TSLA Market Action: 2018 Investor Roundtable

[Bunky]

Surely changes to Model 3 ramp forecasts are covered by the 'forward looking statement' disclaimer stating that actual results may differ from projections. I don't see how regulators can go after them here. Am I missing something or is it more bs?

This is all incredibly frustrating considering we were cruising towards $400 ahead of record production and possible profitability before a series of completely self inflicted unforced errors.

 

[avoigt]

For the Model 3 it's even better than that: at the end of Q3 Tesla's Model 3 inventory was less than 3 days of production at 4.1k/week.

Those are incredibly low inventory levels, and it's because Tesla's are already sold before they are made, and because of the very effective delivery push at the end of Q3.

Ron Baron nicely calculated in the CNBC interview that with every additional car they produce an incremental cash for the company is created. It just continues growing.

Can't remember that I have seen the CNBC host ever that silent after someone ended. They definitely did not know what to say so they did not comment and went to another topic instead of appreciating what a great model Tesla has with suppliers being paid long time after the customer did.

What a beautiful business model! The low inventory adds to that.

 

[CuriousSunbird]

One could create hft trading algorithm, which would monitor Elon’s twitter feed and immediately place sell order, when it notices any new post?

I know a guy who created one that feeds off language in earnings calls (including but not limited to Tesla).

 

[sundaymorning]

Thats unbelievable - all what I can say is that its indeed like the SEC works in favor for the shorts now.

(...) the Elon Musk legal team. What they’re telling us is that the SEC does continue to investigate Tesla. (...) there’s an existing investigation that could take a bit longer. It involves Tesla and Elon Musk’s stated production goals for the Model 3 largely, and profitability; if those things match up to reality, and whether there’s a fraud case by saying ‘Hey, we’re gonna reach profitability, for example.'”

“The case focuses again on targets that Musk made and some of the other corporate executives as well, about when the Model 3 was gonna come out, how many were gonna be produced, and profitability. When Tesla was gonna be profitable. Remember, these goals have changed along the way. He’s now saying the third quarter should be profitable. (...)"

Elon Musk's Twitter tirade comes amid SEC probe on Tesla's Model 3 production ramp

That could be a main reason for the SP drop we have seen Friday.

I really do not get what the SEC is doing here but it is not in favor of investors for sure..... Since a while Tesla made clear and confirmed that they intend to get profitable in Q3 +4 and every following quarter and now the SEC claims it was an by intent false statement to mislead the investors and they make that claim a few weeks before the official Q3 ER is released where profitability is expected ???

They could look at the numbers first and decide than if they want to investigate. In any case how likely is it that they find as Email where an intend to fraud is written down? The same is true for production numbers.

The SEC should definitely be sued for that and I hope that the judge looks in to this as well and makes a balanced call.

Sounds to me like we see more bumpy roads ahead I am afraid....

Ok this puts Musk’s tweet about the sec into context.

I have to support Musk in this case, the SEC is really stepping beyond their boundaries here. They are indeed interferring; Tesla’s goals for profitability has always been made public since his tweet about Q3&4. He’s stated publicly many times on CC that Q3 will be “cutting it close,” he’s expressed GAAP/non GAAP profit estimates being a goal. So what is there to investigate? If Tesla indeed shows profits, or close to it, wouldn’t this case prove to be nothing more than a witch hunt?

for perspective, the SEC inquires into company practices are quite normal, they call it an “investigation” but in actuallity, it’s really going to end up as a footnote, especially if Tesla shows profits in Q3 or Q4. Elon’s tweet calling out the SEC might be his way of planting the seed to embarrass them once Tesla does show a profit. This move could be one of those 3D chess moves. Remember, according to luvb2b’s estimates, Tesla should show 0.29 eps this quarter.

In short (pun intended), I don’t think the sec inquiries are something we should be concerned about, it’s normal protocol when they send inquiries; however, I suspect they are unable to comprehend the magnitude of Musk’s rockstar status, and how everything he does will be magnified by the media, so perhaps the SEC is also being baited into inqueries.. but perhaps, they are also colluding with shorters and being influenced by their Wall Street friends. There should, indeed be an advocation for congress to look into the SEC possible malpractices/collusion with shorters to ensure public trust.

 

[Fact Checking]

... but GM refuses to supply enough Bolts to my local dealer, who has a waiting list !!!! (And of course I can't really drive it from a faraway dealer, because no Superchargers.)

BTW., the reason there's a limited supply of the GM Chevy Bolt is because the Bolt is uneconomical, it is sold way below break-even production price:

• GM gets more than $10,000 ZEV credits for every Bolt sold in a ZEV state (IIRC), which credits they can use 100% to reduce the ZEV liabilities of their ICE cars. Tesla on the other hand can only sell their ZEV credits at a fraction of a price. (Remember this every time trolls complain about why Tesla gets to account ZEV income: GM can and does utilize their own ZEV credits at about twice the price.)
  
• GM is getting battery packs from LG-Chem at essentially dumping prices: LG-Chem is selling them way below price, to get a foothold in the car battery manufacturing business - and also in an attempt in 2017 to position the Bolt against Tesla's Model 3. We know this according to a leak, about which leak LG-Chem was very unhappy: LG-Chem gave the battery packs for about $145/kWh, $100 under the price their other customers were getting ...
  
• Despite all that the Bolt is still selling at an about $12,000 loss per unit, according to leaked complaints from PSA in Europe (where it's sold as the Ampera-E)

That's why GM isn't increasing production of the current version: LG-Chem won't sell them more battery packs at a loss, and they can't make them cheap enough. It's basically a compliance car and a "Tesla-killer".

 

[Mobius484]

Sorry quoted wrong post, was supposed to go to some shorty troll named smoky something, about his comments about how Elon uses a private jet therefore is evil and fraudulent.


Pretty sure Elon’s overall NET carbon footprint over his lifetime is relatively small dude. He can get to work however he needs for now in my opinion. The other crap u believe, well, guess the bets are already placed. And

 

[gringotuanis]

Ron Baron nicely calculated in the CNBC interview that with every additional car they produce an incremental cash for the company is created. It just continues growing.

Can't remember that I have seen the CNBC host ever that silent after someone ended. They definitely did not know what to say so they did not comment and went to another topic instead of appreciating what a great model Tesla has with suppliers being paid long time after the customer did.

What a beautiful business model! The low inventory adds to that.

CNBC is insane with their analysis of Tesla. It's really amazing. As a right wing person I don't understand why the liberal media attacks Tesla. It's so counter their supposed green goal. Ah but I digress. I just want Tesla to build cars at a profit lol.

 

[ebyard]

Copied from another forum I am on - Speak EV - apols. to authors if also on this forum; I thought they merited discussion here:

"One theory I've heard for the tweets is it's what Elon wants now he sees he's backed into a corner: i.e.: "Death by bureaucrat."

Certainly IF the financials are in tatters even with record production (and Elon will now more closely then anyone else) then as a face saving exercise its some level of cover for him to skulk off and leave the mess for someone else to clean up.

The reality is Elon should be (should have been) more worried about the balance sheet than the market cap, and if delivering the most lucrative cars to straight cash buyers, with the cheapest possible delivery costs are still not showing a profit and positive free cash flow from operations, then Tesla is done. (Short sellers have absolutely nothing to do with that most basic objective).

Personally I think these tweets show a man under immense pressure, which given the Model 3's huge successes is really worrying. I think they will miss the Q3 cash and GAAP targets. The market looks to be seeing this too (IMHO)."

In reply:

"Its contrary to popular belief but I suspect you're right about the financials. Even if EBITDA is looking good, Interest is going to kill them if nothing else - he's a production line at capacity, servicing a home market with lower transportation and regionalisation, and any further growth is going to require yet more money.

I've also seen quite an increase in used stock in the US - it looks like they've taken in about 1k MS cars in the US in the last month which I imagine was to shift MS - although thats not been replicated elsewhere that I can see (virtually no used stock in the UK that I can find). 1k is a fair amount in a total MS count of 14k deliveries worldwide - if they're having to buy the business with strong part ex, and there were stories of early lease redemption offers to secure free unlimited supercharging, thats going to pass the head line figures by, and leak out in the accounts.

My other theory is he's trashing the price himself to stop the shorts controlling the trashing. He was ramping it, the bubble would burst and they'd cash in. They can't do more harm than he's doing himself, Would you want to be shorting Tesla at 260 where the last year has seen a lot of support at 300 for the share price? I bought week last friday at 270, sold on Monday at 310 - looking back that was a lucky play. I'm not buying at 260, my luck will run out."

Discuss.

 

[RobStark]

But Iran, Iraq and Jordan shouldn't be too far behind - they all have plenty of desert and can see the end of easy oil revenues.

Jordan doesn't have any significant resources of fossil fuels.

Jordan imports ~95% of its energy.

 

[JRP3]

As a right wing person I don't understand why the liberal media attacks Tesla.

Advertising dollars.

 

[RobStark]

EV Sales: World

If you accept the basic thesis that EVs are better and will take over, then it's clear that Tesla is seizing the largest share of the market. This is particularly true outside China, since Geely and BYD don't do much in the way of export business.

Geely's plan for RoW is its Volvo subsidiary.

And BYD's RoW plan is heavy EVs but apparently not Class 8 trucks competing directly with Tesla.

 

[Do It]

New I agree and I think lots of people agree too, including Ross Gerber on Twitter. How can we get organized and plead to Elon?

I

So you are saying that if you gamble and lose money at a casino, you can maybe get that money back just by waiting?

Don't get me wrong here - I am a big fan of Elon/tsla and has been a strong long since 2014. I went through the dip to $140 in early 2016 and every other big and small dips in between. I have never been rattled by any of the short FUD on demand, competition, or funding.

However I agree with many of the other longs (Gerber, Munster, Romit Sha, Gali of hyperChange, Rob of TesladailyPadcast, and many longs here on this forum) that Elon's recent tweets are harmful to tsla and its investors, and the best way moving forward is to focus on positive result to convince longs rather than picking fights with shorts. Elon sees thing black and white so he wants to fight and I understand his feeling. Elon has stated that he did not care about day traders and weak longs, however thing are not that clear cut and many small investors can't live up to Elon's expectation of a "true long term investor" because they don't have a lot of financial buffers. Elon has a good heart and cares about small guys so if we can get the point through to him that the hurt to small investors is real I think he would understand. I think the best way to get through to him is to write individual letters to him via tsla ir and tell your story why this hurts. I am not in favor of collective actions because that can be easily seen as "us vs. him."

One last thing I want to clarify is that I understand price goes up and down and the money you lose today can be back tomorrow. However just because you have faith in tsla and continue to invest doesn't change the fact the on a particular day your account balance is x amount and that is what you have on that day - that is real and calling it "paper" or anything else is just mathematically incorrect. If there is a distinction between "paper" vs " real" then why not calling company financial loss and profit as "paper loss" and "paper profit" - financial reports don't do that because they are just loss and profit - there is nothing "paper" about it.

 

[AWDtsla]

As a right wing person I don't understand why the liberal media attacks Tesla. It's so counter their supposed green goal.

Because you guys invented a boogeyman, which you still believe in even after many obvious events in which they failed to be anything near liberal.

 

[sundaymorning]

Copied from another forum I am on - Speak EV - apols. to authors if also on this forum; I thought they merited discussion here:

"One theory I've heard for the tweets is it's what Elon wants now he sees he's backed into a corner: i.e.: "Death by bureaucrat."

Certainly IF the financials are in tatters even with record production (and Elon will now more closely then anyone else) then as a face saving exercise its some level of cover for him to skulk off and leave the mess for someone else to clean up.

The reality is Elon should be (should have been) more worried about the balance sheet than the market cap, and if delivering the most lucrative cars to straight cash buyers, with the cheapest possible delivery costs are still not showing a profit and positive free cash flow from operations, then Tesla is done. (Short sellers have absolutely nothing to do with that most basic objective).

Personally I think these tweets show a man under immense pressure, which given the Model 3's huge successes is really worrying. I think they will miss the Q3 cash and GAAP targets. The market looks to be seeing this too (IMHO)."

In reply:

"Its contrary to popular belief but I suspect you're right about the financials. Even if EBITDA is looking good, Interest is going to kill them if nothing else - he's a production line at capacity, servicing a home market with lower transportation and regionalisation, and any further growth is going to require yet more money.

I've also seen quite an increase in used stock in the US - it looks like they've taken in about 1k MS cars in the US in the last month which I imagine was to shift MS - although thats not been replicated elsewhere that I can see (virtually no used stock in the UK that I can find). 1k is a fair amount in a total MS count of 14k deliveries worldwide - if they're having to buy the business with strong part ex, and there were stories of early lease redemption offers to secure free unlimited supercharging, thats going to pass the head line figures by, and leak out in the accounts.

My other theory is he's trashing the price himself to stop the shorts controlling the trashing. He was ramping it, the bubble would burst and they'd cash in. They can't do more harm than he's doing himself, Would you want to be shorting Tesla at 260 where the last year has seen a lot of support at 300 for the share price? I bought week last friday at 270, sold on Monday at 310 - looking back that was a lucky play. I'm not buying at 260, my luck will run out."

Discuss.

This isn’t worth my time of day to discuss. Be gone.

 

[ebyard]

However I agree with many of the other longs (Gerber, Munster, Romit Sha, Gali of hyperChange, Rob of TesladailyPadcast, and many longs here on this forum)

Gerber especially needs to go see Elon and just chat over a coffee. Whatever happens, Tesla needs that COO now more than ever, and lift some pressure off Elon's shoulders. Even Elon's mother is saying that she's fed up of the FUD spreading so it is clearly taking its toll on the family as a whole.

 

[ebyard]

This isn’t worth my time of day to discuss. Be gone.

Ha I'll tell them. I thought some points very salient, actually.

 

[Fact Checking]

As a right wing person I don't understand why the liberal media attacks Tesla.
​

Advertising dollars.

There are two strong sources of FUD and attacks in liberal politics against Tesla:

• UAW (union) influence in liberal politics, and UAW has a strong bias against anything non-Detroit, where they have a very strong presence.
• NY hedge funds have good connections to the business sections of various liberal news media, such as the New York Times ...

There's also the fact that Elon never really outlined his political views in the past, tried to remain neutral, and also tried to work with the Trump administration. As a result neither side is trusting him - and via Pravduh some mainstream journalists feel attacked as well.

 

[CorneliusXX]

As an example in general, 2 trillion in revenue against 3 trillion in expenses is that not that great. We are anxiously waiting to see how the chips play out. I'm betting we have 3.1 trillion in revenue against 3 trillion in expenses. I hope for all our sakes I am right.

Virtually all tax comes from the rich. Trump isn't going to hike taxes by 50% on his mates. The only way the US comes closer to a balanced budget is political change.

However it seems that US deficits haven't historically mattered much to the market while the USD is the global reserve currency anyway.

 

[MXWing]

Actually, I'm getting very concerned about Tesla's inventory problem. My data suggests that they've got about 60 days of unsold inventory sitting in lots across the US. It's a massive financial burden and potential liability that's reflective of a company en route to the dustbin of history.

Oh wait, did I say Tesla? I meant Ford, GM, Toyota, Honda, BMW, VW, and pretty much every non-Tesla automaker in the world. Tesla's unsold inventory is two weeks worth.

I got evidence why Tesla has a huge issue. Look at all the 3s not with owners.

 

[SO16]

I

Don't get me wrong here - I am a big fan of Elon/tsla and has been a strong long since 2014. I went through the dip to $140 in early 2016 and every other big and small dips in between. I have never been rattled by any of the short FUD on demand, competition, or funding.

However I agree with many of the other longs (Gerber, Munster, Romit Sha, Gali of hyperChange, Rob of TesladailyPadcast, and many longs here on this forum) that Elon's recent tweets are harmful to tsla and its investors, and the best way moving forward is to focus on positive result to convince longs rather than picking fights with shorts. Elon sees thing black and white so he wants to fight and I understand his feeling. Elon has stated that he did not care about day traders and weak longs, however thing are not that clear cut and many small investors can't live up to Elon's expectation of a "true long term investor" because they don't have a lot of financial buffers. Elon has a good heart and cares about small guys so if we can get the point through to him that the hurt to small investors is real I think he would understand. I think the best way to get through to him is to write individual letters to him via tsla ir and tell your story why this hurts. I am not in favor of collective actions because that can be easily seen as "us vs. him."

One last thing I want to clarify is that I understand price goes up and down and the money you lose today can be back tomorrow. However just because you have faith in tsla and continue to invest doesn't change the fact the on a particular day your account balance is x amount and that is what you have on that day - that is real and calling it "paper" or anything else is just mathematically incorrect. If there is a distinction between "paper" vs " real" then why not calling company financial loss and profit as "paper loss" and "paper profit" - financial reports don't do that because they are just loss and profit - there is nothing "paper" about it.

Don’t ever put money into the stock market that you have to pull out at a specific date. Perhaps the stock market isn’t for you.