TSLA Market Action: 2018 Investor Roundtable

[omarsultan]

Also, have to ask ourselves:

"So what was GAINED by taunting the SEC?"

Did you ever watch a football game where the coach goes off on the refs on what seems like every call? It's a mind game to make sure the ref knows he's going to pay price for marginal or sloppy calls.

I would imagine that what Elon gained with his tweets is a signal to the SEC that while he went along this time, no more free passes. If they are going to come after Tesla again, they better do their homework.

 

[1101011]

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...

Totally absurd.

 

[sundaymorning]

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

Nothing salient about it.

Tell them Musk fights till the end if he’s wronged. It’s been in his character since he was a kid, which is why he gets bullied by other children. If he ever wanted an easy way out, he would have kept his millions when SapceX was failing in the early days and bailed on the project. His SpaceX company is worth $30 billion, leveraging $1-2 billion of loan won’t be a problem for him in a worst case scenario. China has already lent him $650 million for the Shanghai factory, they are expected to lend him another 2 rounds.

Warn them about luvb2b’s estimate of .29 eps.

 

[omgwtfbyobbq]

Really? You're in denial that Elon tweet's the craziest crap ~that's not true~ on a regular basis??
Seriously?? Wow...

You're pulling my leg now, aren't you?

Good luck, sir....

I'm not pulling your leg. As I saw it, you claimed that Elon has always tweeted forward looking statements about Tesla concurrent to Tesla releasing their production numbers after the end of the quarter and before their quarterly reports, which should be easy to link to. Tweets are dated, as are Tesla production announcements, so linking to all 24 of those over the past 3 years is a start.

 

[Remus]

Discuss

There is nothing to discuss those talking points have been refuted many times here. Obviously they are not using the cheapest delivery method as the delivery hell unfold. They had to stop production periodically due to line debugging, motor or battery shortage, etc. Those also cost money. And as we see problems resolved in Q4 production cost and delivery cost per car will continue to drop.

 

[cardood]

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:

I.e. Tesla only had 1,985 Model 3's on inventory at the end of 3Q2018, and that included showroom cars, test-drive cars and any residual inventory in transit.

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.

Excellent breakdown. I did this earlier, but only for Q3 2018 and arrived at the same 1,985.

 

[Barklikeadog]

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.

sounds like a buying opportunity

 

[SpaceCash]

Hey guys, it's the weekend so forgive me for straying off topic here but there's some up-and-coming rapper (who is tooootally not me or anything, I wouldn't wanna doxx myself for the shorties) who references Tesla in every song he makes. He just started recording a new song last night and I counted 3 Tesla shoutouts. Pretty dope if you ask me

Brendan Lounstho

 

[Fact Checking]

"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."

So you are quoting some shorts there, right?

So this is a hodgepodge of very confused arguments that are hard to separate. Let me try, in order:

• "Even if EBITDA is looking good, Interest is going to kill them if nothing else".
• False:
  
  • Take a look at Q3 estimates: interest payments are a minuscule amount compared to the cash Tesla has already generated in Q3: they generated over 1 billion dollars of cash, over 500 million in free cash flow after interest payments. EBITDA, cash-flow analysis and even GAAP Tesla is looking good with and without interest payments.
  • In addition to those estimates take a look at Romit Shah of Nomura Instinet stating that Tesla is sustainably profitable:
  • There's also the recent CNBC interview with Ron Baron stating the same.
• "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"
• False:
  • Firstly, Fremont is not nearly "at capacity" at 4k/week levels - according to recent independent audit they can upgrade to about 8k/week with "minimal capex less than $100m". Tesla is currently limited by the battery production limit of Panasonic lines in the Gigafactory - this is being increased by about 70% by the end of the year. Final capacity will be around 10k and that can be reached with incremental capex.
    
  • Secondly, Tesla has only scratched the upper crust of Model 3 demand even in the U.S.:
    • they are only selling $49k and more expensive versions at the moment,
    • they are not even leasing/financing while around 80% of all new car sales in the U.S. are financed,
    • upcoming features like the V9 software update will increase incremental demand even more
  • Tesla generally adds extra transportation costs to the ASP in Europe and other global markets, so it's a cost for the customers, not for Tesla. They are still very large markets and generate at least as much revenue for Tesla as the U.S. market.
• "I've also seen quite an increase in used stock in the US"
• False:
  • Both Model S+X and Model 3 inventory is at very low levels for the year. Here's the Model 3 inventory:
  • 
  • Yes, you are seeing that correctly: that's only 1,985 Model 3's in inventory, or less than 3 days of production. As a comparison Ford/GM/Chrysler have inventory levels of over 60 days of production ...

That's the main misconceptions I've been able to find in that argument, but it's all pretty incoherent so I'll stop here.

 

[Remus]

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.

This must be a n echo chamber because I found myself agreeing with you all the time.

Wasn't a similar case thrown out by a judge recently because 'we don't punish companies for missing targets'?

 

[Thumper]

DaveT, Yesterday at 8:58 PM
New Would love to hear what y'all think of some of my most recent thoughts on Elon vs SEC.

Dave, You have been and continue to be one of the steadiest, most insightful and most articulate forum contributors/bloggers. Again, you have, I think correctly analyzed much of the problem with Elon and his tweets. I look forward to your ideas for extracting us and Elon from the downward PR morass in which we find ourselves.

 

[Mobius484]

LoL

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

View attachment 341428

 

[dondy]

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.

The claim is that Tesla knew that they couldn't reach declared numbers even in theory. Obviously the investigation won't reach any result, but it can be very costly for the Tesla management in wasted time.

What is more important american legal system found an equivalent of "confession" mechanism in Stalin Russia. The perjury. By asking 100s of irrelevant to the core story questions and collecting answers you just have to sit patiently and wait until your "client" will say something wrong. Ones. Easy-peazy.
Hence "don't talk to police"

 

[Fact Checking]

Virtually all tax comes from the rich.

That's false, because that argument is usually presented with federal income tax revenue, which is misleading. If we take a look at other sources of tax revenue the picture becomes a lot more varied:

I.e. the Payroll Tax and the Excise Tax create a lot bigger burden on the middle class and the poor than on the rich.

In fact the top 1% only paid 31.9% of federal tax revenue, 68.1% was paid by others.

Then there's also state taxes, local taxes and sales taxes, which are often regressive, i.e. they take disproportionately more from the poor than from the rich. These are very significant as well, here are the 2018 projections:

• federal: $3.34 trillion
• state: $1.60 trillion
• local: $1.34 trillion

I.e. state and local taxes generate about as much revenue as federal taxes.

 

[NicoV]

So you are quoting some shorts there, right?

So this is a hodgepodge of very confused arguments that are hard to separate. Let me try, in order:

• "Even if EBITDA is looking good, Interest is going to kill them if nothing else".
• False:
  • Take a look at Q3 estimates: interest payments are a minuscule amount compared to the cash Tesla has already generated in Q3: they generated over 1 billion dollars of cash, over 500 million in free cash flow after interest payments. EBITDA, cash-flow analysis and even GAAP Tesla is looking good with and without interest payments.
  • In addition to those estimates take a look at Romit Shah of Nomura Instinet stating that Tesla is sustainably profitable:
  • There's also the recent CNBC interview with Ron Baron stating the same.
• "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"
• False:
  • Firstly, Fremont is not nearly "at capacity" at 4k/week levels - according to recent independent audit they can upgrade to about 8k/week with "minimal capex less than $100m". Tesla is currently limited by the battery production limit of Panasonic lines in the Gigafactory - this is being increased by about 70% by the end of the year. Final capacity will be around 10k and that can be reached with incremental capex.
    
  • Secondly, Tesla has only scratched the upper crust of Model 3 demand even in the U.S.:
    • they are only selling $49k and more expensive versions at the moment,
    • they are not even leasing/financing while around 80% of all new car sales in the U.S. are financed,
    • upcoming features like the V9 software update will increase incremental demand even more
  • Tesla generally adds extra transportation costs to the ASP in Europe and other global markets, so it's a cost for the customers, not for Tesla. They are still very large markets and generate at least as much revenue for Tesla as the U.S. market.
• "I've also seen quite an increase in used stock in the US"
• False:
  • Both Model S+X and Model 3 inventory is at very low levels for the year. Here's the Model 3 inventory:
  • 
  • Yes, you are seeing that correctly: that's only 1,985 Model 3's in inventory, or less than 3 days of production. As a comparison Ford/GM/Chrysler have inventory levels of over 60 days of production ...

That's the main misconceptions I've been able to find in that argument, but it's all pretty incoherent so I'll stop here.

I want to thank Fact Checking for over 1000 high quality posts in barely 2 months. I can only think of one other person who would be capable of doing this, and it is Elon Musk. Having said that, maybe FC and EM are the same person: they used the same abbreviation for the SEC, and since the Model 3 production hell ended end of july EM has had a lot more time available since august.

 

[MXWing]

Did you ever watch a football game where the coach goes off on the refs on what seems like every call? It's a mind game to make sure the ref knows he's going to pay price for marginal or sloppy calls.

I would imagine that what Elon gained with his tweets is a signal to the SEC that while he went along this time, no more free passes. If they are going to come after Tesla again, they better do their homework.

There’s no history of Elon playing 4D chess, being a master of misdirection like Sun Tzu or successfully getting into his opponents heads like Muhammad Ali/Connor Mcgreggor.

The only doubt being placed is in the head of institutional investors and longs. When I mean longs it’s not us raging TMC bulls.

Lots of longs are not on TMC and all own Tesla’s.

I’d offer my own kids to be the first spacex human cargo.

However, I understand not all see things the way we/I do.

Your ref analogy is poor because the ref gives up nominal calls and saves f*cking you over when it really matters.

You be buddies with the ref, not adversaries.

 

[N5329K]

Would love to hear what y'all think of some of my most recent thoughts on Elon vs SEC. Though I don't agree with the SEC going after Elon so harshly, I also don't agree with Elon attacking and blaming the SEC, the media and shortsellers. If he doesn't stop, there's a good chance that Elon won't be CEO for much longer... and that would be a very sad outcome.

Part 1: The Turning Tide - Why the SEC is going after Elon and why he’s losing many of his most ardent fans

I think we're seeing some of the same self (and company) destructive behaviors from Mr Musk that got him kicked out of PayPal. They say history doesn't repeat itself, but it rhymes.
Robin

 

[azaz]

I think we're seeing some of the same self (and company) destructive behaviors from Mr Musk that got him kicked out of PayPal. They say history doesn't repeat itself, but it rhymes.
Robin

he was kicked out of CEO role at Zip2 as well. at a certain point he has to re-evaluate his own behavior.

 

[dc_h]

Wrong wrong wrong. Most shorted and undervalued stock in the world. A short squeeze is GOING to happen. Question is when.

The short squeeze starts after I win the mega millions and put it all down n Tesla!

It’s my belief that as long as people are looking for a short squeeze, it’s unlikely to happen. I’m not even sure it would be a good thing, encouraging a new ground of shorts to hop in at 600 a share. I’d prefer short interest just disappate as earning and cash flow improve.

 

[CorneliusXX]

That's false, because that argument is usually presented with federal income tax revenue, which is misleading. If we take a look at other sources of tax revenue the picture becomes a lot more varied:

I.e. the Payroll Tax and the Excise Tax create a lot bigger burden on the middle class and the poor than on the rich.

In fact the top 1% only paid 31.9% of federal tax revenue, 68.1% was paid by others.

Then there's also state taxes, local taxes and sales taxes, which are often regressive, i.e. they take disproportionately more from the poor than from the rich. These are very significant as well, here are the 2018 projections:

• federal: $3.34 trillion
• state: $1.60 trillion
• local: $1.34 trillion

I.e. state and local taxes generate about as much revenue as federal taxes.

The CBO shows the following split (taken from page 3 https://www.cbo.gov/sites/default/f...016/reports/51361-householdincomefedtaxes.pdf)

That said, I should replace virtually all with a significant majority. The conclusion remains the same, the only way a 50% increase in tax revenue is going to occur is by taxing the wealthy (i'll use top quintile as a proxy for rich), and trump is not going to do that.