TSLA Market Action: 2018 Investor Roundtable

[CuriousSunbird]

Gotcha. I pulled up the Q4 report again and see which lines you are working from. They also have 10 billion in vehicle and solar leases that I believe could be monetized sooner if needed (of course those are offset by long term debt at some timing/ ratio).

I'm not fully up on how convertible notes work, but it seems like if things go well and Q3,Q4 are profitable, the stock will likely be above the conversion price of $359.87, so no need for cash (turns into stock). The $566 million due 11/2019 may not though due to the $759.36 conversion price. However, at that point, there should be many quarter in the black and funding, if needed, will be available.

You are correct that if the stock price is above 359.87 in Feb the liquidity issue is eased (albeit at a slight dilution cost).

Monetization of the vehicle leases is already happening (they securitized $500 million a couple of months ago), but it has the downside of reducing future revenue - you don't get the rent on the leases you sold. Still it can help with liquidity. Many of us who read the financials are waiting to see if the new accounting standard gives more clarity on what is left to be sold - it will take effect with this quarter. An issue here is that a lot of the sales have been with Tesla residual value guarantees - as the credit worsens, the investors charge more to take that risk.

The solar leases are partially monetized through a combo of VIEs, solar notes and subsidiary loans. They are complicated to value (the b/s is cost less depreciation, not market value) and also have the credit issue - Tesla has guaranteed certain performance levels to some customers.

 

[sdtslafan]

Tesla's cash balance is largely irrelevant - if I have $3,000 in the bank but I owe the IRS $4,000 next week, I am not in good shape.

The more relevant number is working capital - Current Assets (assets I expect to be able to realize or liquidate in the next 12 months) less Current Liabilities (payments I have to make in the next 12 months). For Tesla this was negative $1.1 billion at end 2017. (I do think this looks worse than it is because ZEVs should be disclosed asCurrent Assets but are not).

Then they should raise money! not a big deal...bears are trying to create this false scenario where doing a capital raise is a bad thing. It is not. Once we can confirm that Tesla can produce the 3 at good margins, then we know they are on track and I would have no problem with them doing a cap raise to find the semi, roadster, and y. Its really not the big deal that you are making it out to be. The important thing is that they are executing their plan successfully and we will know soon enough.

Much more likely that TSLA will double in value than NVDA, NFLX, AMZN, or AAPL. Investors looking for real growth don't have many options like TSLA.

 

[CuriousSunbird]

That is true if Tesla had margins of 0%. But in H2 they will sell 50k S/X at 30% margin and 125k at 20% margin. At 30K$ per S/X and 10K$ per 3, thats about 1.5B$ margin for S/X and another 1.25B$ for 3. I can see a cash crunch, not for Tesla but for the shorts. (Disclaimer: back of an envelope calculation)

Even if these numbers come true, I think you are confusing gross margin and net.

 

[CuriousSunbird]

Then they should raise money! not a big deal...bears are trying to create this false scenario where doing a capital raise is a bad thing. It is not. Once we can confirm that Tesla can produce the 3 at good margins, then we know they are on track and I would have no problem with them doing a cap raise to find the semi, roadster, and y. Its really not the big deal that you are making it out to be. The important thing is that they are executing their plan successfully and we will know soon enough.

Capital raise is not necessarily a bad thing. If they had done a capital raise in August instead of the debt issue they would be in a lot less trouble than they are now.

Of course, there is a dilutive effect which will lower the stock value (and the stock price when it comes to reflect fundamentals).

 

[mongo]

Yes, I thought it was best to point out that it is not a trivial amount.

Roger that! Very helpful to see the types of numbers it may be.
(I hope your 10k swag at 3 profit is a bit pessimistic, EAP is a 5k option on its own and I hope they make money on the cars without needing it, maybe 20% margin on base version + AP options? )

 

[elasalle]

Some defence - sold some Covered Calls today (instead of buying Puts) for earnings.

 

[Waiting4M3]

Some defence - sold some Covered Calls today (instead of buying Puts) for earnings.

Would you mind sharing at what price and expiration date?

 

[elasalle]

Would you mind sharing at what price and expiration date?

Sep 18/Jan 19 -- against mainly Jan19/20 LEAPS --- 370-440 range. This is against like 25% of Calls I have and am OK if it gets exercised.
I just had a few June that were almost expiring worthless(0.08-0.20) - so I closed them and resold against the same. ~ cheers

btw, I like to consider that these calls are being bought by shorts who are trading in the reverse direction, once again for protection

 

[Wnuk]

Battle for $300 is on.

 

[Mich]

now 3xx feels much better.

 

[rocketlow49]

Battle for $300 is on.

What is stimulating this rise in price?

Now they are just teasing us! 299.99 daily high? lol

 

[mongo]

THIS IS TESLA!!!!!

(at 3:50 pm)

[seriously, are we all just sitting around staring at the the ticker? worse than New Year's ]

 

[rocketlow49]

Penetration! We are officially back to 3xx!

 

[Jayjs20]

It does feel like it's growing a tad too quickly. I hope some insiders got information from tomorrow's ER ahead of time.

In any case, I'll feel better when we're back in the 340-350s, not now.

 

[rocketlow49]

Continuing to ramp...hard.

 

[Curt Renz]

Battle for $300 is on.

What is stimulating this rise in price?

Now they are just teasing us! 299.99 daily high? lol

It's now above $300. The trading pattern hints that some professional short sellers such as hedge funds may be covering before the earnings report tomorrow afternoon. Many retail shorts including an infamous mini-hedge fund manager would likely stick with their positions until a short squeeze erupts.

 

[rocketlow49]

It's now above $300. The trading pattern hints that professional short sellers such as hedge funds are covering before the earnings reports. Retail shorts including an infamous mini-hedge fund manager will likely stick with their positions until a short squeeze erupts.

What is a short squeeze? Please excuse my ignorance. I am assuming "Covering" means taking profit on short?

 

[CuriousSunbird]

What is a short squeeze? Please excuse my ignorance. I am assuming "Covering" means taking profit on short?

Covering is closing your position, whether at profit or loss.

 

[MartinAustin]

Continuing to ramp...hard.

The S&P500 & NASDAQ are rallying hard into the close. Probably TSLA being dragged along

 

[rocketlow49]

300 never tasted so good. Now back to 299.9. lol