TSLA Market Action: 2018 Investor Roundtable

[tsunamiofhurt]

Jotted down a list of things I'm keeping an eye out for over the next 3-6 months. What's missing?

Production / Product:

• Reaching 6-7k / week Model 3s
• Opening of Model 3 orders for Europe/Asia (expected ~December)
• Batch registrations of European VINs
• Standard Range production (expected ~late Q1)
• Installation of new Panasonic lines at GF before EOY target
• Any signs of buildout of vehicle manufacturing GF 1
• China GF developments / GF4 announcement
• Additional product announcements via Elon's continued public appearances (e.g. RTL podcast in the next couple weeks)
• Model Y unveil (March 15, 2019) ... maybe an early pickup-prototype too

Energy:

• Utility-scale mega-pack
• Supercharger v3 / mega-chargers
• Solar roof ramp (~H1 '19)

Software / Autopilot:

• FSD features and other updates to v9
• Rollout of HW3

Financial / Other:

• S&P 500 inclusion (after Q1 / Q2 results, maybe)
• Repayment of $800M $359.87 convertible bond (March 1, 2019)
• Resolution of DOJ inquiry
• Appointment of two new independent directors
• Legislative developments on federal tax credit extension bill

 

[EinSV]

Jotted down a list of things I'm keeping an eye out for over the next 3-6 months. What's missing?

Production / Product:

• Reaching 6-7k / week Model 3s
• Opening of Model 3 orders for Europe/Asia (expected ~December)
• Batch registrations of European VINs
• Standard Range production (expected ~late Q1)
• Installation of new Panasonic lines at GF before EOY target
• Any signs of buildout of vehicle manufacturing GF 1
• China GF developments / GF4 announcement
• Additional product announcements via Elon's continued public appearances (e.g. RTL podcast in the next couple weeks)
• Model Y unveil (March 15, 2019) ... maybe an early pickup-prototype too

Energy:

• Utility-scale mega-pack
• Supercharger v3 / mega-chargers
• Solar roof ramp (~H1 '19)

Software / Autopilot:

• FSD features and other updates to v9
• Rollout of HW3

Financial / Other:

• S&P 500 inclusion (after Q1 / Q2 results, maybe)
• Repayment of $800M $359.87 convertible bond (March 1, 2019)
• Resolution of DOJ inquiry
• Appointment of two new independent directors
• Legislative developments on federal tax credit extension bill

Nice summary! I would also add:

• storage reporting positive margins in H1 -- Elon estimated 20% by Q1 IIRC
• possibly more "brand name" investors jumping in to join Larry Ellison, Baillie Gifford, Baron, Ark, etc.
• continued OpEx reduction as percentage of revenue
  
• Model 3 gross margins improving even with SR rollout
• Storage continuing to ramp (3X MWh deployed in 2019 v. 2018)

 

[neroden]

I got a call last week wanting to help me find "the best rate plan for my Model 3"? I'm guessing they would have tried to suggest Tesla installed solar as well? After he got two sentances in and I could get a word in edgewise I informed him that although there are many plans available in Texas, in my city there is only the local power company (Garland Power & Light) with only one rate plan (* actually a lie, they JUST added a second plan that is $0.01/kWh more expensive but is all "green" energy), and that I already know they can't provide me solar (I can get solar, but previously SolarCity wouldn't do it because of the utility specific hoop jumping / lack of net metering and AFAIK Tesla still hasn't changed how they're doing things to bother with my local utility's limitations - maybe things have changed, but right this second we're not in the market for solar because reasons)

Tesla has a history of having frontline staff members who have NOT been given the information on the local regulatory situation. It's wasteful and stupid. They should have someone look up all the local regulations and put it into a little handbook for their frontline staff members, but they didn't. This means their frontline staff members waste a lot of everyone's time because they don't know how cars are registered in NY (or Connecticut, or Massachusetts) or don't know the rate plans in Garland, or whatever...

 

[neroden]

Anyone have interoperation of the reason JB exercised then sold 15k options, and at the same time gifted 20k stock to charity?
Anything we should be worrying about? He still holds 306k though.

JB wanted some cash to spend on fun. And he has a charity he wants to help out by donating TSLA stock before it gets more valuable.

 

[neroden]

I am not a member of a political party and what I have stated are not "talking points."

What you have stated are Republican party talking points. They're distributed as propaganda for the purpose of fooling people like you. It's sad that you've fallen for them.

A progressive tax is simply a tax that increases in percentage as income levels rise.

Right. So, the US system doesn't do that. This is simply a fact.

Take someone who earns $200,000 a year from working at a job, look at her tax rate.

Then take someone who collects $500,000 a year from qualified dividends, look at his tax rate.

The tax rate on the person collecting $500,000 a year (from qualified dividends) is lower. The tax rate on the person earning $200,000 a year (from a job) is higher. This is easy enough to check. Run it through your favorite tax program. (Including Social Security and Medicare and the standard deduction, for a single person, the overall average tax rate ends up being roughly 28.6% for the salary-earner and 15.7% for the dividend-collector.)

You've fallen for a scam, and it's sad.

The US tax system is highly progressive, one of the most progressive in the developed world. That is a simple factual statement.

It's what's known as a "false statement".

 

[SpaceCash]

Food for thought:

In the VW/Porsche short squeeze of 2008, 13% of the stock was sold short. The stimulus for this squeeze was a realization that 94% of the float was owned or controlled through call options

 

[Carl Raymond]

Mine is when interest rates are going to hit 3,5-4%.

Way too many companies are over leveraged and their customers are also dependent on credit to make the purchases. When credit is going to become too expensive, they will cease to buy. Companies will have less demand, won't be be able to invest, fire staff, .. recession.
------

But that's just my opinion.

Horse or cart? The fed raises rates to ease inflation pressure. Oil price rise will always jack the inflation stat. Traditionally, oil adds 6% to the cost of everything, and I think that's a conservative figure. Just people existing, eating food where every joule cost 10 joules of oil has an oil cost. For meat it's 100 to one.

People forget that the laws if physics apply to economics. It's still at rock bottom an energy equation.

I stand by my assertion that a cleantech boom will be like no other, with no oil price wall to hit. It's a singularity, coming soon.

 

[JRP3]

I can empathize with everyone who says "don't get too excited, Tessie is volatile and people have called for the moon a million times", but you guys are actually incorrect/missing the picture now. 3Q was a gamechanger and these levels are ridiculously low; this SP is at a basement, jokes level right now.

I can't remember how many times I've seen similar posts over the years.

 

[graphix25]

Financial:
Pay off $230m and $182m in Q4 convertible notes and term loan due Nov/Dec respectively.
March 2019 Convertible Notes is $920m paid off or converted into shares option if stock price is above $359.87.
S&P inclusion likely will not be till 2nd half of 2019
Shorts double down at $360+ to play the long term range and get crushed in early 2019.
$420 stock price secured after q4 earnings
A sneak attack Q4 earnings announcement like they did in Q3, 2 days notice.

Jotted down a list of things I'm keeping an eye out for over the next 3-6 months. What's missing?

Production / Product:

• Reaching 6-7k / week Model 3s
• Opening of Model 3 orders for Europe/Asia (expected ~December)
• Batch registrations of European VINs
• Standard Range production (expected ~late Q1)
• Installation of new Panasonic lines at GF before EOY target
• Any signs of buildout of vehicle manufacturing GF 1
• China GF developments / GF4 announcement
• Additional product announcements via Elon's continued public appearances (e.g. RTL podcast in the next couple weeks)
• Model Y unveil (March 15, 2019) ... maybe an early pickup-prototype too

Energy:

• Utility-scale mega-pack
• Supercharger v3 / mega-chargers
• Solar roof ramp (~H1 '19)

Software / Autopilot:

• FSD features and other updates to v9
• Rollout of HW3

Financial / Other:

• S&P 500 inclusion (after Q1 / Q2 results, maybe)
• Repayment of $800M $359.87 convertible bond (March 1, 2019)
• Resolution of DOJ inquiry
• Appointment of two new independent directors
• Legislative developments on federal tax credit extension bill

 

[SpaceCash]

I can't remember how many times I've seen similar posts over the years.

Ok? I guess the post applies to you best, then. Surely you can read/appreciate a 10Q

 

[graphix25]

 

[neroden]

I assume the reason he gave stock to charity is because he wanted to make a significant donation. If you have long-term capital gains, giving away the stock has serious tax advantages. Here's an extract of something I wrote for a non-profit to give to some of their higher value donors.

But the IRS likes charities and has an even better benefit. If I just give the stock directly to the charity, without selling it first, the charity will send me a letter saying that the value of the stock was $990, and I still get to deduct that whole amount from next year’s income. But I never sold the stock, and don’t owe any capital gains tax! So I’m $105 better off than selling the stock and then donating the money. In case you’re wondering, this is perfectly legitimate and was the intent of the law.

It's interesting if you really know how this works.

As with any other gift, the charity takes over the "cost basis" (purchase price) which you have, and when they sell the stock, they realize capital gains, and they would pay capital gains tax on that...

...except that most "public charities" pay no income tax except on "unrelated business income", which this doesn't count as. Many private foundations have an "net investment income excise tax" rate of 1% or 2% (depnding on classification), but that's still far less than a wealthy individual would pay in capital gains at the 15% or 20% rate.

(If you're in the 0% capital gains bracket and giving to a private foundation, however, you should sell the stock and give them the money.)

JB is sitting on $330 capital gains for each share of that $20 stock.

And when the charity sells the stock, they will report it as income. But then they won't pay any tax on that income. (Unless they're a private foundation, in which case they will pay 1% or 2%.)

 

[Carl Raymond]

I can't remember how many times I've seen similar posts over the years.

No, those prior year comments were different. They were prior to Tesla reaching escape velocity - profitable every quarter going forward.

A story stock is fundamentally different to a stock whose value is measured on financials.

Fundamentally different now.

 

[neroden]

Unfortunately the very magic that works the wonder of evolution is also killing you slowly. Your DNA changes over time. Chance of cancer gets higher with age.

Among other things. We'd have to figure out how to reactivate the telomere repair mechanisms, which don't work in humans (or most mammals) though they exist in some other lifeforms. That's just for starters.

That said, this is far more realistic than transferring your consciousness into another body; there is very strong evidence that your consciousness is an emergent feature of your exact physical structure, and can't actually be transferred in any way.

 

[Artful Dodger]

What's missing?

Maybe more on the Tesla Energy side:

• wasn't there a Powerwall v3 rumor, to include direct solar EV charging?
  
• 2 GWh utility scale battery in N. California
  
• $2B Saudi solar project (speculation; not from a Tesla src)

BTW, love the list. Excellent work!

Cheers!

 

[neroden]

My own little master plan had one major flaw that I didn't foresee:
If I I'm going to sell out right at the time when the stock price is starting to enter the steep part of the S-curve, I'll probably look back after three years to the most expensive car ever bought.

There are a few people who sold all their TSLA recently to buy a Tesla. Yeah, "most expensive car ever" might be accurate....

If you're a risk-taker, I suppose you could borrow against your TSLA to buy the car.

No, Sirs and Madams, I'll rather finance the maximum amount and hold tight to my stocks!

...which I see you are going to do

 

[neroden]

Horse or cart? The fed raises rates to ease inflation pressure. Oil price rise will always jack the inflation stat. Traditionally, oil adds 6% to the cost of everything, and I think that's a conservative figure. Just people existing, eating food where every joule cost 10 joules of oil has an oil cost. For meat it's 100 to one.

People forget that the laws if physics apply to economics. It's still at rock bottom an energy equation.

I stand by my assertion that a cleantech boom will be like no other, with no oil price wall to hit. It's a singularity, coming soon.

OK, I like your thoughts, BUT....

.... a lot of previous recessions had nothing to do with the price of oil or energy. In fact, 19th century recessions were generally triggered by other things -- oil wasn't a thing yet, and they *weren't* triggered by coal shortages.

There are different types of recessions. Most of them are triggered by a shortage of money, as John Maynard Keynes explained. Most of these are simply high-interest-rate recessions. But some of these are more severe, "creditworthiness" recessions. This category includes 2008 and 1929, both of which featured critical events in which stuff which people thought of as "money" ("call money" in 1929, "money market funds" in 2008) were suddenly not thought of as "money" any more.

Some are triggered by shortage of a real good, such as oil -- this includes the 1970s stagflation.

A cleantech boom should be very similar to a 19th century industrial-revolution boom. The growth rates in these booms were generally limited by availability of labor. Or more rarely by availability of skilled labor. The latter might be the case again now. Each industry's boom would generally end with market saturation (i.e. everyone's got a washing machine), at which point the industry would become what we now consider a "cyclical" industry

The 19th century recessions were generally caused by a shortage of money; due to the Free Banking system, this happened a *lot*. (It happens less with the Federal Reserve.)

 

[kbM3]

Anyone else wondering why Tesla is registering VINs at such a fast rate during the past weeks? It’s early November and they already seem to have enough for Q3. Unless they are up to something

I think I read about them basically designing multiple different styles of production lines simultaneously and kinda A/B testing them. Now they're probably running multiple styles of production lines concurrently/adding more lines. I'm pretty sure they are pumping cars out markedly faster than Q3

I’m wondering when production or deliveries are going to pick up. Hopefully soon. Troy’s sheet still shows ~4300/week.

I also noticed Electrek’s spy was silent this Friday with the normal production report.

 

[JRP3]

Ok? I guess the post applies to you best, then. Surely you can read/appreciate a 10Q

No, those prior year comments were different. They were prior to Tesla reaching escape velocity - profitable every quarter going forward.

A story stock is fundamentally different to a stock whose value is measured on financials.

Fundamentally different now.

Yes it's fundamentally different though they still have to prove it going forward. As always the shorts won't believe it until it happens.

 

[Starno]

Horse or cart? The fed raises rates to ease inflation pressure. Oil price rise will always jack the inflation stat. Traditionally, oil adds 6% to the cost of everything, and I think that's a conservative figure. Just people existing, eating food where every joule cost 10 joules of oil has an oil cost. For meat it's 100 to one.

People forget that the laws if physics apply to economics. It's still at rock bottom an energy equation.

I stand by my assertion that a cleantech boom will be like no other, with no oil price wall to hit. It's a singularity, coming soon.

Maybe, but I think it's a bit too soon :/
We're not yet at a point where there's enough switch to renewable energies. That's the problem. But I can see be true in a mid-term future. Maybe in 6-8 years.