TSLA Market Action: 2018 Investor Roundtable

[dmckinstry]

I think they are required by their own bylaws to release the ER within 3 business days of the first day of the following month. So the window is Nov 1-3, but Nov 3rd is a Sat. That leaves Nov 1st or 2nd for the Q3 ER.

Is the within 3 days required to be on or after that first day? Could it be as early as Oct. 30th or 31st?

 

[neroden]

I recommend caution at this point in the overall market as well. My signals show a possible pullback in markets in the medium term - months. I am mostly in cash right now and 3 other names. Not putting a recommendation to sell, just to be mindful.

Medium-term pullback, I believe. We're sort of overdue for one, and Trump is making such an ungodly political mess (not to mention the political messes in Australia, the UK, the EU, and Ontario) that investor fear gauges should be way up.

 

[Intl Professor]

At this time, there is not $680 million in cash or loans, for any Chinese Giga-factory...

Source?

 

[neroden]

Lol... I am a numbers guy and Uber is a numbers game. When I am asked to render an opinion for a potential Uber driver I take the task seriously since my reputation is on the line.

As a matter of observation, I have yet to take an Uber ride in a car that was less than five years old. I make a point of asking about their car selections.

Oh, Donn, I get it, you were solely doing *Uber* calculations. Not reasonable to make that about Tesla.

Teslas are slam-dunk profitable cars for taxis or limos.

Nobody can make real money on Uber because Kalanick set up a business model where the drivers don't get paid minimum wage (there are loads of articles about this).

 

[Artful Dodger]

*Sigh*

My new theory. (Not entirely serious, but possible...)

The short-seller cabal has actually read this. Before they read this, they were trying to force the stock below $360 (because they thought that Tesla wouldn't be able to pay the bonds in cash). Now that they have finally noticed this provision, they are trying to force the stock below $252, for exactly the same reason.

They still don't realize that Tesla will simply pay the bonds in cash.

Thought the same thing after reading that comment, but choose not to risk the self-forfilling prophesy. So now it's out there, lets' talk about it.

This motivation is entirely possible, and I think its the main reason Tesla should pay off their convertible bonds ASAP. Not just the Q4 ones, but the Mar 2019 bonds too. Let's take them off the table, and out of play. Our turn to move the goal posts.

Cheers!

 

[neroden]

LOL...Never said that. But if you read the reports from high mileage Model S owners some have had multiple motor replacements and a few have had pack replacements (all for free under the unlimited mile warranty). No one outside Tesla knows what the cost of a Model 3 motor or pack replacement will cost. I can get an ICE motor or transmission replaced with a rebuilt unit in less than a week for a couple thousand dollars at worst.

The only report I have read on the cost of a battery pack was from a guy who somehow destroyed the pack in his Roadster by leaving it unplugged for six months in storage and Tesla wanted $32,500 plus labor.

Donn, since you don't do your research, I'll be nice for once and tell you the results of mine.
(1) The motor/drivetrain costs under $5000 (probably a lot less, may be more like $2000). Drivetrain replacements were due to a *design issue*. There have been no reported drivetrain replacements since the "P" revision was released in late 2016.
(2) There have been very few S/X battery replacements. The battery pack is expensive, but very few of them have trouble. More of the Roadster batteries had trouble (they're a much older design), but for most of them, not until 10 years were up -- and some are still fine after 10 years. The S/X battery pack failures seem to be due to either (1) the main contactor issue, which is resolved with current packs, or (2) idiosyncratic build problems with individual packs. They are not widespread.

 

[neroden]

Sorry, i must have missed it in todays multiple pages of posts. Why are we down so much today? I didnt see a specific story or tweet. If it was said already, apologies and can you point me to the post?

There is no reason. First rule: there's usually not a reason, it's usually just noise.

It looks like the usual shortseller/FUD tactics have worked. Short interest isn't increasing but they've spooked the weak longs into selling. Well, I guess this gives the shorts a chance to get out. The smart ones will take it.

 

[Smokey4141]

Smokey, why do you post at TMC ? Not a rhetorical question. It makes little sense.

Good question... I'm starting to wonder myself...
Initially, I just wanted to send a few supporting notes to a couple of people that seemed like they were fighting an uphill battle...
Seems like there is such a "determined" effort to see information just "one way, and one way only" here, and like I said, at least a few people were trying to point out both sides to a situation... And I wanted to support them...

But, I kept seeing things being said, or information that was just plain wrong, and there's real people, with real dollars, here...
And decisions being made with only one part of the story, is not a good way to invest... Makes no sense to me...
I'd think someone would want to know the good, bad, and indifferent, to ANY investment...
I'm trying to at least present another side to some things I see that I disagree with, but, as you've noticed, it's not received well...
I don't care if people disagree with me, it helps me to revisit my thoughts...
What seems odd to me is, why other people don't seem to look at differing opinions the same way...
And that's clearly a flaw of mine..

Anyway, good question... Thank you...

 

[neroden]

Okay, here are my levels that I am tracking towards:
As I've said all along, a re-test of the April ~244$ is warranted and coming. Note, that is also basically the 2017 low. so, somewhere between 240-245$ HAS to hold for a nice double bottom to be formed. My current buy is set at 246.50$ for 5% of the position. As we move UNDER 243.75$, I'll add another 10% of the level. then wait.

A move UNDER 239$ starts a move down to 220-225$ (YES, you read that right!). I don't see the $GS target of 210$ really realistic with all the changes, releases and moves toward profitability in the not TOO distant future. An over two year low of 185$ (not in adjusted terms) would require a significant macro event (global GDP, significant acceleration of rates above 3.35% US/10, all out China trade war, etc) or some NEW signifiant issue directly at Tesla (Musk out as CEO, board members quitting, not being replaced, M3 orders dropping, etc).

At an adjusted level the two year 185$ level COULD trade around 220-225$ today (which ISN'T good, but represents value to new $$ coming in for either a trade or longer term objectives). From there, something like the 330/340 calls for Feb trading at 2% could represent a nice hedge against a long position. I might move to do a 320/360 call spread in there.

Interesting.

My fundamentals models, even if Musk is banned from being CEO (which I still consider *highly* unlikely), say that $220 is a *steal* of a price, so I'd probably have to overinvest substantially if that actually happened. You know, barring *industry-specific* bad news -- nonsense like US-China relations or interest rates would not affect it, but "BYD e3 outsells Model 3, comes to US" would affect my model.

 

[NikeWings]

Yes, because of the utterly arcane "consolidation" rules of US GAAP.

I've seen them with very large put *and* call positions simultaneously. Does Susquehanna International Group do complicated spread trades, perhaps?

Highly likely.....global quants founded by a Cato Insitute guy and a few others outside Philly. They are also one of the 2017 Series B investors in WM Motors Tech in Shanghai along with Tencent et. al.

 

[shootformoon]

Full Macquerie Investment Report : teslamotors
This is the full report

 

[Mobius484]

Neroden, you should get sleep more often. You seen super sharp and on point right now..... I’m getting tired from fighting for truth all day.... Elon’s mom has been on a rampage!

 

[Artful Dodger]

Joe Rogan Experience - Elon Musk interview now has 15M views
(as of 9 PM PDT Oct 8, 2018)

Details:
15,000,133 views,
355K likes,
7.5K dislikes,
98% Likes.
48:1 approval

Still getting 1,500 views per hour right now, 33 days since release.

 

[Smokey4141]

This kind of price action is surely only driven by one of three things:
1) massively increased short selling
2) generalised sell-off
3) 1 or more large institutional holders trimming or exiting their position

Seems to me that we're looking mainly at at number 3, with possibly a bit of 2 (don't know that there's much evidence of 1 in a big way?). It's impossible to know why an institution might make that decision but it's a stretch to say it's definitely because of a tweet that Elon made last week or last month. It's just as easily because a given fund has a new manager with a different focus (i.e. Fidelity), or maybe Tencent need to liquidate to release some cash due to private sector liquidity squeeze in China. None of us know.

Given that many other large holders (and small!) may already be capped out on how much they want to put down on TSLA at this time, I wouldn't be surprised if the price action is fairly depressed for a while. The idea that Elon announcing he's quitting Twitter would lead to an immediate 20% price increase seems totally off to me. What you need is enough positive execution on the business plan that more institutional / strategic investors enter the fray in a serious way. Which may or may not be accompanied by a reduction in short interest.

None of which makes these prices any easier for retail investors with a 12-month or shorter view. And is exactly why you should only invest what you're prepared to lock away for a long time and try not to become too over-concentrated on any one stock. We'd all rather see a sea of green when logging into our brokerage accounts but if you still believe in the long term fundamentals, then that will come in time.

Good post...
I'm going with #3...
A bit of #2 as well, as interest rates go higher, money's getting tighter...
And I don't think #1, so much, because shares available to sell short are actually going up the last few days, at brokerages...
That said, most of the large shareholders (who seem to be liquidating) also have a large amount of options - no doubt to protect those positions.. Can't really track all of those... :-/

 

[MarcusMaximus]

Just remember, it's not a lie if you believe it's true.... ;-)

And I have no idea what you think I "lied" about, but whatever...
Since the mods delete my posts if I try to point out anything contrary to the popular view, I don't really care any longer. Think whatever you want..

This is like the 5th or 6th time I’ve seen you say something along the lines of “I don’t care anymore” or “I’m done with this”. If you’re done, be done. If not, quit saying you are. Not an advice.

 

[MarcusMaximus]

It’s been so long since i’ve had to buy gas I stopped paying attention. But I was pretty shock to see the price at $4 today.

Hadn’t noticed gas prices in CA, but saw $3 a gallon last week on my vacation in Philly. Felt super weird having to go to a gas station and pay to fill up.

 

[sundaymorning]

Source?

$680 million China financed loan for shanghai factory now or later doesn’t matter to me. What matters is that Tesla can raise at will.

Full Macquerie Investment Report : teslamotors
This is the full report

A good read, I’m glad to see this positive report, especially regarding the estimated $500-600 million in ZEV credits in 2H of 2018 (author admits he could be low balling).

 

[Artful Dodger]

Tesla has a great product. Anyone notice the gas prices lately? $4 a gallon in Southern California. Anyone care to guess when it’ll get to $5?

Tesla's Battery In South Australia Breaks Stranglehold Of Natural Gas Industry | CleanTechnica

I don't know about $5/gal, but I'll hazard a guess when gas will hit $1/gal: when EVs reach 50% of the annual mileage of ICE cars.

And yes, that could be done with 20% of the fleet running 4x the mileage each.

 

[neroden]

Absolutely. Does anyone here remember about the Uber CEO incident with the cab driver? No, and the guy was forced out over it.

I remember it. At the time, Kalanick (Uber CEO) was also implicated in failure to address a company-wide sexual harassment issue, the scandal where Uber was covering up rapes committed in Uber cars, the business of defrauding its drivers of the money they were owed, the illegal programming in the app to *avoid picking up police and city inspectors*, and that was *all at the same time*. While they were operating in violation of many cities's laws and being banned from entire cities, like London.

On top of which, they'd lost the entire Chinese market (given up on it, sold off their Chinese division) -- and Lyft had cloned their entire business model, but without the rapes, sexual harassment, or lawsuits over cheating drivers out of their pay.

The fundamentals didn't look so good (and still don't) for Uber.

Months or possibly weeks from now everyone may even forget about 420 hell. Right now things are looking really good for Model 3. The ramp is healthy, we’re cash flow positive in my opinion, and we should be adding at least a couple hundred million to the $2.2 billion reserves.

Yeah, there is nothing remotely resembling Uber about the situation at Tesla.

But you're right that most people have short attention spans and don't really dig into the details of anything.

 

[Smokey4141]

This is like the 5th or 6th time I’ve seen you say something along the lines of “I don’t care anymore” or “I’m done with this”. If you’re done, be done. If not, quit saying you are. Not an advice.

That is a good point... I was hoping to open some minds, but that seems pretty well shutdown...
Hopefully all you guys won't ride it all the way to $0, but some seem determined to...
Time to take a break...