say the critics are right.
- Quote: "At that time I thought we most lily will fail" (...) "today I think we most likely will succeed "
No new is good news and a lot of potential new Tesla investors may listen and say "well they did bad but now they are out of the woods and some of them will agree that the SEC is not necessarily an authority many people respect but the jurisdiction definitely should be."
Good one.
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Artful Dodger
"Neko no me"
TSLA Open Interest (Dec 14, 2018)
- Highest Put Strike: 310.0
- Highest Put Open Interest: 5075
- Highest Call Strike: 380.0
- Highest Call Open Interest: 5119
Again, question your sources (unless you're just being dishonest).
I was there, with thousands others. There were placard placards everywhere. All most all yellow vests have explicit political messages written all over them.
Here's the first page of Google Images results for "gillets jaunes" ("yellow vests", literally):
cheshire cat
Member
This discussion is all very well but does not alter Rob' s original point, re:a factory. Still does not make him incorrect. In fact why would it be anywhere in Euro zone when they have no accounts signed off in 20+ years, are printing 15 billion Euros a month and Greece is ready for another bail out + Italian banks built on sand. I'm sure FC will correct my rough maths, As Jed Clampet ( my favourite philosopher ) once said " all them zeros ain't worth nothin'. "
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On medium volume... It bodes well, but doesn't point to a big opening in my experience.
But... $TSLA...
If you like Elon, you can spot the FUD and biased editing. If you don’t like Elon, you take the reporting at face value.
Hogfighter
Professional Lurker
This interview was better than the hit piece that was aired on 60 minutes.
X Fan
Active Member
Going to be an interesting trading day.
Japanese markets were down in large part due to GDP contraction and global worries.
Japanese markets were down in large part due to GDP contraction and global worries.
Overall pretty good but why did the guy have to say that at the end about Tesla? So much for unbiased reporting.
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