TSLA Market Action: 2018 Investor Roundtable

[tivoboy]

I know everybody is operating on the premise of the tax credit remaining unchanged, as it's always easiest to assume the status quo. But I really doubt this premise. Neither political party likes the status quo, where the credit is evolving into a "federally subsidize non-US manufacturers" programme.

There's no agreement on exactly what the best solution is - ranging from "Full repeal and added tax on EVs" to "Renew, reform and expand the EV credit for years to come". But I find some sort of negotiated solution highly likely.

Ah Krey, I remember my days in Iceland, hiking around, enjoying the air, people, drink. I was basically high most of the time just on the air and energy. (not TECHNICALLY high mind you)... I miss it, really. All those overnights in Reykjavik to refuel.

Here in the USA, we're basically on the brink on a new civil war (we're already there, people just haven't ACTUALLY taken on the guns yet). If they EXTEND the tax credit to just TESLA (it would be soon for GM too) it looks like a hand out, bail out, etc. Not to MENTION most of these EV cars are sold on the COASTS - where apparently all the evil people live. I know, CRAZY right? But, sadly it's a thing. The current admin and congress just basically gave the middle finger to these "coasts" by taking away the SALT taxes (I'm sure YOU of all people know what that is exactly, but if not google it)..

Not to mention the fact that the EV (and ZEV) tax credits don't benefit the fossil fuel industry really at all. WHY on earth would we - currently - want to do anything that didn't benefit the fossil fuel industry going forward?

Depending on what happens in the first week of Nov, we could see the AMOUNT of cars to be sold with a tax credit increased a TINY amount (but I doubt it now), but if things go the other way I think we might actually see it removed entirely. Interesting times.

By the way, my Icelandic is a bit rusty at the moment, so just for clarity most if not all of this is sarcasm.

;-)

 

[theschnell]

You mean Elon time like "GAAP profitability in 2H 2018" and "20% margin on Model 3 achieved in Q4"?

I am a bit worried, though. I ideally want both air suspension and the tow package. We know they're in the middle of at least testing the tow package. If I lock in and they release one or the other, will I be unable to add it? I figure Iceland is pretty far down their deliveries priority list....

Can you tell me where they promised tow package on the 3? They still don't offer it on the S, why would they offer on the 3? Or do they offer it on the S in Europe?

Edit: deleted accidental post that I had drafted and did not intend to post.

 

[anthonyj]

Sold off my 420 (lol) shares @ $305... originally bought at $380 after the tweet and I’m up $20k in total because I bought calls at the dip. With that $20k this is what I’m holding as a Hail Mary.

I’m just so glad to be in the green. I might soon regret selling my shares and options, but I have to say, this was the most stressful two months of my life... was down $70k at one point last week.

 

[Remus]

I can't speak for anyone else, but my view has always been that a good Q3 result won't make volatility go away because Tesla's opponents will insist that it was a one-time thing or a manipulated result. Q4 will make it much harder on them, making them purely result to theories of demand erosion, Tesla killers, and a belief that GF3 is a myth. Each quarter that passes will erode these theories.

So long as Q3 remains volatile, one should still sell on highs and buy on lows, on the premise that there will always be someone to FUD/short it down if it gets too high.

Although I mostly agree the volatility won't go away but I don't think we need to wait for another quarter before we see another climb up from here. Large institutions will begin to accumulate soon, they will be careful not to cause price spike, but when news are out, that is another story.

Face it, nearly 900 mil free cash flow caught everybody by surprise, including us here. Put in perspective, members of this forum are the most informed when it comes to Tesla's financials. If we are pleasantly surprised, what about others? Plus it is easy for us to accept this fact because this information confirmed and strengthened our belief. What about those people who have been selling us cheap shares in the past several month?

From twitter, it is pretty apparent the shorts are in the first stage of grief: denial. You know, to write something truly convincing you have to believe it first. I guess the shorts peddling false information are true believers of their own koolaid. When the earning report completely destroyed their world view, it will be painful and slow for them to go from denial to anger to...

And there are institutions who sold in the past month or so. It will take a while for them to admit mistake and change courses.

Profits are not all created equal, last time Tesla used all kinds of tricks to get to a profitable quarter. This is different. Even with ASP going down in the 4th quarter, it is very difficult to see Tesla going into red again. I think this report alone already removed all doubt about whether Tesla can pay its bills. And that was the gist of bear thesis.

Another surprise is Elon's behavior on the earnings call. He refuses to give any aspirational goal, only said things alone the line of this is something we are working on, we achieved this, which will make it easy for us to do that. Some of us even find it boring, some has negative interpretation of this. But this is what large investors want.

fasten your seat belt and enjoy the ride, I bought tuesday at 276, yesterday right before closing at 289, and about another ago at 304.

 

[sauce]

Correct me if I'm wrong but Ford's surprisingly good Q3 results may be a good thing in that it would help suppress the narrative that import duties are weighing too heavily on automakers and could be a catalyst for a recession scenario.

In this context the general sentiment as to where the economy heads could add weight to TSLA's Q3 results and Q4 expectations as well since some bears are implying Model 3 demand could dry up with a supposed recession coming up.

Obviously that claim is a stretch but it should not be unreasonable to believe Tesla would endure its own share of pain in the context of a recession.

In other words, if general volatility of the markets ease up a little with good results from legacy automakers this adds fertile soil for TSLA's performance as well. Short term.

 

[Foghat]

Thank you Elon and Team Tesla. Keep up the mission.

 

[EVNow]

I don't understand why people are so focused on the shorting. What about the longs ?

Why isn't there a few billionaires/institutions pouring hundreds of millions/billions of dollars of their capital into Tesla right now ?

That's a point not enough of people here are focusing on I think.

The funny thing is - shorts who want to initiate positions want the stock to be high. Longs when initiating the position want the stock to be low.

But once they take the position, longs want the stock to be high and shorts want it to be low.

 

[tivoboy]

Sold off my 420 (lol) shares @ $305... originally bought at $380 after the tweet and I’m up $20k in total because I bought calls at the dip. With that $20k this is what I’m holding as a Hail Mary.

I’m just so glad to be in the green. I might soon regret selling my shares and options, but I have to say, this was the most stressful two months of my life... was down $70k at one point last week.

If we rally in the next couples days weeks, I'd exit that dec 385$ call. Just sayin, it's your most solid bet.

 

[Unpilot]

I hearby award a badge of honor to anyone that has kept up with this thread for the last week.

A special citation if you DID NOT click on any link to Yahoo or Bloomberg or SA.

 

[UnknownSoldier]

I hearby award a badge of honor to anyone that has kept up with this thread for the last week.

A special citation if you DID NOT click on any link to Yahoo or Bloomberg or SA.

Just do what I do, skip to the last page and start reading from there!

 

[hobbes]

You mean Elon time like "GAAP profitability in 2H 2018" and "20% margin on Model 3 achieved in Q4"?

I am a bit worried, though. I ideally want both air suspension and the tow package. We know they're in the middle of at least testing the tow package. If I lock in and they release one or the other, will I be unable to add it? I figure Iceland is pretty far down their deliveries priority list....

Yeah.. I am wondering about the availability of CCS charging and Long Range RWD.

 

[humbaba]

I know everybody is operating on the premise of the tax credit remaining unchanged, as it's always easiest to assume the status quo. But I really doubt this premise. Neither political party likes the status quo, where the credit is evolving into a "federally subsidize non-US manufacturers" programme.

There's no agreement on exactly what the best solution is - ranging from "Full repeal and added tax on EVs" to "Renew, reform and expand the EV credit for years to come". But I find some sort of negotiated solution highly likely.

I recently discovered that there is already an EV tax where I live. So when I buy an EV I will pay more every year in taxes than if I spent the money on a legacy vehicle. It is absolute nonsense for me to be subsidizing the ICE vehicles, it should be the other way around. This is an area I would like, but do not expect there to be, federal legislation on.

You may be right that GM will cajole congress into giving them relief, but I suspect the end result will be a protectionist repealing of the current EV tax break and passing something that gives money to GM -- quite possibly a tax payer subsidy directly to GM for EVs they sell or produce. And our congressmen are quite adept at targeting language so they won't have to say GM vehicles, it will just de facto be GM vehicles.

 

[tivoboy]

Correct me if I'm wrong but Ford's surprisingly good Q3 results may be a good thing in that it would help suppress the narrative that import duties are weighing too heavily on automakers and could be a catalyst for a recession scenario.

I.

Uh, not sure which call or earnings you're referring to but in the yesterday call Ford has said very clearly that import duties (metals especially aluminum) have cost it nearly 1 BILLION in profits. So, it's a thing. They also said, that for their profitability at least, if it doesn't resolve it's only going to get worse for them and other domestics.

 

[Dan Detweiler]

Ah Krey, I remember my days in Iceland, hiking around, enjoying the air, people, drink. I was basically high most of the time just on the air and energy. (not TECHNICALLY high mind you)... I miss it, really. All those overnights in Reykjavik to refuel.

Here in the USA, we're basically on the brink on a new civil war (we're already there, people just haven't ACTUALLY taken on the guns yet). If they EXTEND the tax credit to just TESLA (it would be soon for GM too) it looks like a hand out, bail out, etc. Not to MENTION most of these EV cars are sold on the COASTS - where apparently all the evil people live. I know, CRAZY right? But, sadly it's a thing. The current admin and congress just basically gave the middle finger to these "coasts" by taking away the SALT taxes (I'm sure YOU of all people know what that is exactly, but if not google it)..

Not to mention the fact that the EV (and ZEV) tax credits don't benefit the fossil fuel industry really at all. WHY on earth would we - currently - want to do anything that didn't benefit the fossil fuel industry going forward?

Depending on what happens in the first week of Nov, we could see the AMOUNT of cars to be sold with a tax credit increased a TINY amount (but I doubt it now), but if things go the other way I think we might actually see it removed entirely. Interesting times.

By the way, my Icelandic is a bit rusty at the moment, so just for clarity most if not all of this is sarcasm.

;-)

Oh PLEASE!

We are NOT on the brink of a civil war. Can't stand by and listen to that drivel without comment. We have two political parties that continue to struggle for power just like they have for the last 100+ years. Like it or not, it is the way the American political system works. The party in power tries to stay there and the party not in power screams, yells, calls fowl every chance they get to regain the power. Both sides of the isle have done it for decades. It's nothing new. I would guess you probably didn't live through the sixties. We are nowhere near civil war.

Continue with your regularly scheduled market watch.

Dan

 

[ZachF]

Posted this in Luv's thread, but I'll repost it here:

It's funny when you have the shorts telling you to buy GM and sell Tesla because of debt and cash flow...

Here are GM's financials:
Growth, Profitability, and Financial Ratios for General Motors Co (GM) from Morningstar.com
debt:
General Motors Co Total Long Term Debt (Quarterly) (GM)

GM has bloated it's debt by $80 billion since 2012, and burned $45 billion in cash since 2015! What does GM have to show for it? declining or flat revenue.... So what has it's used all that massive debt for? Dividends (~$3b/y), stock buybacks (~$4b/y), executive bonus compensation, and paying the interest/refinancing the debt it already has!!!

Going into debt at 6% for dividend payouts... This company is a disaster.

Most other companies aren't much better. Ford has $155+ billion in debt, more than it's revenue now, It has a pretty good FCF of $10b/year, but that all goes to debt payback (which is still not enough to keep it from growing faster than revenue) and the giant dividend to keep the Ford family happy.

Both VW and Daimler have had a total FCF since 2011 of about -$60 billion. lol.

Meanwhile, take a look at Tesla:
Growth, Profitability, and Financial Ratios for Tesla Inc (TSLA) from Morningstar.com
Tesla Inc Total Long Term Debt (Quarterly) (TSLA)

2018 and 2019 are estimates, if they use about $2b in FCF to payback debt:

year, revenue, debt, FCF:

2012: $413m $452m -$505m
2013: $2,013m $586m -$6m
2014: $3,198m $2,488m -$1,027m
2015: $4,046m $2,696m -$2,159m
2016: $7,000m $7,128m -$1,564m
2017: $11,759m $10,310m -$4,142m
2018: $21,800m $10,400m $400m
2019: $33,000m $8,400m $2,000m

In short (lol) Tesla will have gone from a point of having large negative cashflow and debt larger than revenue, to a company with large cashflow and low (25% of revenue) debt in just 2-3 years. A complete turnaround and total refutation of the short FUD.

 

[Boomer19]

If Tesla now has access to low-interest local debt at the site of it's future Gigafactories (make it a requirement in the bidding process) then what's to stop Tesla from using, say, half a billion dollars per quarter in a share buyback program? You know, to swallow up the bullshit shorting?

Tesla isn't *obligated* to grow at max possible rate. But it is essential to thrive. That'll be better for the planet longterm.

Anyone ? Bueller ?

growth, not buybacks
short interest will always be present.

 

[Cherry Wine]

Sold off my 420 (lol) shares @ $305... originally bought at $380 after the tweet and I’m up $20k in total because I bought calls at the dip. With that $20k this is what I’m holding as a Hail Mary.

I’m just so glad to be in the green. I might soon regret selling my shares and options, but I have to say, this was the most stressful two months of my life... was down $70k at one point last week.

That is a lot of OTM buys! Do those normally pay off? I bought some deep OTM Jan19 calls and I'm regretting it. A (fairly) inexpensive lesson, I feel.

 

[anthonyj]

If we rally in the next couples days weeks, I'd exit that dec 385$ call. Just sayin, it's your most solid bet.

Absolutely will take some profits along the way. Thank you.

 

[njzimmic]

SOLD SOME SHARES.... hopefully it goes down some below $300?

 

[tivoboy]

I recently discovered that there is already an EV tax where I live. So when I buy an EV I will pay more every year in taxes than if I spent the money on a legacy vehicle. It is absolute nonsense for me to be subsidizing the ICE vehicles, it should be the other way around. This is an area I would like, but do not expect there to be, federal legislation on.

They've talked about that here in CA as well (I think they might have actually already approved it, but maybe not implemented it). The logic being that so much of state DOT revenues are based on gas taxes, and with no gas taxes being paid for by EV drivers - then no tax. It's clearly true that if EVERYONE moved to an EV and that was the financial model to pay for DOT road upgrades, repairs, etc, we'd ALL be screwed for sho.. So, something will have to change in the future as the percentage of EV vehicles on the road move from 1-2 to 4 to 8% of the overall vehicles.

At least here in CA I think it was only something like a 125$ additional fee on the annual registration. Not TOO big a deal.