TSLA Market Action: 2018 Investor Roundtable

[RobStark]

Justy a thought I had. If they prioritize the higher cost vehicles this year and push back the base cars to next year, what effect will there be on next years TM3 margins when they have to start chewing through 100's of thousands of base orders.

I doubt there are 100k+ orders for the $35k car.

 

[anticitizen13.7]

In general the tone of this forum is cautious to slightly pessimistic this evening with few notable exceptions
That from a contrarian standpoint is good for SP tomorrow

I tend to agree, from the angle that the market will inflict unexpected pain to all players.

Earnings that look good for fans often end up doing nothing or provoke selloffs. Bad earning cheered by the shorts sometimes inexplicably precede steep price rises.

My observation on Reddit is that Wall Street usually wins. And the average investor, whether bull or bear, loses!

 

[postpast]

In general the tone of this forum is cautious to slightly pessimistic this evening with few notable exceptions
That from a contrarian standpoint is good for SP tomorrow
I suspect a Lower open and higher close
Even if there is a few days of sell off it will be short lived
This ER reduces uncertainty about M3 ramp
In any case trying to predict SP based on fundamental basis is super hard
Unless you have a clear AH reaction to ER which we did not get tonight
My best guess that SP closes higher tomorrow than today’s close
It could even confound the biggest bulls and end markedly higher
I’ve bought this stock all the way from $202 to $386 and my average cost basis is $266 I think
So either ways it’s going to be interesting
I just feel for my way OTM $680s, $600s $500s
Still monthly chart looks super sharp

It was an interesting cc and report. The financials were actually pretty solid and stable, yet the cc gave a lot of ammo to both bulls and bears. The timelines have been pushed back so we are looking at months of "no news" ( unless Tesla comes up with something new). Next quarter financial report can be expected to be as lacklustre or stable as this one.

I expect the stock to trade in the 320 to 360 range until new news is released. TSLA is impossible to predict though, so it wouldn't surprise me to see either 250 or 400 in the next few months

 

[AlMc]

The equipment is assembled and working at Grohmann. They just have to take it apart and move it to Nevada. It will outperform all of the current automation at the Gigafactory, and take up less space. At least that's what I understood.

Show me.

@JRP3 : There was mention on the CC that they may allow tours of the GF (I assume so that people can verify that the packs are essentially machine built with minimal human intervention). IF I had a vote I would send you (not kidding) as a long time contributor to TMC and for waiting years for your '3'!

EDIT: It should happen AFTER they install the Grohmann 'fix'

 

[Mike Smith]

This report should cause TSLA to rise, although it may fall early as shorts try to make things look bad (as I believe they did in the after hours). I expect TSLA to be up strongly by the end of the week, if not the end of the day. Consider:

TSLA had been in an uptrend. This uptrend stalled before earnings as many longs were afraid to hold through this report given what has happened in recent earnings reports. With nothing bad revealed, these longs should now buy back in and the uptrend has no reason not to continue.

More importantly, many shorts will now cover since the two big payoffs for being short - need for near-term capital raise or major new model 3 delays - now look to be pretty much off the table. Also weighing on the shorts is the fact that as Tesla gets bigger and has more diverse revenue streams the odds of any problems being catastrophic falls further and further. This report is a major hurdle passed and the risk/reward for being short just got worse.

Remember, the real risk for Model 3 was that something would be seriously wrong with the car, causing major delays. That risk is gone.

Also: Elon just said $15-18B per year in semi sales by 2022, which nobody in the media is mentioning for some reason.

 

[postpast]

Shot in the dark; is there anyone here who can convince Elon to replace John McNeill with a similarly committed person. Sales and Service Manager should be a highly appreciated VP position No matter how brilliant Elon is, he just doesn't have the time to take on that position. The person to take that role should be able to deal with hundreds of emails or calls a day and have a team to deal with thousands more. It is a full-time gig.

 

[Hogfighter]

I'm surprised that we all listened to the same CC, but came away with such different opinions re: the 3 ramp. I heard reiteration of previously announced guidance, with specifics to justify the increased confidence of that guidance.

I also didn't get the impression that he was playing dodgeball with the weekly rate. He's never, ever given such specifics on weekly rates in the middle of the ramp. Way back on the Q2 2012 CC he said similar things...no specifics for the ramp in 2012, but will produce 20,000 cars in 2013. Which they did.

Finally....not to draw ire from any on this forum, but when talking purely from an investment standpoint, pushing back the short range 3 is a positive. I never have understood selling a product for $35k when you can't possibly fulfill demand if it was priced at $40k.

 

[Chickenlittle]

Shot in the dark; is there anyone here who can convince Elon to replace John McNeill with a similarly committed person. Sales and Service Manager should be a highly appreciated VP position No matter how brilliant Elon is, he just doesn't have the time to take on that position. The person to take that role should be able to deal with hundreds of emails or calls a day and have a team to deal with thousands more. It is a full-time gig.

Yes. I can. We are real tight

 

[postpast]

Yes. I can. We are real tight

There are people on this thread who have the ear of Tesla management, I have seen it before.

 

[Chickenlittle]

There are people on this thread who have the ear of Tesla management, I have seen it before.

Yes I do. We don’t get to see each other (except for conferences) but I read about him on a daily basis. Not a day goes by that he is not in my thoughts. Tonight I listened to him for over an hour on the phone. We also exchanged gifts today. I gave him 59,000 dollars and he gave me a car

 

[sundaymorning]

I'm surprised that we all listened to the same CC, but came away with such different opinions re: the 3 ramp. I heard reiteration of previously announced guidance, with specifics to justify the increased confidence of that guidance.

I also didn't get the impression that he was playing dodgeball with the weekly rate. He's never, ever given such specifics on weekly rates in the middle of the ramp. Way back on the Q2 2012 CC he said similar things...no specifics for the ramp in 2012, but will produce 20,000 cars in 2013. Which they did.

Finally....not to draw ire from any on this forum, but when talking purely from an investment standpoint, pushing back the short range 3 is a positive. I never have understood selling a product for $35k when you can't possibly fulfill demand if it was priced at $40k.

Judging from the AH price action, investors are just as bipolar as we are here. The SP shot up to $353 then back down to $340s then back up to $354s then currently sitting at $343.

 

[landis]

Shot in the dark; is there anyone here who can convince Elon to replace John McNeill with a similarly committed person. Sales and Service Manager should be a highly appreciated VP position No matter how brilliant Elon is, he just doesn't have the time to take on that position

Didn't the Sales Manager and the Service Manger both just get promoted?
As both scale up, what is the value of common oversight below the executive team?

 

[dc_h]

At 18:01:54 it was up 5 or 1.45%, according to Nasdaq. Papafox has better words for this, but a duel is on and volume now over a million by 40k. Take a look at the trades, a share here, a share there, then 930. Sometimes, as now, more (mysize purchase) than one, and then nibbles. I once asked Papafox if that trade pattern was evidence of manipulation. He said--some qualifier--always manipulated.

@JRP3 : There was mention on the CC that they may allow tours of the GF (I assume so that people can verify that the packs are essentially machine built with minimal human intervention). IF I had a vote I would send you (not kidding) as a long time contributor to TMC and for waiting years for your '3'!

EDIT: It should happen AFTER they install the Grohmann 'fix'

maybe Elon can sell 10,000 Grohmann hats and pick 10 winners for a golden ticket tour of the gigafactory? Expenses paid via hat sales. Or maybe Tesla flashlights powered by 2170 batteries?

 

[NicoV]

Oops, yes it's a typo. Should be late 2018.

My european estimate just changed from ‘end 2018’ to ‘begin 2019’. For both my reservations (first one line waiter, second one october 2016).

 

[NicoV]

I think they're having more problems than we thought. Today they moved back the delivery of the short range battery to late 2018. If they are having problems making the battery modules it would seem that the short range would increase the number of cars by one third.

Therefore they must be having problems on the car assembly line, because they could make more cars using the short range battery pack.

Not necessarily. Maybe they planned a certain ramp of motor production, and with the delays of the battery pack production, they may now be able to produce more motors than what can be consumed by a mix of sr and awd, hence the decision to prioritise AWD to more fully utilize their motor production capacity, which is better for their margins.

 

[30seconds]

I think it was pretty clear that until the new automated module lines are installed (March) production will be limited. Of course this means that the base car will be pushed back. As is the AWD car. Probably white / cream interiors as well, Definitely the P version.

There was lots of positive news in this call, the most positive to me was mgmt seeing a near term path to positive cash flow. Its all about model 3 scale up and that is what they are focused on.

 

[MitchJi]

WAG, of course. I hope the stock will double by sometime this year. I would expect it to exceed $600 at some time in the year, but drop afterwards to no lower than somewhere~ $400-500 the latter most likely. No bets. Short of war at home or abroad Tesla remains in my view a hedge stock. Unfortunately, no dry powder and need to conserve cash for M3 purchase.

It would probably be a good idea to use your cash to buy TSLA and sell it in a few months to buy your M3.

 

[JRP3]

@JRP3 : There was mention on the CC that they may allow tours of the GF (I assume so that people can verify that the packs are essentially machine built with minimal human intervention). IF I had a vote I would send you (not kidding) as a long time contributor to TMC and for waiting years for your '3'!

EDIT: It should happen AFTER they install the Grohmann 'fix'

I appreciate the sentiment and would love a tour but I'd be quite happy with verifiable reports of increased customer deliveries from my fellow Tesla fans. I don't like the fact that seemingly key elements of Model 3 production have not been worked out by now. They've been building packs in volume for 4+ years, they should have had a handle on what is required.

 

[Hogfighter]

I appreciate the sentiment and would love a tour but I'd be quite happy with verifiable reports of increased customer deliveries from my fellow Tesla fans. I don't like the fact that seemingly key elements of Model 3 production have not been worked out by now. They've been building packs in volume for 4+ years, they should have had a handle on what is required.

Right, and Elon said precisely that on the CC. Clearly this path is exceedingly difficult, and absolutely not easily replicatible (is that a word?)....contrary to many expert opinions like Sergio Marchionne.

I do believe that most here agree that Elon has too much on his plate already, which is why he missed the problems of Zones 1 and 2. Taking on additional responsibilities that Jon O'Neill did is only making matters worse. How do we clone Gwynne?

 

[BETA1019]

This was my take, too. I'm not overly worried--the company will be fine, and 2018 should prove a banner year overall. But the assurances of short-term 2,500 by end of March, 5,000 by end of June were very iffy. At one point Musk even mused about how they're taking all the learning from the problematic-to-manufacture 3 and applying them to the design of the Y. Which is nearly verbatim what we heard around a year ago, only with S/X learnings applied to the design of the 3. We had Elon forecasting 3-6 months at the outside for a coast-to-coast autonomous drive, released to customers by the end of that frame. Which is what we got 6ish months back. Didn't happen, and the timeline has shrunk by 0% since then. My Model 3 delivery estimate still says Dec-Feb, which is a thing that already has a zero percent chance of occurring. No discussion in the letter or call of customer impact of the next few months' ramp plans vis-a-vis prior/current estimates. And McNeil leaving, with no plans to hire anyone to handle sales/service other than the group reporting directly to Musk? Uhh.

Clearly this is difficult stuff, and I'm over-simplifying. My overall impression, though, is that we got a lot of discussion over what should happen / is expected to happen and very little we did what we said we would. Why would we take the musings over 600k 3s at Fremont seriously when expectations have been so seriously mismanaged thus far?

As a wise man once said, this was very much sizzle, very little steak.

They'll get there. I have little confidence they'll get there when they say they will. Which is pretty par for the course--but the 3, 'designed for simplified manufacturing' was supposed to be a turning point. Clearly it was not (or has not been in its first 6 months of production), and I have little faith it will turn into one in the near future.

Disclaimers: I'm not selling, not an advice, etc etc.

I second this sentiment exactly. And I am a huge Tesla/Elon Musk fan, but I didn't like the way he was answering all of these questions. I get that he just launched a Roadster into space, but (1) he waffled on far too much, and (2) his tone was rather condescending. Granted, some of the analysts deserved it, but its almost like he's high on himself and he's trying to out 'smart talk' everyone. Or maybe just bore them to death. This ER call will be received negatively in my view.