TSLA Market Action: 2018 Investor Roundtable

[Wooloomooloo]

Regarding the idea of nefarious shorts, If you haven't read the initial post from @jesselivenomore on the shorts vs Elon thread, I highly recommend it. There appear to be forces at work against TSLA that are not "just" betting it's going down. They are actively trying to get it there. Having said that, much of what you say about shorting undoubtedly applies to many who are shorting TSLA. I appreciate your perspective on Tesla's bonds and what that tells us regarding the market's assessment of Tesla.

I think around 5% of Tesla's shares are in play on a daily basis (just looking at average volumes against outstanding shares) which is a lot compared to other companies with a similar mkt cap. That means there are potentially outsized swings on any given day, but I doubt they have enough influence to actually suppress the price so much that the company's financial stability would be affected. You're looking at 64% or so institutional holdings (higher than Apple) and a billionaire owner/CEO. There is a pretty firm floor for the price at the moment.

What would really put a bullet in Tesla's credibility would be a need for an equity debt raise, when they said that wasn't necessary - or worse, if a Q3 profit which turns into a Q1 2019 loss. Musk pissed off a lot of people with his 'boneheaded question' comment when asked about capital expenditure cuts - how do you develop your new products if you're cutting investment - seems like a fair question and it did seem like a raw nerve had been hit.

In other words, if Musk can convince the banks to raise capital based on expected cashflow (and they believe that it's due to a turnaround, not capital spending cuts) then his comment will be seen as much more than hubris. If not, that could signal a cash flow issue, an equity debt raise, and a significant fall in share price.

 

[Wooloomooloo]

appreciate your post, but, if this were all simply about reasonable skepticism, why would so many with short positions/critics, almost exclusively, present gross distortions of reality and falsehoods,

i.e.,

claiming: losing more money with each additional car sold (many, many shorts/critics), "Tesla killer" over and over and over, for a laughable wide and large array of vehicles out from 2013 to today that have had almost zero impact on Tesla (many, many), the X ramp would bankrupt Tesla (Bob Lutz), saying Tesla would be bankrupt by July 2018 (don't remember the guy's name, but said this on CNBC), worse for environment than ICE (many), heavily implying, if not outright stating, a danger vs. ICE (many, many), near last place in autonomous driving (several), poor workplace safety for an automaker (many), no rational basis for stock price, only reason to be long, cult of Elon believer (many, many), hydrogen fuel cells are the future (many),... I could go on

in other words, if this were simply about skepticism, why not present the skeptical case confidently based on facts and reason, rather than turn to falsehoods and gross distortions? this choice has been very widespread among shorts and has been going on for years.

Because the vast majority of people commenting on this (like most things on the internet) have no idea what the hell they're talking about.

And there are people presenting a skeptical cases based on analysis.

 

[SteveG3]

Because the vast majority of people commenting on this (like most things on the internet) have no idea what the hell they're talking about.

And there are people presenting a skeptical cases based on analysis.

1) there’s a difference between not knowing much on a subject and emphstically presenting falsehoods and gross distortions,

2) I’m referring to people with short positions and other critics appearing on Bloomberg, CNBC, etc., and cited in various articles, not anonymous remarks in comment sections

 

[defc0n]

This china announcment .. .any info/guess on timing?

Well apparently he was just at the Thailand cave and not in China...

 

[Causalien]

You are not thinking like China. Creditor is looking to steal Tesla trade secrets.

Yep... One or two saboteurs in USA by US citizens proves that Tesla is defenseless. Wait till they build a factory in China. The espionage there will be on another level. Most will be government level spies who are undercover as competent grunt workers. It'll be hard to judge if they are brilliant or just government trained.

Plus there will be a us-vs-them attitude. You will not get Chinese citizens voluntarily ratting out their fellow workers for spying, so the defense will rest solely on upper management that Tesla send over.

 

[Wooloomooloo]

1) there’s a difference between not knowing much on a subject and emphstically presenting falsehoods and gross distortions,

2) I’m referring to people with short positions and other critics appearing on Bloomberg, CNBC, etc., and cited in various articles, not anonymous remarks in comment sections

Oh television - the place where money is made through advertising (remind me who spends the most money on advertising again...) and outrageous and distorted commentary attracts eyes which attracts advertisers.

Now that's a conspiracy I can buy... they're full of it, literally. But just because they're full of it, doesn't mean Tesla isn't a very risky bet.

 

[JRP3]

But just because they're full of it, doesn't mean Tesla isn't a very risky bet.

We've been hearing about Tesla being a risky bet for 8 years now...

 

[wipster]

This china announcment .. .any info/guess on timing?

Warped, the only thing I've heard has been said is that Elon is going to be in Thailand tommorow. Any announcement(s) to be made is just conjecture at this point.

 

[holysmoke17]

Well apparently he was just at the Thailand cave and not in China...

Chiang Rai is about a 3.5 hour flight from Shanghai. Some sort of announcement/ceremony before Tuesday open is still very possible.

 

[SteveG3]

Oh television - the place where money is made through advertising (remind me who spends the most money on advertising again...) and outrageous and distorted commentary attracts eyes which attracts advertisers.

Now that's a conspiracy I can buy... they're full of it, literally. But just because they're full of it, doesn't mean Tesla isn't a very risky bet.

Those with shorts and other critics on TV... you agree, it makes sense for it to be heavily about ulterior motives rather than simply intellectually honest skepticism. That’s precisely what many of us have been saying.

The motives are speculative consideration, the falsehoods and gross distortions are obvious to anyone with moderate knowledge of Tesla.

 

[GBleck]

I think around 5% of Tesla's shares are in play on a daily basis (just looking at average volumes against outstanding shares) which is a lot compared to other companies with a similar mkt cap. That means there are potentially outsized swings on any given day, but I doubt they have enough influence to actually suppress the price so much that the company's financial stability would be affected. You're looking at 64% or so institutional holdings (higher than Apple) and a billionaire owner/CEO. There is a pretty firm floor for the price at the moment.

What would really put a bullet in Tesla's credibility would be a need for an equity debt raise, when they said that wasn't necessary - or worse, if a Q3 profit which turns into a Q1 2019 loss. Musk pissed off a lot of people with his 'boneheaded question' comment when asked about capital expenditure cuts - how do you develop your new products if you're cutting investment - seems like a fair question and it did seem like a raw nerve had been hit.

In other words, if Musk can convince the banks to raise capital based on expected cashflow (and they believe that it's due to a turnaround, not capital spending cuts) then his comment will be seen as much more than hubris. If not, that could signal a cash flow issue, an equity debt raise, and a significant fall in share price.

He answered the question as to how you develop new products while keeping capital static. The design and protype team and prototypeing equipment is an ongoing continuos level expense and the material costs for prototypes are negligible. Asked and answered several questions prior.

Antonio M. Sacconaghi - Sanford C. Bernstein & Co. LLC

And so where specifically will you be in terms of capital requirements?

This was the boneheaded question point. Almost every question was capital requirements at that point.

 

[defc0n]

Chiang Rai is about a 3.5 hour flight from Shanghai. Some sort of announcement/ceremony before Tuesday open is still very possible.

I’d definitely lean toward at least one more day to get there and prepare / rest. But we will see.

 

[hacer]

Price-hikes in China due to Trump’s trade-war might negatively impact. We need an official Shanghai announcement ASAP...

Don't worry. Rob promised this won't matter.

 

[bdy0627]

I think around 5% of Tesla's shares are in play on a daily basis (just looking at average volumes against outstanding shares) which is a lot compared to other companies with a similar mkt cap. That means there are potentially outsized swings on any given day, but I doubt they have enough influence to actually suppress the price so much that the company's financial stability would be affected. You're looking at 64% or so institutional holdings (higher than Apple) and a billionaire owner/CEO. There is a pretty firm floor for the price at the moment.

What would really put a bullet in Tesla's credibility would be a need for an equity debt raise, when they said that wasn't necessary - or worse, if a Q3 profit which turns into a Q1 2019 loss. Musk pissed off a lot of people with his 'boneheaded question' comment when asked about capital expenditure cuts - how do you develop your new products if you're cutting investment - seems like a fair question and it did seem like a raw nerve had been hit.

In other words, if Musk can convince the banks to raise capital based on expected cashflow (and they believe that it's due to a turnaround, not capital spending cuts) then his comment will be seen as much more than hubris. If not, that could signal a cash flow issue, an equity debt raise, and a significant fall in share price.

Please take a few minutes to read the first post on this thread:
Elon Musk vs. Short sellers

I'd like to hear your thoughts after you've read it.

 

[dc_h]

Actually she is asking for people that know about a single specific Model 3. (The one that was reported as broken down on the day it was delivered.)

Huh, I don’t understand

She’s getting inundated with teslove.

 

[RobStark]

Gas in Germany is between $6.3-$6.7/gal last 30 days.
I didn't search UK, but if remember correctly, it was worse.

And electricity prices are $.36 per kWh (average retail for residential customers, industrial customers get a break).

Or 3x the US average.

 

[MTL_HABS1909]

I’d definitely lean toward at least one more day to get there and prepare / rest. But we will see.

Since when have we known Elon to rest?!?!?

 

[RobStark]

Don't worry. Rob promised this won't matter.

"Promised" ? Sound like a Tesla bear.

I said trade war with China will not have a significant impact on the US economy.

Didn't say it can't hurt Tesla. If demand for Model S and Model X is as high as many here think then the ~15k or so S/X that would have been purchased by Chinese customers will be purchased by someone else.

I also said it won't significantly impact GM or Ford because over 99% of their Chinese sales are made in China. And their Chinese imports to the USA are negligible to their profits. Ford planned quite a few imports from China in the form of 2019 Focus Active. Those don't have much profit.

 

[scaesare]

What's your explanation for Tesla not having a single quarter of positive net income?

Tesla claims to have industry-leading margins for the S and X, and yet they still can't get positive earnings?

This is the core source of skepticism for the shorts.

Seriously. You aren't even trying.

And by "trying" I mean:

You either aren't trying to find very readily available answers to your questions if they are honest.

-or-

You aren't trying to throw out any decent FUD as the issues are so easily debunked if you are being disingenuous.


Either way, would you please try harder? You are doing a dis-service to one side or the other, and not really providing much entertainment to the other side in return. Or maybe sit on the sidelines for a while and learn how it's done...

 

[Esme Es Mejor]

What's your explanation for Tesla not having a single quarter of positive net income?

What’s your explanation for Chanos covering his short?