TSLA Market Action: 2018 Investor Roundtable

[Fact Checking]

It seems Institutions Tesla stock owners are weaker then individual owners , always overreacting.

Yes, most institutional investors are "weak longs", I believe @neroden ran the numbers that came to that conclusion?

 

[Remus]

Elon Musk‏Verified account @elonmusk
Sorry for difficulties delivering your Tesla due to high volume! Critical to show that environmentally sustainable is financially sustainable.

2:23 PM - 28 Sep 2018

Thrilled to see my hero coming out of this stronger. His recent tweets are masterful. I hope they drag this stupid law suit for years during which time Tesla would rocket .

 

[wipster]

No, volume increased in the past hour or so, to 2x-3x of the previous volume. Had shorts stopped covering volume would have decreased.

Something weird is happening, and under high volume.

Ha! Your last sentence reminded me of something I heard on CNN this morning from a reporter about the Judicial Committee:
"Something is happening and we don't know what it is..."
All that was missing was Mr. Jones...
Bob would be proud.

 

[MikeC]

Don't panic Elon says

Elon Musk on Twitter

For anyone new to trading TSLA...

 

[Fact Checking]

This seems logical to me, but I never hear anyone talk about the net difference between vehicles in transit before and after the quarter.

I think I made that exact distinction in this comment.

And yes, I agree that this asymmetry in the queue of incoming and outgoing vehicles in transit is important.

 

[Intl Professor]

Schwab indicates quarterly report expected after market on October 31, 2018. Some here have speculated. Schwab is usually right in my experience.

 

[wipster]

Lutz gets 50% of the talking time and says all the made up lies and talking points which he has been lying through this teeth all these years.

I am now beginning to suspect that law of nature favors evil over good.

Especially his bullshit accusation that Tesla is sitting on huge amounts of unsold inventory instead of selling to dealers right when it leaves the factory!

 

[Ludalicious]

Anyone else notice this?

 

[Duffer]

The parties are not monolithic, though. (Not even the Republican party, although they're certainly trying to make it monolithic.)

In particular, the Democratic party covers a range from pro-business (the former "moderate Republicans") all the way to socialists.

And, even if Musk angered some Democrats and people to the left of Democrats (he absolutely did), that doesn't mean that they're all supporting the death of Tesla.

I agree that crushing Elon isn't limited to any one political party. I would challenge anyone to find any lawmaker in the House or Senate that has not received "contributions" from one or more of the industries that Elon is disrupting.

I was just about to cash out 20% of my TSLA shares to finally purchase my dream car, a fully loaded P3D, when this threadbare lawsuit dropped. Back to a holding pattern now. To assuage my frustration and unplug from the incessant FUD I’m taking off for Tahoe with my buddy and his new 3D for weekend of golf at Coyote Moon and Squaw Creek.

Many thanks to Fact Checking, Foghat, JHM and many others for providing great insights into this latest episode of “As the Tesla Turns.”

I played Coyote Moon 3 weeks ago, great course. Enjoy!

 

[shlokavica22]

No such prohibition that I'm aware of: the filing of a civil suit cannot possibly come with penalties before there's a court decision, that would be prejudicial.

But note that it doesn't even matter: Elon specifically stated it during the Q2 conference that they don't want to and don't expect to raise capital in any future quarter.

They are likely cash flow positive now, despite still having Model 3 manufacturing line payments related ~$650m of capex outflow in Q3 and Q4, and likely won't need any outside equity financing ever again, similarly to Amazon.

The former GM guy stated in the interview that this is indeed the case and no one corrected him.

I think it does matter, because we need to understand what is the short's game plan.
If the believe of ousting Elon is the driving force behind their play, we can expect prolonged pressure that potentially leads to weak longs closing positions.
If, on the other hand, they believe TSLA won't turn enough profit and (while prohibited raising capital) the exhaustion of reserves is imminent, then the pressure will be up to the point TSLA proves the profits from Model 3 are already golden (hopefully next week sheds more light on much improved gross margin).

 

[Artful Dodger]

Ah, yes, but... not all the people who will trade are smart shorts. Some stop losses will be triggered, some margin calls issued, some squishy longs freaked...

Indeed, we bottomed out today nearer to $260 so that's a trigger for the uptick rule. Plus as was explained here yesterday Shorts can use the purchase of very low strike price Call options to trigger market makers to sell actual shares, hedging their exposure. So that's technically not shorting, since the market maker owns the shares. But the effect on SP is the same, downward pressure.

 

[keydiver]

Lutz gets 50% of the talking time and says all the made up lies and talking points which he has been lying through this teeth all these years.

Lutz is SUCH an idiot! He thinks GM's dealer model is better, where GM sends the bill to the dealership as soon as the car leaves the factory, but then they have to wait 60 days for the actual payment, vs Tesla model where Tesla gets paid when the customer picks up their car, which is what, like 1-2 weeks after it leaves the factory??? Or, maybe he has been listening to the short sellers, who think Tesla is just storing the cars at their stores.

 

[Fact Checking]

If, on the other hand, they believe TSLA won't turn enough profit and (while prohibited raising capital) the exhaustion of reserves is imminent, then the pressure will be up to the point TSLA proves the profits from Model 3 are already golden (hopefully next week sheds more light on much improved gross margin).

I believe this is the main thesis of most shorts who are shorting the fundamentals.

The FUD and trolling is just them running interference: they trade in herds and they communicate in herds.

Profitability and positive cash flow will make most of them go away I believe.

I don't think Elon will be or can be forced out: the SEC's main legal weapon for enforcement is Section 10b-5, but their broad interpretation of it is in heavy contradiction with legislative history, which conflict was never seriously challenged in court.

In my opinion the last thing the SEC wants is a well funded defendant who communicated truthfully and in good faith challenge the SEC's overly broad reading of Section 10b-5, combined with a credible and powerful First Amendment challenge.

The usual SEC targets are genuine swindlers, who are happy to get away with fines and bans and are not seriously fighting the SEC.

If I'm correct about this then once Elon's lawyers file a devastating reply brief, or when they file for dismissal on summary judgement, the SEC will start a new round of settlement negotiations, with some face saving but inconsequetial penalty accepted by Elon - or the SEC might even drop the case on some pretext, such as Tesla being profitable and Elon tweeting more smartly, or saying that more discovery cleared Elon.

 

[larmor]

Anyone else notice this?View attachment 338965

Apparently someone didn't get the memo...

 

[MarcusMaximus]

By 2020, when the case is on trial, TSLA stock will be 650 dollars. The complaint will go from "misleading investors with no funding at 420" to "misleading investors wanting to take company private for a massive discount using an unfair evaluation".

I can see the summaries now: "On August 7, 2018, Musk said he was considering a deal to go private at $420, a 30% downside to current prices. Within weeks, the stock price plummeted."

 

[strider]

Anyone else notice this?View attachment 338965

I assume that's an info glitch, otherwise someone lost 10% in a few seconds....

 

[EinSV]

BTW., does anyone have any knowledge or reasonable guesses about what the fastest possible delivery time in the Bay Area can be, if the owner is scheduled perfectly, from the moment the car rolls off the assembly line and is cleared for transport? 3 days? More? Less?

According to Google maps, the distance from the Tesla factory to the Delivery Center in Fremont is 2.3 miles, with an estimated driving time of 7 minutes.

So I think the fastest possible time from car being cleared for transport to beginning of delivery is about 7 minutes. (Maybe slightly longer for paperwork/inspections etc.)

I have seen at least one report of an owner scheduled to take delivery the same day production of the car is complete -- not sure how common that is though.

On a related note, according to insideEVs Tesla was targeting deliveries of 1000 Model 3s per day this week just in the SF Bay Area. Bay Area Bonanza: Tesla Insider Leaks Model 3 Delivery Extravaganza I expect many of those Model 3s will not be sitting around very long after they are produced and that Fremont Delivery Center is going to be hopping this weekend.

 

[Fact Checking]

On a related note, according to insideEVs Tesla was targeting deliveries of 1000 Model 3s per day this week. Bay Area Bonanza: Tesla Insider Leaks Model 3 Delivery Extravaganza I expect many of those will not be sitting around very long and that Fremont Delivery Center is going to be hopping this weekend.

I'm very curious what the "Model 3's in transit" inventory level is going to be!

It was 11.1k last quarter due to the 200k VINs limit - this quarter's figure should be close to the absolute minimum they can achieve. 3k would be fantastic.

 

[Quassinoid]

Best post of the day, and it's from the man that is under the most stress and pressure of anyone at Tesla. It kinda gives one a sense of peace of mind that he knows everything is going to be okay.

Elon Musk on Twitter

 

[traxila]

So no trial until feb 2019. Then Elon might get a fine and might have to step down or maybe not. And this changes the value of Tesla today by 14%? By then we will have had Q3 deliveries, Q3 earnings, Q4 deliveries, Q4 earnings, Europe Model 3 release, Model 3 new battery design, $35k Model 3, EAP, maybe FSD demos etc. This trial will be long forgotten by the time it happens. To me it feels like a -2 to -5%, not -14%.

No, the pretrial Conference is set for Feb 2019, a formality where a bunch of lawyers show up and bore each other to death with paperwork and motions. I would guess the actual trial would be another six months away at the least. Most probably just another conference. The lawyers that Elon is paying now know that their main goal is to delay.

Mark Cuban dragged his insider case out for six years, then was found not guilty. Think similar timeline would be fantastic! Tesla three or four years from now will be a very different company.