I agree, I think going private will be even less likely after good Q3 results if price goes above $420. The best way to beat the short FUD is by executing well. I think a big cap raise is a better idea to ensure the expansion for the next few years with multiple models being released at the same time.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
I agree, I think going private will be even less likely after good Q3 results if price goes above $420. The best way to beat the short FUD is by executing well. I think a big cap raise is a better idea to ensure the expansion for the next few years with multiple models being released at the same time.
Thats great. I like in particular this part:
You Think We're Nuts
Is Ark nuts for their $4,000 target? No. Reuters ranks us for our estimates. We earned 4/5 stars. We don't pull this stuff out of thin air. Unless they jack up operating expenditures Tesla has a real shot of blowing away the Street estimates. Isn't that the type of stuff we're all looking for?
Dan Detweiler
Active Member
Hmmm...
All this junk being talked about here. FUD campaign on the rise yesterday. Frantic efforts to read into every little bit of information that has Tesla's or Elon's name associated with it (including a picture of a toy car, a model of Mars, and Rice Crispy Treats). The fact we are going into the weekend.
Yeah, I smell a fairly significant stock price drop between now and Friday. Maybe another chance to add to your positions.
Dan
All this junk being talked about here. FUD campaign on the rise yesterday. Frantic efforts to read into every little bit of information that has Tesla's or Elon's name associated with it (including a picture of a toy car, a model of Mars, and Rice Crispy Treats). The fact we are going into the weekend.
Yeah, I smell a fairly significant stock price drop between now and Friday. Maybe another chance to add to your positions.
Dan
They understand it very well. They are not willing to invest around 20bln and spend 5years+ to build full cycle auto-battery plant.
(the number is not taken from the thin air, it is estimation made by one company for VW I believe, though BMW is also a possibility).
Pretty much all components in Li-On batteries are registered as dangerous components in EU, and such factory should be built to the chemical plant blueprints. It's prohibitively expensive in EU.
In Tesla case most practical variant will be to re-purpose some chemical factory in the Netherlands for batteries and motors, and to build assembly plant on the german side of the border. It's becoming doable since Tesla grew too big to ignore. Tesla tried to find place in Europe in 2016 but didn't succeed, probably this time EU sides will be more generous with their investment offers.
Although the stock price is much higher than it was in the early days, I think the risk/reward has never been better. I've rarely seem such risk/reward asymmetry in any asset, let alone a stock. The financial media narrative continues to be overwhelmingly negative at the very moment when it will become blindingly obvious (yes, even to those bears who have been focussing on the wrong things - past and present earnings, rather than the future) that a combination of operating leverage and high revenue growth produces lots of free cashflow.
The earnings inflection mentioned in the article is going to happen soon, over the next 3 quarters and it's going to destroy the bear narrative (bankruptcy/lose money on every car - you name it...) behind the massive short interest. Notice how the "Model 3 production isn't ramping" mantra has suddenly been dropped, as production has ramped, to be replaced by "Musk committed securities fraud". Talk about confirmation bias!
He has SpaceX. I doubt he needs any other arguments for going private. The only real difference in these companies is private Vs public. SpaceX wouldn't go even half the way they crossed if they were public.
Thank you for this! These types of posts should also be put in a new thread specifically for outing the shorts. This is a great reference for exposing the FUD on this site.
When it happened last time? you know the FBI part.
"Factual" FUD shorts spread is about SEC checking Model 3 production numbers.
So here’s a fun anecdote. Feel free to disprove my friend if you think he is wrong and know different.
I have a good buddy who works for Toyota. He says no one holds it against you if you drive a car from another manufacturer.... unless it’s Tesla.
The people that have them at Toyota never drive their Tesla’s into work and never drive them to social events where they could be compromised.
Funniest *sugar* ever. Had me rolling.
I have a good buddy who works for Toyota. He says no one holds it against you if you drive a car from another manufacturer.... unless it’s Tesla.
The people that have them at Toyota never drive their Tesla’s into work and never drive them to social events where they could be compromised.
Funniest *sugar* ever. Had me rolling.
No problem. I agree with you that 60%+ short volume is high and I think it's relevant. IMO, if we had a 30% short volume, short interest would probably be lower, but difficult to know for sure, as there are other variables involved.
No doubt, since the Tweet, the fully special war (main weapon is FUD) is declared to Tesla, I would sort it and suggest abbreviations:
Wall Street with its wsFUD,
Short shorts with its ssFUD (Any resemblance to actual events is coincidental),
ICE industry with its iceFUD.
TSLAP would half wsFUDs and cut off ssFUDs.
Wall Street with its wsFUD,
Short shorts with its ssFUD (Any resemblance to actual events is coincidental),
ICE industry with its iceFUD.
TSLAP would half wsFUDs and cut off ssFUDs.
Causalien
Prime 8 ball Oracle
What is Belgium's stance on wealth held off shore. Majority of my stocks is in Canada.
We tax our citizens globally here in Canada, no matter where their wealth are in the world.
Dan Detweiler
Active Member
Interesting discussion. Not directly related to Tesla but I think certainly relevant to the current "go private or stay public" debate. Also I post this not to start a pro Trump/anti Trump debate but to gain insight on the concept of quarterly vs. semi annual reporting as a possible middle ground in the discussion.
Dan
Dan
I have read the ARK analysis and I do believe they are nuts. Although the price target of $700 to $4,000 correlates with my opinion, I believe it is for entirely opposite reasons to the ones they state. I will try and explain why.
The ARK analysis relies heavily on the Maas first player opportunity. This is pretty reckless. We have no evidence that Tesla will be anywhere near ready to have fully automated taxis ever, nevermind be “launching the Tesla Network in the next 1-2 years”. I agree that once Tesla can demonstrate a car autonomously driving across the US then this should make the stock price pop because one autonomous taxi can make a lot of money each year, and they would have a complete monopoly on a novelty product, but it is too soon to price any of this in yet.
For me, we get to $700 and $4,000 purely for ramping the manufacturing of cars and batteries:
So, we are looking at roughly $20bn profits in five years’ time. You can multiply this by 20-30 to get a market cap as the business will still have a long way to grow, so this would be $400bn-$600bn without any mention of Maas. Maas would take it over $1tn
The ARK analysis relies heavily on the Maas first player opportunity. This is pretty reckless. We have no evidence that Tesla will be anywhere near ready to have fully automated taxis ever, nevermind be “launching the Tesla Network in the next 1-2 years”. I agree that once Tesla can demonstrate a car autonomously driving across the US then this should make the stock price pop because one autonomous taxi can make a lot of money each year, and they would have a complete monopoly on a novelty product, but it is too soon to price any of this in yet.
For me, we get to $700 and $4,000 purely for ramping the manufacturing of cars and batteries:
- In five years, Tesla will be manufacturing 1 million vehicles per year. At average price of $50k and 25% profit, this is $12.5b profits
- As mentioned in the last quarterly management call, they are aiming to scale the battery energy business at 100% per year. In 2018, battery storage will account for roughly $1b revenue at 10% profit. In five years, this is likely to be $32b at 20% profit (approaching parity with the vehicle business). Therefore $6.4b profits
- In 2023, we will have 3 million Teslas on the road, now we should see significant revenue from the superchargers. Lets say 20% of these cars supercharge once per week at an average cost of $30 per user. That is $1b in revenue. If Tesla can use their battery tech to either store solar energy or to siphon off excess energy from power stations at night, then we could see good profit margins here. For now, lets just say 20% again. Therefore $200m profits. This assumes that Tesla does not open up the superchargers to any other car company
- Apps and services. Paid for apps and services can only come once we have full autonomy with some exceptions with regards to possibly music or destination booking (restaurants, hotels etc). So probably we shouldn’t price this in now
So, we are looking at roughly $20bn profits in five years’ time. You can multiply this by 20-30 to get a market cap as the business will still have a long way to grow, so this would be $400bn-$600bn without any mention of Maas. Maas would take it over $1tn
Dan Detweiler
Active Member
While I agree with you on much of what you say, I do take some issue with the concept of autonomy. Tesla has stated several times that they could have easily done the cross country demonstration as much as a year ago if they had simply programmed the route. This would, however, create a false positive among the public. By your analysis then they could have reaped the benefits of such a demonstration long ago but instead they chose to go with the bigger picture rather than mislead the public into believing the system was "ready". I feel like the news of the new Tesla chip is huge and along with the hardware updates scheduled to be implemented in the next few months could very well lead to full autonomy within the next two years.
As is the case with all of this, time will tell for sure.
Dan
That is not how pricing works. Here is how the judge calculated Dell’s value to arrive at that the price was $6B or 22% under fair value.
(Source: How Michael Dell Shortchanged Shareholders While Doing Nothing Wrong)
To begin with, and importantly, he refused to credit “LBO pricing models,” which the special committee’s advisors had, indeed, used when courting potential MBO partners. In those, the advisor backs into a price that will offer a financial buyer the prospect of earning a fat return on investment of at least 20% over the ensuing years. Laster felt this resulted in an artificially low price.
Instead, Laster used a “discounted cash-flow model” (DCF)—where you compute the expected cash flow over a period into the future and then compute the present value of that cash flow.
What some judge decides has nothing to do what investors are willing to pay. You are apparenty quoting some discussion, whether LBO price is legally right or wrong. It is totally different question.
I was _only_ saying, that if stock price is only slightly sub 400, it is easier to find investors ready to finance privatisation with 420 than if the stock price is 320.
Last edited:
- Status
Similar threads
- Locked
- Locked
- Locked
- Poll
