TSLA Market Action: 2018 Investor Roundtable

[viridi]

And the bear attack continues. Jefferies analyst, Philippe Houchois, out with a negative note (sorry for the link that might require a subscription): Tesla: Musk’s Pay Package Might Not Be the Good News the Market Thinks It Is

 

[bdy0627]

Let's be honest, $TSLA could drop to $3 and he'd still live a life of abject luxury...

Pre-Market up nicely, but then again, look what hapenned yesterday.

I think premarket is often up due to shorts covering to reload in preparation for the day's battle.

 

[Starno]

Tesla - Amended Statement of Beneficial Ownership

 

[mongo]

Tesla - Amended Statement of Beneficial Ownership

A drop of around 390k shares since Feb 2017.

 

[Bobbyducati]

quite the back and forth today. great to see some strong resistance.

 

[avoigt]

When we look at the past 7-8 months, 350 seems to be act like a magnet. No matter which side the SP goes, it tends to get back to this level.

I consider it as healthy that we stop here for a few days:

Since 306 (higher low) the stock went almost without breathing up. Also we have seen a higher high yesterday that is bullish. At 352 we have the 61% retracement so that is a support as well as resistance.

Finally shorts are doing a fine job so far to keep us below 352.

Nothing to worry IMHO other than a confirmation of moving further up soon.

 

[bdy0627]

TSLA's drop isn't surprising given the overall market drop.

 

[MitchJi]

175 billion in revenues is about 4 million cars at an average of 44k ASP.

If the gigafactory is fully utilized for just car batteries, it should be able to supply about 1.3 million cars per year. Give or take.

So the comp plan assumes 3 gigafactory equivalent of cars in 10 years.

I’ve been wondering if the delayed announcements are because their waiting for the Goodenaugh cells to come to fruition. The energy density is supposed to be 2-3x of conventional cells which should mean that the production would be at,least 2-3x.

Of course there will be more gigafactories, for TE, etc., But I was expecting in 10 years, Tesla should be producing north of 5 million of cars, with a big stationary energy, solar and ride-sharing business.

I am underwhelmed with the operational goalposts here.

How is that possibly a negative?

Do you think that Elon will shoot for lower goals to hit his incentives? I believe that the key for the SP is believable goals. If starts to hit the goals or better yet exceed them the SP might start to reflect those goals before they happen.

 

[MitchJi]

You probably can imagine what that has me wondering, lols.

No I can’t. I just found out that our plan (Lynne’s plan) is to either wait for a week or so or to wait for the low $340’s. Seemed crazy yesterday, today not so much.

 

[Off Shore]

Still scratching my head on the increased shorting, what on Earth are these people thinking? Do they really still see Tesla as a bubble and expect and imminent collapse? Are they waiting for Q1ER - never seemed to change a great deal in my experience. Are they trying to hang-on until another manufacturer comes with a real competitor and volume? Waiting for that asteroid strike on GF?

I don't get it, they're literally losing billions to stop the SP from rising, but for what?

I believe it's important to seriously consider the possibility that a portion of the shorts have no interest in making money and indeed are willing to spend (lose) significant money, simply to suppress the stock price of the only "serious" EV maker on the scene. Call it the "Chuck and Dave Show" if you like.

 

[Tslynk67]

I believe it's important to seriously consider the possibility that a portion of the shorts have no interest in making money and indeed are willing to spend (lose) significant money, simply to suppress the stock price of the only "serious" EV maker on the scene. Call it the "Chuck and Dave Show" if you like.

Indeed, it's the only logical conclusion one can arrive at.

As for today, macro's bad and this "AP crash" is everywhere in the press...

 

[EinSV]

How is that possibly a negative?

Do you think that Elon will shoot for lower goals to hit his incentives? I believe that the key for the SP is believable goals. If starts to hit the goals or better yet exceed them the SP might start to reflect those goals before they happen.

The more I think about it the more I like the revenue and EBITDA targets in Elon’s option plan precisely because they incentivize a high price/sales and P/E ratio even at a $650B market cap.

As Tesla grows, I would love for Tesla to remain as innovative and long-term focused as it is now. If it has $175B in revenues and a $700 B market cap (a 4/1 P/S ratio) that means it has compelling plans and products in the pipeline and the market is pricing in future growth.

In contrast, requiring very high revenues and/or profits relative to market cap would incentivize short-term thinking — milking existing products rather than making big bets on future growth.

If Tesla is still a hypergrowth juggernaut with high P/S and P/E ratios when it hits $650B market cap that would be fantastic IMO.

 

[MitchJi]

I created a public google spreadsheet to try to figure out how much this stock incentive plan is ultimately worth to Elon.
Tesla CEO stock incentive plan 2018

It's public and I made it editable by anyone.

I'm needing help to double check my numbers and also to figure out what exactly is Elon's tax rate when he exercises these options. (maybe look at his past exercises?)

In my opinion Tesla should pay Elon whatever he wants. It exactly like Lebron James and Cleveland.

For impacting the SP lower is better because it’s more believable.

In contrast, requiring very high revenues and/or profits relative to market cap would incentivize short-term thinking — milking existing products rather than making big bets on future growth.

That could be their reasoning but do you think that Elon’s behavior will be influenced by the incentives or the mission statement.

 

[Zhelko Dimic]

I believe it's important to seriously consider the possibility that a portion of the shorts have no interest in making money and indeed are willing to spend (lose) significant money, simply to suppress the stock price of the only "serious" EV maker on the scene. Call it the "Chuck and Dave Show" if you like.

Portion of shorts, yes.

But there are plenty enough people that can't see past their own experience, and their experience is telling them that finances are the only important thing. They can't deal and understand outlier that Tesla is, and are equating it to all failed companies that have/had finances similar to Tesla. They can't or won't understand that Tesla finances are intentional, delicate balance in maximizing growth while running cash flow negative, as close to the line that market will bear.

Tesla, (by necessity) has chosen to appeal to subset of investors, and this bulls/bears balance is what keeps price in check. In some ways, if price explodes too quickly will mean that Tesla got it wrong and has missed opportunity to invest more aggressively (burn more)

It's a tricky job, as people at Tesla need to plan budgets 12-24 months in advance, and execute on hiring months in advance without knowing market sentiments ahead.

BTW, I see Elon's compensation plan as a tool to communicate to investors, but primarily employees. I was lucky enough to be part of the startup that did well, I mean it paid my mortgage etc. But eventually, I cashed in on only some 15% of potential reward available by selling too early (in waves, over couple years). And part of that is because I wasn't sure where management head and expectation was. This way, Elon says very clearly to his employees: stick around with me and don't sell too early. That's really, really powerful and cool.

 

[kbM3]

The more I think about it the more I like the revenue and EBITDA targets in Elon’s option plan precisely because they incentivize a high price/sales and P/E ratio even at a $650B market cap.

As Tesla grows, I would love for Tesla to remain as innovative and long-term focused as it is now. If it has $175B in revenues and a $700 B market cap (a 4/1 P/S ratio) that means it has compelling plans and products in the pipeline and the market is pricing in future growth.

In contrast, requiring very high revenues and/or profits relative to market cap would incentivize short-term thinking — milking existing products rather than making big bets on future growth.

If Tesla is still a hypergrowth juggernaut with high P/S and P/E ratios when it hits $650B market cap that would be fantastic IMO.

This was exact what was said today in:

TechCast Daily – Podcasts covering tech — currently Tesla, Inc

 

[Starno]

And an other sad day.

 

[Starno]

The more I think about it the more I like the revenue and EBITDA targets in Elon’s option plan precisely because they incentivize a high price/sales and P/E ratio even at a $650B market cap.

As Tesla grows, I would love for Tesla to remain as innovative and long-term focused as it is now. If it has $175B in revenues and a $700 B market cap (a 4/1 P/S ratio) that means it has compelling plans and products in the pipeline and the market is pricing in future growth.

In contrast, requiring very high revenues and/or profits relative to market cap would incentivize short-term thinking — milking existing products rather than making big bets on future growth.

If Tesla is still a hypergrowth juggernaut with high P/S and P/E ratios when it hits $650B market cap that would be fantastic IMO.

I think Tesla will reach 3 trillion dollar market cap in 14-18 years.

 

[Off Shore]

Portion of shorts, yes.

Absolutely agree with the rest of your informative post post. The question I continue to ponder is what portion of the short show is made up by C&D's agents. I believe their presence is significant, and reinforces the effects of the other shorts.

Edit: usual spelling/grammar

 

[Zhelko Dimic]

I agree, stock wants to go up.
But I don't see it making a strong move above ATH until there are _some_ definitive signs M3 production is picking up. Everyone knows we're close, but currently, VIN assignment doesn't reflect 1000 a week. Actually, it feels like production has stalled for couple of weeks, which may be the case with debugging the line. I remember going through this with MX, and I acknowledge that Tesla has prepared us much better for wait this time.

On that note, I sold off 25% of over-allocation (leverage), yesterday at $356. If it goes into $340, I'll add it back, if not, I still have around 115% investment in Tesla. Most risky are Jan '20 $200 strikes, so one can say I'm not very much time sensitive... By design

I reloaded today and then some. Didn't have patience to wait much. I still have fair chunk of cash available for further leveraging if I deem it worthwhile.

 

[Richgoogol]

One step forward two steps back..