TSLA Market Action: 2018 Investor Roundtable

[SOULPEDL]

OK, get ready for the end of day run-up on SP... Shorts threw their remaining stones and maybe saving a few in case of a tweet.

$325 by EOD.

 

[ZeApelido]

My boy Anton closed his short position.

Unfortunately he is still talking...inexplicably...about the Jaguar I-Pace

 

[S3XY]

The insane mind of the Tesla short, back on Video:

five00pagesaday

They have that idiot, we have Galli. The HyperChange Q3 Video was great.

Wow, LMAO during that whole video. Now I'm going to have to follow him so I can watch the slow meltdown, never admitting he was wrong, and blaming the government for not intervening on the fraud. Actually, near the end I expect him to say the deep state was in on it. Can't wait!

 

[loco]

No analyst (i am being generous in calling them that) thought to ask a single question on the financing of the china factory are they loans? Could they be grants? Are they subsidized interest rates?

This has been discussed during Q2 call.

James Albertine

Considering your growth you've identified in China with the Model Y, we believe also in the EU, it's been discussed a factory there. How do you plan to fund all of this growth without going back to the capital markets to raise funds?

Elon Musk

For China, I think, our default plan will be to use essentially a loan from the local banks in China and fund the Gigafactory in Shanghai with local debt, essentially. And we certainly could raise money but I think we don't need to and we ... yeah, I think, it's better to ... it is better discipline not to.

 

[Alphacrux]

OK, get ready for the end of day run-up on SP... Shorts threw their remaining stones and maybe saving a few in case of a tweet.

$325 by EOD.

Remember, the sock price was around $250 just a few days ago. I’m sure there’s been short-term profit-taking. Give it time..

 

[Unpilot]

My boy Anton closed his short position.

Unfortunately he is still talking...inexplicably...about the Jaguar I-Pace

I gotta hand it to you people..... going to those places and looking at that crap...can't/won't do it.

 

[Tslynk67]

Unlike @NicoV I went to bed last night, but did at least see the report and the AH price up nicely.

Has been a little bit less than one would have hoped today, I almost wonder if it wouldn't have been better if we'd had another macro blood-bath.

Regarding shorty shorts, marging-calls and squeezes, I think it's worth reflecting that only a a couple of months ago we were trading in the 350-80 range for a while, and this didn't seem to have much impact, so I don't see much changing right now either. We need accumulation.

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.

You bet your shiny ass, I have read every post, but not clicked many of the links...

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.

And most recently in a very hostile political environment too. As I said the other day, imagine if the US government was promoting green energy and EV's, imagine if there were no trade-wars, etc.

Another short seller is out:
View attachment 346911

Oh, *that* guy. Have stumbled across him on Twitter a few times, he used to lurk around MS and MBS (as in M BS Spiegel, not that Saudi bloke), lapping up all the BS and squirting it back out the other end.

I didn't realise he actually shorted, thought he was just a troll, I mean the crap he spouted you would never attribute to someone with a brain, never mind any money to "invest"

 

[beachbum77]

Life is about balancing probabilities with their consequences, and how willing one is to accept the risk-weighted negative consequences against the profits. For example, I could have thrown $200k in additional funds for my house into long-shot bets on Tesla to try to get a seven-figure net worth in short order. But the probability-weighted negative consequences are just way too high.

One has to balance their risk profile properly. This isn't pretend money we're playing with here. A person can be extremely confident in something and still end up wrong, or at least wrong within a given timeframe or wrong due to some sort of black swan.

Karen, your approach will help you sleep at night and live a LOT longer...

 

[Sancho]

And to top off a great day, I just picked up my M3. White/white. A beauty. Seat much more comfortable than MS and MX. I haven’t even driven it off the lot yet. I’m just blissfully enjoying the dawning of a new era.

I bet it drives well.

My new M3 does drive well!

Tesla’s gonna sell a million of these things.

Per year.

 

[Tslynk67]

Remember, the sock price was around $250 just a few days ago. I’m sure there’s been short-term profit-taking. Give it time..

You must be raking-it-in if you can afford socks at that price, respect!

 

[lunitiks]

You bet your shiny ass, I have read every post,

 

[BioSehnsucht]

I believe the UK market will be served from the European assembly factory in Tilburg (assuming there are no hard BREXIT shenanigans that will bomb the UK back into economic stone age), and Australia will be served from Fremont.

Saudi GF, even if it happens, will take quite some time to ramp up, and both the UK and Australia will get their first Model 3's in mid-2019.

Unless it has been / will be expanded, I doubt Tilburg can handle even the tax-dodging assembly that it does for S/X, for the volume needed for Model 3. I'm doubtful it can even act as a distribution point for those volumes, at the old (current?) size.

 

[winfield100]

load of BS
what’s the implication? they have only themselves to blame.

hint re beachbum77
probably doing research for hit piece on SlezekingAlfalfa number 63 and bouncing ideas off folks here
hint: ignore button for Donn Bailey

 

[TradingInvest]

It was 5 years ago, April of 2013. I was watching AAPL with intense interest: it dropped from $703 to below $390 in 6 months. I bought a lot of LEAPs at the bottom when it went below $390. My theory was that AAPL had very limited down side, cash on hand plus 2~3 years earning would be more than the market cap. So essentially getting the company for free (this is the simplified view, it's actually more complicated than that). And I knew that tech stocks can fluctuate a lot, once I recognize the bottom, the upside is at least 100%.

AAPL briefly touched $384, then rallied to $910 in 2 years. Now it's at $1540 (take out 7:1 split effect). Plus dividend.

The lesson I learned is that if I can recognize the bottom of a good company, the upside can be quite large.

Tesla has limited downside, significant upside.

 

[SOULPEDL]

I was watching PBS last night and wondering why not a Tesla story? So I had this idea...

I wonder how many people here would be willing to help create a story for them, and then even donate to become members? It would be like the "customer helping with sales" which brought tears to my eyes in the CC along with Elon. I'm choking up again...

 

[beachbum77]

I've been thinking about what this means:

"We are aiming to bring portions of Model 3 production to China during 2019 and to progressively increase the level of localization through local
sourcing and manufacturing."

What's the logical priority for China to complete first?

* Overhead. A factory is not just particular production lines, but all of the transport, utility, and other supporting infrastructure that the factory is useless without. Big focus for the next couple quarters.

* GA line. This is obvious - they have to complete the vehicles there to gain the local manufacturing benefits, so they need at least a single GA line. GA is also one of the production constraints at Fremont. Tesla demonstrated the ability to make a GA line in a matter of months with GA4. I expect a GA line to start up there shockingly fast - not Q4, but Q2-3.

* Paint shop. This is the other big bottleneck at Fremont. Tesla can divert BIWs straight to export to Shanghai. Wouldn't be surprised in the least to see a local paint shop open up in Q4. Maybe even Q3, but I'd bet on Q4; paint shops are pretty complicated and require a lot of fine tuning to get consistently good results.

AFAIK, Fremont has never been limited by stamping or plastics, and apart from one short period early on, not welding either. Giga seems to be capable of scaling easily and effectively indefinitely, so GF3 production of packs and motors is obviously not going to be a priority. But with a GA line and paint shop in Shanghai, they should be able to significantly expand their total global output.

Wouldn't be surprised to see Giga 4 construction starting much faster than people are expecting, using the exact same approach.

There's a reason Tesla has walked back focus on 10k at Fremont (I've noticed analysts keep missing this part): because they can start up production "not at Fremont" surprisingly quickly. Not full production, but it doesn't need to be. I see Tesla scaling Fremont to 7k/wk sustained by Q1/Q2, with future scaling Model 3 scaling focused first on Shanghai, then Germany. Whenever they can't squeeze more production out of a given line at Fremont without a significant capital investment, a corresponding line will be built at Giga 3 or 4 for it.

Karen, Even if Fremont ships BiW's to China to finish assembly, isn't there a parts tariff in place? I don't think Tesla could achieve much in savings if all of the major parts to complete the cars are shipped in from the U.S. It would make more sense to build another GA line in a tent at Fremont and ship those LR cars to Europe ahead of any China builds.

 

[WentOffGrid]

You might want to check on that plan. BIW needs to be painted to avoid rust. A 30 day ocean journey would be a problem for an unpainted car.

I think they would e-coat the BIW first. Then no corrosion issues.

 

[hobbes]

Unless it has been / will be expanded, I doubt Tilburg can handle even the tax-dodging assembly that it does for S/X, for the volume needed for Model 3. I'm doubtful it can even act as a distribution point for those volumes, at the old (current?) size.

Has been expanded in Sep 2018, but only by about 50% - this won´t suffice in the long run I guess.
Tesla sets up a new large facility near its European factory

 

[Artful Dodger]

All dominate modes have a finite epoch on this Earth
Now EVs bring Dinodämmerung for ICE
And Tesla is the Walküre
Das ist gut zu wissen

 

[MP3Mike]

It’s a flat year to make a new press line from scratch. There’s no way around it. Schuler (or whomever) needs to be building it now to be ready for Q419.

Isn't it possible that Tesla ordered a new press line months ago?