TSLA Market Action: 2018 Investor Roundtable

[YasB]

But really will a new plant in China be that expensive anyway? I doubt it would be much more than a billion, and they could spread that out over a few years.

For 500k production capacity and battery production in a relatively expensive location it should be 5 billion or more.

 

[ValueAnalyst]

So what are you saying is the limiting factor, Elon can’t multitask enough so he doesn’t want to do everything at once?

Executive focus is certainly one. He has also named labor pool as one, with which I definitely agree given the historically low unemployment and underemployment rate. Another is the speed at which governments approve Gigafactories; see how long China took. Another is the speed at which utilities sanction energy storage projects; often 12+ months. Another is supply chain capacity/ramp. Another is barnacles upon barnacles. This list just goes on. None of these can be solved by simply throwing borrowed funds at 3%.

 

[ValueAnalyst]

For 500k production capacity and battery production in a relatively expensive location it should be 5 billion or more.

Did they say it will produce energy storage? Can you provide source?

 

[ValueAnalyst]

It’s complicated because I don’t think most of us agree with your analysis:

1. SpaceX can’t easily provide $1B to Tesla, do you know what kind of money they need to achieve their goals.

2. Tesla isn’t generating $4B annualized profit as of July. You’re uber optimist financial/future projections aren’t believed by most of us here.

3. Elon said he didn’t want to raise capital for different reasons than you’re assuming.

My view/opinion is he wants to get a lot of the haters off his back by showing profit. This is totally different from not being able to utilize additional capital if it didn’t mean he had to continue to rely on the snake pit of Wall Street.

Seriously, just like SpaceX Tesla has HUGE goals. If $10B was handed to him he’d advance those goals with it. I think he is sacrificing the mission right now to shut up the burning cash trolls, because it has spread like cancer.

SpaceX isn’t building BFR’s tomorrow and Elon didn’t list the reasons why he doesn’t want to raise capital, so you can’t say whether or not they are different than what I laid out.

 

[Esme Es Mejor]

My view/opinion is he wants to get a lot of the haters off his back by showing profit. This is totally different from not being able to utilize additional capital if it didn’t mean he had to continue to rely on the snake pit of Wall Street.

Seriously, just like SpaceX Tesla has HUGE goals. If $10B was handed to him he’d advance those goals with it. I think he is sacrificing the mission right now to shut up the burning cash trolls, because it has spread like cancer.

$28 billion is a lot more than $10 billion. Interestingly, Ford is being hammered for being weak on electrification and autonomous driving, and for having way too much cash on hand w/out enough innovative ideas to spend it on. Meanwhile, Tesla is the leader in EVs, among the leaders in autonomous driving, but is hammered for not having enough cash to fund all its innovative goals.

If only there were some way for the company with the larger market cap to acquire the smaller one...

Ford's $28 billion cash pile doesn't buy love on Wall Street

 

[oneday]

Executive focus is certainly one. He has also named labor pool as one, with which I definitely agree given the historically low unemployment and underemployment rate. Another is the speed at which governments approve Gigafactories; see how long China took. Another is the speed at which utilities sanction energy storage projects; often 12+ months. Another is supply chain capacity/ramp. Another is barnacles upon barnacles. This list just goes on. None of these can be solved by simply throwing borrowed funds at 3%.

Well, we’re going to have to agree to disagree because all of those things can be fixed with $.

Except for government approvals... But those can certainly be sped up with $$.

Elon has many talents, one of them is spending money. And he is better at it than anyone alive today, except for my fiancé, but his align more with humanity goals. Hence why a lot of us invest.

 

[MilosK]

I don't know if this makes any sense, but I had a crazy thought. How many TSLA shares are outstanding? What if Elon is in Beijing to sign a deal with Tencent where they announce that TC has been slowly buying up or will buy a good amount of outstanding shares to provide financing for GF3. Now THAT could be the short burn!

Maybe not TC seeing as their HQ is not in Beijing, but maybe someone else?

 

[ValueAnalyst]

Well, we’re going to have to agree to disagree because all of those things can be fixed with $.

Except for government approvals... But those can certainly be sped up with $$.

Elon has many talents, one of them is spending money. And he is better at it than anyone alive today, except for my fiancé, but his align more with humanity goals. Hence why a lot of us invest.

Of course money can solve most of those problems, but the question is at what rate? Can money solve all of those problems in the next three months during which time Model 3 will generate another $1B+ cash? $60,000+ ASP, less than $30,000 COGS (German study), 5,000 weekly production, and no incremental OpEx needed.

 

[oneday]

$28 billion is a lot more than $10 billion. Interestingly, Ford is being hammered for being weak on electrification and autonomous driving, and for having way too much cash on hand w/out enough innovative ideas to spend it on. Meanwhile, Tesla is the leader in EVs, among the leaders in autonomous driving, but is hammered for not having enough cash to fund all its innovative goals.

If only there were some way for the company with the larger market cap to acquire the smaller one...

Ford's $28 billion cash pile doesn't buy love on Wall Street

The only fear would be the stranded assets and legacy liabilities.

 

[ValueAnalyst]

I don't know if this makes any sense, but I had a crazy thought. How many TSLA shares are outstanding? What if Elon is in Beijing to sign a deal with Tencent where they announce that TC has been slowly buying up or will buy a good amount of outstanding shares to provide financing for GF3. Now THAT could be the short burn!

Maybe not TC seeing as their HQ is not in Beijing, but maybe someone else?

It’s almost like bulls want to give away the company... what in the world, people.

 

[oneday]

I don't know if this makes any sense, but I had a crazy thought. How many TSLA shares are outstanding? What if Elon is in Beijing to sign a deal with Tencent where they announce that TC has been slowly buying up or will buy a good amount of outstanding shares to provide financing for GF3. Now THAT could be the short burn!

Maybe not TC seeing as their HQ is not in Beijing, but maybe someone else?

Buying shares on the open market, provides $0 cash to Tesla. But I do think a strategic partnership is definitely possible.

 

[oneday]

SpaceX isn’t building BFR’s tomorrow and Elon didn’t list the reasons why he doesn’t want to raise capital, so you can’t say whether or not they are different than what I laid out.

Yes they are. They are building BFS and a BFR factory now.

 

[YasB]

Did they say it will produce energy storage? Can you provide source?

I'm not aware that Tesla or anybody else said something about energy storage as in Powerwall / Powerpack. Not sure, how you read that out of my post. I'm simply assuming, if they want to build half a million cars there and said future factories would integrate car and battery production, they'd also produce the battery packs there.

 

[ValueAnalyst]

It’s almost like bulls want to give away the company... what in the world, people.

Every bull has become a financial engineer to find the most creative way to raise the funds that their ceo “specifally” said he does not want. Are we living in a simulation where someone is toying with me?

 

[mrdoubleb]

It’s almost like bulls want to give away the company... what in the world, people.

Agreed. The last thing Tesla needs is to be purchased by a legacy car company. The reason why Tesla has been able to adapt quickly, and chose its path freely is that the only interest they have is to fulfill their mission. A behemoth like that would become a python around the Tesla's neck.

 

[WarpedOne]

Buying shares on the open market, provides $0 cash to Tesla.

Yes.
What it also does is diminishing the pool the shorts will have to drink off.

 

[ValueAnalyst]

Every bull has become a financial engineer to find the most creative way to raise the funds that their ceo “specifally” said he does not want. Are we living in a simulation where someone is toying with me?

As soon as someone illustrates how another $B can make humans procreate quicker so Elon can hire and train thousands more production workers by next month, then I’ll agree with all this financial engineering.

 

[Esme Es Mejor]

The last thing Tesla needs is to be purchased by a legacy car company.

To be clear, I was talking about Tesla purchasing Ford, not the other way around. Tesla has a larger market cap. After 3 consecutive profitable quarters (Q3, Q4, Q1), should be much more feasible.

 

[BioSehnsucht]

To be fair, the suggestion was to sell stock in the Chinese subsidiary on the Chinese stock exchange. Not to sell stock of Tesla Motors, Inc.

Clearly you don't want to sell more than 49%, to retain control, and even then should probably sell even less so you have the option to sell some later. But if possible, another funding method would be preferred, and to maintain 100% ownership ...

 

[oneday]

As soon as someone illustrates how another $B can make humans procreate quicker so Elon can hire and train thousands more production workers by next month, then I’ll agree with all this financial engineering.

This is the last I’m going to say about this but have you seen the roof of the gigafactory? There is 1 reason why it isn’t finished and it looks like $.