TSLA Market Action: 2018 Investor Roundtable

[Duffer]

Dip probably has something to do with todays comment by analyst Jeff Osborne about how he believes that Tesla still needs the 2B cap raise. (Just saw it on Yahoo feed)

If it's shorts then they're even more crazy than I possibly imagined.

More likely some profit-taking...

I have no worries whatsoever. It can drop back to sub-300 for all I care, I'm not selling at these prices. And Q3's going to be even more painful for them.

From a purely selfish standpoint (cash purchases of actual stock) both my wife and I would rather enjoy adding to our portfolios at a discount.

 

[Cosmacelf]

I think any close above 350 will be satisfying. It's been a good week and there's really nothing bad looming that I can see. Tesla in a very rosy place right now.

BTW, did y'all see the Jalopnik review? https://jalopnik.com/2018-tesla-mod...flow&utm_campaign=socialflow_jalopnik_twitter

Here’s an even better review.

Tesla Model 3 Performance: Track Test

 

[Electroman]

Sorry, can't keep up with all the Mod: expletive deleted --ggr Elon says.

That was a comment from FireBirdAlpha which I believe that post was deleted. But in any case - not withstanding the BS remark - the bears have a point that I completely agree with.

When it comes to promising some goals in the future, Elon makes some emphatic statements that never comes to fruition. And no one questions him

- "There should zero doubt on our ability to make 500k cars end of 2018" (paraphrasing) - EM in Q3, 17 earnings calls

- "We will make close to 1M, maybe 750k cars in 2020". "There is this place called Shanghai". Okay so far so good. But the investor letter states, 'the first car from Shanghai will roll out in 2021'.

So how will they make 750k cars in 2020, if Fremont cannot do more than 500k cars max and Shanghai will go live only 2021? Paulo Santos points this out in SA today. It is these kind of false and loose statements that are easily demonstrably shown as false, that angers bears.

As for me - I think they will make around 400k to 500k cars in 2020 - which is IMO phenomenal. With15% margins that is a lot of free-cash flow that can be used for Y, Semi, Roadster, Gigafactories etc..

But you have to agree sometimes bears have a point. But it gets drowned in a chorus of steaming feces that they keep throwing every day.

 

[RobStark]

if Fremont cannot do more than 500k cars max

That is a very big IF.

 

[Runarbt]

...Paulo Santos points this out in SA today. It is these kind of false and loose statements that are easily demonstrably shown as false, that angers bears....

Excuse me, but who gives a crap about what anger bears, or what Paula says on SA?

This sentence make you look like a bear pretending to be a bull in this post. ;-)

Run rate at 500k car by end of 2018? thats not unlikely. 100k x and s, and 400k model 3. what sound wrong with that statement?

750k in 2020-21? They have tent(s). Chinese build quick. Local loans. And what so if they miss by a year? Who care except bears who are.. what? angry and dissapointed? lol.. they will be happy and joyful. another mark to place their new goalpost at.

 

[dc_h]

I'm really curious how Tesla will be able to build factories in China and Europe given that they're still cash flow negative, they're still struggling on Model 3 gross margin, and they're not planning to refinance 1B in loans due over the next several months.

The China factory costs 5 billion by Tesla's estimate. Where does the money come from?

On the short side, it is stunning to see the equity markets react the way they have. The bond and CDS markets didn't flinch from their pre-earnings pessimism, while equity did.

At 7000 model 3’s per week they will be gaap profitable about 40 million a week and higher cash flow positive. They have been paying to grow from 80,000 cars a year to 500 to 600,000 cars a year, to funding growth from 500-600,000 a year to 1,000,000 a year. No more betting the farm.

 

[shortburn]

That is a very big IF.

Plus they are aiming for 600k yearly from Fremont + Giga so far. 10k model 3/ wk & 2k model s/x per wk.

 

[Cosmacelf]

That was a comment from FireBirdAlpha which I believe that post was deleted. But in any case - not withstanding the BS remark - the bears have a point that I completely agree with.

When it comes to promising some goals in the future, Elon makes some emphatic statements that never comes to fruition. And no one questions him

- "There should zero doubt on our ability to make 500k cars end of 2018" (paraphrasing) - EM in Q3, 17 earnings calls

- "We will make close to 1M, maybe 750k cars in 2020". "There is this place called Shanghai". Okay so far so good. But the investor letter states, 'the first car from Shanghai will roll out in 2021'.

So how will they make 750k cars in 2020, if Fremont cannot do more than 500k cars max and Shanghai will go live only 2021? Paulo Santos points this out in SA today. It is these kind of false and loose statements that are easily demonstrably shown as false, that angers bears.

As for me - I think they will make around 400k to 500k cars in 2020 - which is IMO phenomenal. With15% margins that is a lot of free-cash flow that can be used for Y, Semi, Roadster, Gigafactories etc..

But you have to agree sometimes bears have a point. But it gets drowned in a chorus of steaming feces that they keep throwing every day.

Yes, they have a point, but they are always missing the forest for the trees. Elon has been giving over optimistic projections since the day the stock went public ... at, what $18/share? That 20x gain and the hundreds of thousands of cars shipped is the forest that the bears miss. No CEO is perfect. Tesla is not perfect. They make mistakes. They take risks. Unlike bears, smart investors look at the whole package, and on the whole, it is stellar.

 

[Esme Es Mejor]

The bond market has responded incredibly positively to the ER. Bond prices have increased by more than $2.60, which is about 23% of the gap between the market price & par value.

So, the equity market has improved by about 17% since the ER, but the bond market has improved by 23%. No matter where you look, it’s all strongly positive for Tesla.

One more thing: I forgot to factor in the rising interest rate environment in which all corporate bond prices have declined. Even Amazon/Google/Apple bonds are down 2-3%.

Factoring that it in, Tesla bonds have closed more like 35% of the gap between them & the most creditworthy bonds on the market.

 

[Tslynk67]

I think we can all agree, bulls and bears, that Elon makes some outrageous predictions. However, the only thing he gets wrong is the timing, as far as I can see, they all come to be, just a little later than he initially predicts, but still far sooner than anyone else could imagine.

It's his shooting for the stars that gets the moon attitude. Now perhaps he should just do this internally within Telsa/SX, not in the public domain, because you get the loonies laughing lawsuits claiming damages, but I think it gets results this way.

 

[Electroman]

Run rate at 500k car by end of 2018? thats not unlikely. 100k x and s, and 400k model 3. what sound wrong with that statement?

You may be right. What Elon said (or meant) was 500k run rate by end of 2018. Thats about 7k/week M3s + 100k SX. Not so much of stretch from where they are now. Feasible. Even if they miss that run rate and get only to 6k/week, that is still pretty close to what he said then.

But 750k in 2020 (not run rate, but 750k cars made in 2020) without Shanghai being ready? Hmm..

 

[Tslynk67]

One more thing: I forgot to factor in the rising interest rate environment in which all corporate bond prices have declined. Even Amazon/Google/Apple bonds are down 2-3%.

Factoring that it in, Tesla bonds have closed more like 35% of the gap between them & the most creditworthy bonds on the market.

So Moodys can now declare them "not junk bonds"?

 

[MarcusMaximus]

It's his shooting for the stars that gets the moon attitude

Elon has made it abundantly clear that he has no interest in the moon.

 

[Electroman]

Yes, they have a point, but they are always missing the forest for the trees. Elon has been giving over optimistic projections since the day the stock went public ... at, what $18/share? That 20x gain and the hundreds of thousands of cars shipped is the forest that the bears miss. No CEO is perfect. Tesla is not perfect. They make mistakes. They take risks. Unlike bears, smart investors look at the whole package, and on the whole, it is stellar.

Completely 100% agree.

Investors are smart to understand that Elon is overoptimistic and but he gets there eventually. And that is all that matters to Longs

 

[MarcusMaximus]

But 750k in 2020 (not run rate, but 750k cars made in 2020) without Shanghai being ready? Hmm..

Even that sounds like a stretch goal, rather than an impossibility. They're aiming for 10k M3 production sometime next year, as I remember. That, plus continued 2k/wk S/X is 624k/year. That's within striking distance and still(planned for) 2019.

 

[Runarbt]

You may be right. What Elon said (or meant) was 500k run rate by end of 2018. Thats about 7k/week M3s + 100k SX. Not so much of stretch from where they are now. Feasible. Even if they miss that run rate and get only to 6k/week, that is still pretty close to what he said then.

But 750k in 2020 (not run rate, but 750k cars made in 2020) without Shanghai being ready? Hmm..

Thats only 25% increase in production for 2019 and 2020. Have Tesla _ever_ had such a low/slow production ramp?

 

[hobbes]

You realise this video-meme, with various fake subtitles, has been doing the rounds for years, it's not new.

Sounds a bit like "if everybody does it, must be o.k." .

 

[AudubonB]

Too bad you can´t leverage the driving experience (drive multiple Teslas at once) !

WELL, YOU....might remember not to put “short” into your Favorite Call list....

 

[Open Interest]

That was a comment from FireBirdAlpha which I believe that post was deleted. But in any case - not withstanding the BS remark - the bears have a point that I completely agree with.

When it comes to promising some goals in the future, Elon makes some emphatic statements that never comes to fruition. And no one questions him

- "There should zero doubt on our ability to make 500k cars end of 2018" (paraphrasing) - EM in Q3, 17 earnings calls

- "We will make close to 1M, maybe 750k cars in 2020". "There is this place called Shanghai". Okay so far so good. But the investor letter states, 'the first car from Shanghai will roll out in 2021'.

So how will they make 750k cars in 2020, if Fremont cannot do more than 500k cars max and Shanghai will go live only 2021? Paulo Santos points this out in SA today. It is these kind of false and loose statements that are easily demonstrably shown as false, that angers bears.

As for me - I think they will make around 400k to 500k cars in 2020 - which is IMO phenomenal. With15% margins that is a lot of free-cash flow that can be used for Y, Semi, Roadster, Gigafactories etc..

But you have to agree sometimes bears have a point. But it gets drowned in a chorus of steaming feces that they keep throwing every day.

One of the analysts on CNBC yesterday (not sure but I think the Oppenheimer guy), brought up a good point in response to a question like that. He said they place more faith in Elon’s comments when he is talking about the short term - one or two quarters out. His comments are less reliable the farther out they go.

As a banker this rings true to me. Projections from my clients that are two or three years out are of less value to me than those of the shorter term, there is just less clarity the farther out you go.

 

[Cosmacelf]

So Moodys can now declare them "not junk bonds"?

I don’t think Moody’s rates them (the 2025 bonds) at all. They were issued unrated, which, IMHO, was a mistake, but then I’m not a CFO.