TSLA Market Action: 2018 Investor Roundtable

[Tslynk67]

intent to purchase model 3 at all time high "we can't speak to production but we can speak to demand"

Kevin Hincks on Twitter

Very good video - all should watch. The Tesla purchase-intent is literally off the chart and completely disconnected with the stock price for the moment. So this somewhat objectively validates my subjective findings that despite all the FUD and lies that are being spread, the word is getting out there, people desperately want a Tesla. and it's growing.

This is massively bullish.

 

[Esme Es Mejor]

I will disagree with you here, even-though I'm bull.
So I don't see why would bear buy your argument.

I’m a little bit confused. You think Tesla’s work on autonomy has no market value if spun off as a separate unit? Maybe I’m missing something...

 

[Tslynk67]

Again? Tesla upgraded to Hold by CFRA, but risks, valuation concerns persist

The final paragraph sums-up what it's all about. Timing just timing. It will all come to be, but just a little later than originally announced.

“While we see cash flow risks from further production delays potentially hurting the stock, we would expect the eventual resolution of production issues would be an upward catalyst for the shares,” he said. “Our enthusiasm is restricted by execution risks and valuation.”

Kinda agree, but we at TMC are often a lot more informed than the general investment population, so we overestimate how much is known. Happened to me few times. However, last few weeks have been so negative, I can't see sentiment go down any further.
If it's not clear, I'm flip-flopping here

As I see you as an ultra-cautious, slightly skeptical bull, I find this a very optimistic statement...

2:30 pacific time

Wish they did these an hour earlier, that's 23:30 here in central Europe. Might have to stay-up for this one though...

 

[Causalien]

After 2 decades of investing. ( 20 years exactly !!!). A story stock like TSLA is too much excitement for me. After it becomes stable, I am going to go into safe stuff so I can have fun in peace without the nagging feeling at the back of my head saying: "It's another new day, the shorts must've release another bad news today. Click phone to find out!!!"

Seriously shorts, can you focus all your bad news release in one day instead of dragging it on? Even at the peak of financial crisis, the day by day reporting of one company only lasted a few weeks. Not a whole quarter. A man's got a life to live.

 

[WarpedOne]

A man's got a life to live.

The shorts have a life to loose.

 

[Tslynk67]

After 2 decades of investing. ( 20 years exactly !!!). A story stock like TSLA is too much excitement for me. After it becomes stable, I am going to go into safe stuff so I can have fun in peace without the nagging feeling at the back of my head saying: "It's another new day, the shorts must've release another bad news today. Click phone to find out!!!"

Seriously shorts, can you focus all your bad news release in one day instead of dragging it on? Even at the peak of financial crisis, the day by day reporting of one company only lasted a few weeks. Not a whole quarter. A man's got a life to live.

Nah, you'll be bored. It's like when Formula 1 drivers retire, they take up some other dangerous activity because they're used to the buzz...

That being said, $TSLA >$3000 can buy a lot of adrenaline.

 

[Tslynk67]

Elon taunting Einhorn on Twitter. Makes me think the Q2EC might be more positive than some are thinking...

Elon Musk on Twitter

 

[Chartered321]

My thoughts before 2Q18 earnings:

• Progress on profitability and product awareness is on its way. The M3 is the most compelling and technologically
  
• Bears managed to keep the price at under 300 USD, while triggering some margin calls and showing this big effort to clients keeping their promises made with their latest sell side notes. So well done, but not impressive certainly as their target price is still way far from 300.
• The era of easy and uncontrolled spreading of opinions and whatever kind of bulls#its is at its maximum. Earning calls of Facebook and Twitter told us that there is a big problem and at least people are getting more aware of the fake news and how journalist use FUD to get free popularity (well done Linette Lopez) and and the second derivative of its growth should be negative soon.
• Bulls and the company (operations wise) showed overall big strength, given these challenging times, and this is exactly what we needed to test to step up in level.

So now it's time to let the company speak and release their guidance on the next couple of quarters. We need to figure out the path to 3Q18 and how quick the big guys will get in and burn the bears. What would make them more positive? Very simple, they have told us on many occasions: sustained positive FCF generation; better than anticipated demand for higher priced Model 3 variants which could carry gross margins near TSLA targets; and growth in TSLA vehicle demand even as EV tax incentives wane (yeah that's as simple as that ).

 

[gora321]

Elon taunting Einhorn on Twitter. Makes me think the Q2EC might be more positive than some are thinking...

Elon Musk on Twitter

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If I remember well I saw similar story already when the guy is crying about Tesla solid investors.

Now they know what means Tesla Long, but they still don't know why.

 

[Tslynk67]

First talk of funding for GF3 starting up...

Tesla Plans $5 Billion Investment in China Factory

 

[glen thomson]

First talk of funding for GF3 starting up...

Tesla Plans $5 Billion Investment in China Factory

that seems like or could diffidently be fake news lol some complete anonymous person says something i wouldn't trust the article

 

[mutle]

Looks like their market cap is over $990 billion now. Probably hits $1 trillion later in AH or in an early morning surge.

Probably not, because that number is based on the previous quarter's share count and Apple retired around $20b of shares this quarter. They would have hit $1T earlier this year already if they had not retired so many shares over the last couple of years.

Also saw iPhone numbers miss mentioned here early. The number is slightly below estimates, but revenues are much higher than expected because of underestimated ASP. This of course shows all the reports over the last 6 months about low demand for the iPhone X were just FUD.

ASP underestimation could also happen in Tesla's Q3 report, the model mix is looking like it will be the most profitable in the next 2 quarters and the ASP estimates I have seen recently look very low, even if you assume EAP and FSD don't have a high take rate (which I don't believe).

Btw, I wish there was a forum like this to discuss AAPL away from the usual FUD and trolls.

 

[avoigt]

Elon taunting Einhorn on Twitter. Makes me think the Q2EC might be more positive than some are thinking...

Elon Musk on Twitter

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“Right now the market is telling us we are wrong, wrong, wrong about nearly everything,” Einhorn wrote in a letter from Greenlight Capital to clients dated July 31. “And yet, looking forward from today we think this portfolio makes a lot of sense.”

It does not sound like that guy learned anything from what the market tried to teach him. His quote sounds like denial from what he concluded which is the worst you would expect from a Hedge Fund Manager

(...) “We doubt the entry-level Model 3 will be produced profitably anytime soon, if ever,” he said.

The M3 is profitable already despite the company as such. Even if the M3 entry level would never be profitable the M3 across all variants could very likely still be.

He described Elon Musk’s behavior over the quarter as “erratic and desperate” and noted Tesla Inc.’s production problems.

It does not matter what the behavior of a CEO is and will have if at all a very much short term effect on the SP.

Production problems with 5k/w are irrelevant. Relevant are cost per unit and ASP.

I admit that I like the very negative sentiment about the ER. In any scenario thats a good position for the SP.

 

[neroden]

Agreed, short-selling is pretty despicable actually, actively wanting a company to fail and borrowing stock to sell it in order to drive the price down and make that failure more likely.

Can anyone actually tell me a scenario on which this is OK?

Well, this is the classic short-selling market maker scenario:

Market maker is trying to sell stock to longs and runs out, doesn't have any more in inventory, nobody will sell to him right now. His business requires that he sell the stock at all times (condition of being a market maker). So he borrows stock and short-sells it and then starts phoning up other companies trying to round up some stock to buy later to cover it,

That's sort of legit, though sort of not. It's not retail short-selling, though.

 

[neroden]

I just got a call from risk management at my broker. They are calling those with high concentrations of TSLA to inform based on in house experts and options activity, they see a 37% move in the stock after earnings release tomorrow.

A 37% move on the downside seems exceedingly unlikely based on technicals, sentiment, and fundamentals -- but you never know with the market. I will say if this happened I would be doubling my TSLA investment by selling everything else I owned, because a price in the $180s is extraordinarily attractive. I don't believe for a second that this will happen, since there's enough buying interest at prices like THAT.

If on the downside, that would create a call for my portfolio (37%!!!...no *sugar*) so they asked me to keep an eye and be ready to either sell some stock or make a deposit. Never had a call like that before in my 35 years of trading. Trying to stay rational (I am long) despite the unprecedented amount of FUD...this being the icing on the cake. Tomorrow will be huge either way....I certainly hope the market reacts to bad earning in a good way as it has acted in a bad way with positive earnings elsewhere as of late. Getting the popcorn out and the checkbook ready....it will take a lot more than I have seen to shake me out of my long position.

 

[neroden]

I agree with the kitchen sink quarter, but it sure seems that it’s baked into the SP already. I for one would be surprised if it dips much below where we are now.
That being said, it all depends on how the quarterly report is written. If there’s a lot of predictions on future production rates, as well as wordsmithing such as ‘each part of the line is capable of factory gating x amount of blah blah blah’, then the SP goes lower.

OTOH, if they say we’re at a sustained 3 production rate of 5,000/week RIGHT NOW, and fcf positive RIGHT NOW and will be for the foreseeable future, then watch out....it’ll take off.

I'm expecting that they're sustaining somewhere between 4500-5000/week right now, which I suppose will be slightly disappointing, though it keeps creeping upward as they knock bottlenecks out. That said, I actually think they are free-cash-flow-positive as of now -- I think ASP on Model 3 is very high this quarter and I think the variable cost of production is very low as well (I'm remembering the teardown estimates of variable cost of production).

 

[neroden]

Who still believes that short squeeze is imminent?

When Elon said there was a short burn coming, I looked back at his "Tsunami of Hurt" comment. That "tsunami of hurt" happened eventually, but it didn't happen for *six months*. Six months after Elon's "short burn" comment would be sometime in *December*. No more need be said.

 

[Lessmog]

It's silly to think one manufacturer is going to make a billion cars. Tesla's focus on high margin has a two fold impact. It Rob's market share from competors and forces when to react and gives them Capital to expand. But make no mistake, Tesla wants competition to mass produce EVs. Tesla just wants to own the biggest profit margin models while accelerating the transition to EVs and solar.

I believe that changed a couple/few years ago when Elon did his big talk in Norway? in front of owners.

Original plan was to show other OEMs how to make compelling EVs and Tesla to remain a smaller player in the industry, but it didn’t work like Elon imagined it should. It was at that talk where his mind set changed and he said something to the effect, since they won’t willingly follow by example, Tesla will make them follow or put them out of business.

Since that talk, Elon’s been laying the foundation to kill every OEM in his path. And now he’s included the Energy sector and related industries. He changed from I’ll hang at Tesla until Model 3 to I’m going to build a family empire and complete ecosystem.

Totally agree. Good memory and insight, imho.

Agreed. In addition, I wonder if Tesla is not kind of squeezing the subsystem market by taking a lot of production in-house: seats, glass (?), maybe even chips and perhaps other parts? Not to forget Grohmann purchase, which starved the German producers of a reliable vendor.

Whether, how and when all that impacts share price is a different kettle of fish, of course.

 

[neroden]

I'm from Sweden and have some of my savings in tsla. We get the odd fud stories in Sweden too but reading some US news sites now is pure insanity. On the Yahoo finance first page I was presented with 16 negative articles about tsla. Many of them were various versions of the Eismann interview. Granted maybe I had some browser cookies indicating I had an interest in tsla but it's still not right. Aren't there any US laws that protect corporations from that kind of slander?

Yes, it's called "trade libel" in some cases and "market manipulation" in others. For a trade libel suit, it's necessary to drag it through the courts for years, which is not worth Tesla's time, probably.

For "market manipulation", it's necessary to get the interest of the SEC, who prosecutes a vanishingly small number of cases per year, and *infamously* only goes after the littlest of fish and the easiest caes these days (yes, schonelucht, this is why you can find *some* SEC cases, but the SEC still ignores big cases).

 

[shootformoon]

Extremely well stated. Totally agree. The number of dumb Wall Street billionaires like Einhorn, Chanos and Ackman is astounding. Luckily we have smart billionaires like Icahn and Ron Baron to counterbalance

I feel your comparing tsla to hlf is insulting to tsla.