TSLA Market Action: 2018 Investor Roundtable

[Dennisj00]

Re: Elon and Tim, I’ve never considered this a good marriage, but there may be some synergy. An interesting datapoint- what’s the ratio of lightening cables vs. android in Tesla’s. A 50 cent cable but possibly very telling possibility.

Investment from Apple, Apple Music on the consoles, Genius Bar/stores at larger Superchargers, Apple Music on Starlink?

I’m sure there are other synergies without mixing the fundamental business cores.

 

[gene]

Elon Musk warns people betting against Tesla of a ‘next level short burn of the century’

Many of the people making comments may be from this thread. Others would be so very welcome. Take a look, many o fthe comments are very well stated.

 

[TradingInvest]

I start to feel more and more about Elon's action yesterday in CC was a perfect storm for a EPIC short squeeze, damn bear trap.

The QR info was pretty positive, that shows Elon wasn't trying to trap any bears. The bears asked for it during the CC. They are trapped, they can't blame Elon. They still had time to get out today, maybe even next few weeks. But they are determined to sit in the trap.

 

[Curt Renz]

Interesting times ahead

https://www.s3partners.net/Research/TSLA13.php

Thanks for sharing that.

The short sellers have been in a maximum frenzy lately, with TV appearances, a live audience speech and written articles by their most notorious gang leaders. In the past that often created a price bottom. The saturation media coverage of Elon's demeanor in the conference call appeared to have emboldened the shorts on Thursday morning. Of course the smart ones would have covered right at that time. Joining the shorts in selling yesterday would likely have been many weak longs for whom Elon may have provided second thoughts. In fact he told them to get out if they couldn't take the heat.

Now that the shorts are fully loaded and the weakest longs appear to have left, the setup could be in place for massive short covering. Meanwhile a buying wave might already have begun by potentially strong longs who were waiting for a dip and evidence that a bottom has been put in place. More and more bargain hunters could step up to the plate in the coming days, including institutions. Next week should indeed be quite interesting.

 

[rallykeeper]

Yep, always has been! Well, it's one of two.

There's basically two pay models in Wall Street:
(1) paid by the amount of money you bring into your firm (paid by size of assets under management). The "empire building" payment scheme. Return on assets == irrelevant
(2) paid by the amount of churn they generate (fees for activity, advice, research, etc). Return on assets == irrelevant

These are the fundamental business models for paying people at investment banks and brokerages. The only real exceptions are people who work for private foundations or HNW individuals directly.

The fact is that portfolio managers are usually in business #1, empire building. Churning the contents of their portfolio, however, is a way of drumming up sales. Increase your portfolio's volatility enough and you are more likely to get a lucky quarter or two, which allows you to drum up sales.

In addition, and perhaps more importantly, trading looks like you're "doing something", which also drums up business and justifies your salary.

A portfolio manager who made no trades for a quarter and just hung out on the beach... even if he was the best portfolio manager ever as judged by rate of return, do you think his banker/brokerage bosses would be happy with him? No!

Neroden

I almost always agree with you, but I think you're being a little unfair to active asset managers here -- who would also strenuously disagree with your characterization of them as part of Wall Street. Agreed that financial advisers think this way -- and compensation is aligned accordingly.

In my experience, most fund portfolio managers are not incentivized by churn. If anything, high turnover is viewed as a red flag in many fund families -- and by many professional buyers of funds.

 

[TradingInvest]

Thanks for sharing that.

The short sellers have been in a maximum frenzy lately, with TV appearances, a live audience speech and written articles by their most notorious gang leaders. In the past that often created a price bottom. The saturation media coverage of Elon's demeanor in the conference call appeared to have emboldened the shorts on Thursday morning. Of course the smart ones would have covered right at that time. Joining the shorts in selling yesterday would likely have been many weak longs for whom Elon may have provided second thoughts. In fact he told them to get out if they couldn't take the heat.

Now that the shorts are fully loaded and the weakest longs appear to have left, the setup could be in place for massive short covering. Meanwhile a buying wave might already have begun by potentially strong longs who were waiting for a dip and evidence that a bottom has been put in place. More and more bargain hunters could step up to the plate in the coming days, including institutions. Next week should indeed be quite interesting.

You described it perfectly. Weak longs are gone. Strong longs adding shares. Shorts set themselves up for the burn of the century. They can beg for my shares in 15 years, I probably won't sell even then.

 

[Anstandswauwau]

Say, if Tencent is snagging another cool 10-20% of TSLA ("These are really big numbers.") which translates into 5-10B or 16-33M shares, would anyone think that this alone would force a short squeeze?

Or would an additional catalyst (something like Chinese GF announcement + double projected M3 production rate) be needed?

Also, "a next level" "short burn of the century" implies a higher squeeze than the infamous one from the Volkswagen share at 5x within two days, which would catapult TSLA to roughly $1500. Does anyone think this is even remotely possible? I mean, the circumstances of the VW squeeze were very special after all.

 

[Johann Koeber]

A large buyer would not want to influence the market too much, as he would be paying higher prices for the shares. So he would spread his buying over time to avoid a squeeze.

Additional catalysts would create additional upward pressure.

I do not expect an explosion type short squeeze in the matter of just a few days.

Look at the TSLA chart from 2013:

Rather something like a gradual squeeze like the one starting in April 2013. There are many different shorts out there and they will bail at different points.

 

[brian45011]

I would add that that in Q1 customer deposits grew to $985M, up 15.3% over prior quarter. Clearly demand is very strong and growing. The $131M increase is the equivalent of 131k incremental Model 3 reservations or 262k Powerwall reservations.

Isn't Tesla's policy that payment in full is required before a vehicle is delivered? Shouldn't most, if not all, of the increase in cars-in-transit from Q4 to Q1 be taken into consideration before attributing the deposit balance increase to new reservations?

"4,060 Model S and X vehicles were in transit to customers at the end of Q1, which was 68% higher than at the end of Q4 2017. An additional 2,040 Model 3 vehicles were also in transit to customers."​

"In addition to Q4 deliveries, about 2,520 Model S and X vehicles and 860 Model 3 vehicles were in transit to customers at the end of the quarter."
​

1,540 more S & X in transit with an ASP of ~$100,000 would be about $154 MM. 1,180 more M3s in transit with an ASP of ~$55,000 would be about $65 MM or a total deposit balance increase of $220 MM

​

 

[vinvin218]

California to become first U.S. state mandating Solar on new homes vincent on Twitter

 

[Cartegena]

Your error comes in the "eek out" part. Your numbers are low, particularly for Q4.

It would be helpful to put some quantitative context to the expectations of: " Expecting positive GAAP net income and positive cash flow in Q3 and Q4 2018...If we execute according to our plans, we will at least achieve positive net income excluding non-cash stock based compensation in Q3 and Q4 and we expect to also achieve full GAAP profitability in each of these quarters."

For each of Q3 and Q4, can you share how much

-Non-GAAP Net Income
-GAAP Net Income
-Cash from Operations
-Free Cash Flow (ie after CapEX)​

you (and anybody else) expect?

Maybe Value Analyst can structure a poll

 

[Cartegena]

. He probably has access to a real time look at the short interest...

How?

 

[SteveG3]

Elon going strong on twitter again. He tweeted an article recapping the S3 Partners analysis about the dwindling number of shares available to short that's being discussed here tonight. In the tweet with a link to the article, this comment,

"Looks like sooner than expected. The sheer magnitude of short carnage will be unreal. If you’re short, I suggest tiptoeing quietly to the exit …"

as a response to his tweet this morning,

"Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time."

 

[mongo]

Isn't Tesla's policy that payment in full is required before a vehicle is delivered?

Possibly for home delivery. But people do not (typically) provide payment until the day of delivery. In transit cars only have initial deposits on them.

 

[mongo]

Elon going strong on twitter again. He tweeted an article recapping the dwindling number of shares available to short that's being discussed here tonight, along with this comment,

"Looks like sooner than expected. The sheer magnitude of short carnage will be unreal. If you’re short, I suggest tiptoeing quietly to the exit …"

Nah, loudly slam the door after covering and going long. (Tip toeing makes sense if you have a laaaarrrrgggggeeee weight around your neck)

 

[Cartegena]

The A Team from GF1 goes to China and gets GF3 started, then comes back to the States after 8 months and starts building GF4 after land prep is done...

Can they just stay in Nevada and complete the remaining 70% of GF-1 before applying for passports and visas?

 

[Tenable]

Elon on twitter:

Looks like sooner than expected. The sheer magnitude of short carnage will be unreal. If you’re short, I suggest tiptoeing quietly to the exit …

Twitter

I'm starting to get excited.

 

[mongo]

Can they just stay in Nevada and complete the remaining 70% of GF-1 before applying for passports and visas?

My thinking is that the group that has the best/ core knowledge lays the groundwork and gets the first sections built. Then there is the next level of people that trained under the A team who can take it from there. So GF1 keeps going with that team, and they rotate as progress happens.

 

[tinm]

I'm a TSLA long since 2012, happily patient until the company's worth a half a trillion or more.

Still, I just placed sell orders for all my TSLA shares. Good Til Canceled, limit price of $5000.00

I don't know if it locks up my shares from being messed with by shorts, but even if it doesn't, it feels good to think it will.

 

[Navin]

I did the same. Great idea. Hope it keeps folks from shorting my shares.