TSLA Market Action: 2018 Investor Roundtable

[MarcusMaximus]

So, Tesla and Elon decided to sell only 100K of its $100K MS+MX a year to solve the global warming issue? While leaving the rest of the ~90M car market, including the low mpg luxury large sedan market to Mercedes, Audi, BMW and others?

Absolutely correct. Tesla makes no other cars other than the S/X, whatsoever, and never plans to. It’s really remarkable that their earnings fluctuate so much given that they’re solely producing a set number of only those cars, with no other business, huh?

If only there was some other product they sold that could explain all of this..........

 

[Oil4AsphaultOnly]

Total volume was 3 million and typical is somewhere around 7. I think at these levels, nobody is taking a large position in either direction.

Some historical context if you don't mind a contrarian viewpoint. The historical trading volume (check Q1/Q2 2017) was "normal" at ~4-5 million shares (so 3 million is still low), 6-7 is on some big news (up or down), and the ~10 million shares traded was during the short-covering/fidelity-reinvestment weeks following the blowout Q3.

In other words, 7 million isn't normal, and 3 million isn't excessively low.

 

[ZachF]

Exactly! The logic in some arguments here are mind boggling. I wonder if people really think like that, or just pretend to be thinking like that on this forum.
So, Tesla is supply constrained for MS+MX, yet offers 1% interest loans in Norway while borrowing at ~5% with its junk bonds? Total loss is 16% over 4 years.

Uhhhh... Every car company does that homey. They all offer 1% (or less) financing and generally borrow in the 4-7% range.

Tesla now has one of the lowest debt/revenue ratios with the highest revenue growth rate. Also one of the lowest debt/OCF ratios now too.

EDIT: See below

 

[ZachF]

Here's what car companies will probably look like in 2019:

Tesla:
~$35b revenues
~$6b OCF
~$9b debt
Debt is equal to 3 months of revenue or 18 months of operating cashflow. Revenue is growing at >30% per year.
Growth, Profitability, and Financial Ratios for Tesla Inc (TSLA) from Morningstar.com

Ford:
~$155b revenue
~$16b OCF
~$160b debt
Debt is equal to 12 months of revenue of 120 months of operating cashflow. Revenue is not growing at all.
Growth, Profitability, and Financial Ratios for Ford Motor Co (F) from Morningstar.com


GM:
~$145b revenue
~$16b OCF
~$110b debt
Debt is equal to 9 months of revenue or 83 months of OCF. Revenue is not growing.
Growth, Profitability, and Financial Ratios for General Motors Co (GM) from Morningstar.com

Toyota:
~$263b revenue
~$35b OCF
~$170b debt
Debt is equal to 8 months of revenue or 58 months of operating cashflow. Revenue is not growing
Growth, Profitability, and Financial Ratios for Toyota Motor Corp ADR (TM) from Morningstar.com

VW:
~$263b revenue
~$8b OCF
~$160b debt
Debt is equal to 7 months of revenue or 240 months of operating cashflow. Revenue is growing by about 2%/year.
Growth, Profitability, and Financial Ratios for Volkswagen AG (VW) from Morningstar.com

Daimler:
~$186b revenue
~($7b) OCF (that's right, negative OCF)
~$89b debt
Debt is equal to 6 months of revenue and operating cashflow is negative. Revenue is not growing.
Growth, Profitability, and Financial Ratios for Daimler AG ADR (DMLRY) from Morningstar.com

BMW:
~$106b Revenue
~$7b OCF
~$89b debt
Debt is equal to 10 months of revenue or 153 months of OCF. Revenue is shrinking by 2%.
Growth, Profitability, and Financial Ratios for Bayerische Motoren Werke AG (BMW) from Morningstar.com

 

[Rarity]

Here's what car companies will probably look like in 2019:

All true and informative (as far as projections can ever be), but I think some of the debt mixed in there is from the captive finance arms.

 

[Carl Raymond]

Also, very importantly, most military conflicts, even short term ones, are won through logistics and most vehicles are used for logistics

So from an economics POV sales of a couple of thousand units of a light vehicle that is reasonably protected against casual attacks and which platform can also double for special ops use is IMHO a lot more valuable economically than any of the more specialized vehicles intended for open conflict - simply because a lot more of them are required and actually used as well. Bullets flying is basically just 0.01% of the time.

Environmentally friendly warfare. The ability to kill people without leaving a trail of pollution that might be dangerous to health.

 

[JRP3]

This is relevant to the thread because it gives us a clue as to the survivability of EV startups i.e. Future competitors unencumbered by their tailpipe history.

No, it has nothing to do with market action and nothing to do with Tesla. It's no more relevant than an electric skateboard or scooter startup. It mostly looks like an attempt to get more eyeballs on a niche company you invested in.

 

[BioSehnsucht]

NN driven windshield wipers should be worth at least $.50/share
Elon Musk on Twitter

Imagine what else can be attached to NN!

Oh, and more video games!
Elon Musk on Twitter

Come on buyers!

Have no idea why everybody's asking there for HOST MEME REVIEW.

I'm happy to let the software engineers build games into the system as long as it's separate teams and/or in their "own" time after getting their "real" work done, but unless they add USB or Bluetooth controller support, playing with the buttons on the steering wheel or the touch screen is really impractical ... so I would like it if they added either of those before adding more games.

 

[22522]

2019 10Best Cars

A little sloppy on my part, but I have lost faith in C&D's journalistic integrity.

 

[Carl Raymond]

No, it has nothing to do with market action and nothing to do with Tesla. It's no more relevant than an electric skateboard or scooter startup. It mostly looks like an attempt to get more eyeballs on a niche company you invested in.

That's partly it. But I also got excited that I was first to hear some news. What is this thread if not a bunch of people sharing news that potentially affects stock. It's Tesla focused. Is that really all we are interested in? No interest in the mission of sustainable transport and energy? And if we are not interested in that, we really have missed the whole point of Tesla. It is after all, their stated mission.

 

[M3Rider]

I'm happy to let the software engineers build games into the system as long as it's separate teams and/or in their "own" time after getting their "real" work done, but unless they add USB or Bluetooth controller support, playing with the buttons on the steering wheel or the touch screen is really impractical ... so I would like it if they added either of those before adding more games.

I don't believe it's the same people who do the real work and games. He solicits suggestions for games on twitter - this was the case for Atari games and I think this will be one of the upcoming games -
Niche Gamer on Twitter
and then those people who agree, get the job I assume temporarily.

 

[Rammstein]

I for one like the "off topic" discussion that happens here. I think off topic can be open for interpretation. Someone might think a topic like FSD has nothing to do with marked action and another person might think it does. Sounds like a impossible thing to moderate. I personally think that if it has anything remotely to do with Tesla then that topic is fair game. WTF would be in this thread if we didn't talk about things other than the stock price going up and down. That would be a very boring thread.

 

[humbaba]

2019 10Best Cars

A little sloppy on my part, but I have lost faith in C&D's journalistic integrity.

I'm not sure that kind of article has any journalism to lose integrity over. It is fluff piece aimed at their intended readership who want cars with engines to be tweaked, that roar when you press the accelerator and lurch when you don't smoothly advance through gears.

I get it, I only drive manual transmission vehicles and they are a blast. Since I've never driven an electric, and I've only driven front wheel drive for decades, if I ever get the L3MR I ordered it will be a shock to the system. An electric just doesn't resonate with their intended audience. At least, not without experiencing one first hand.

So while it does seem like a significant oversight for them to not include a Tesla in their lineup, I think it just illustrates the echo chamber effect. They don't want to risk upsetting a reader with something unexpected. Yes, they run the gamut down to a VW Golf, but "the 228-hp turbocharged inline-four" and later "the 288hp Golf R speaks to our power lust." Translation: it revs nicely. It has a "turbocharger".

 

[mmd]

Here's what car companies will probably look like in 2019:

Tesla:
~$35b revenues
~$6b OCF
~$9b debt
Debt is equal to 3 months of revenue or 18 months of operating cashflow. Revenue is growing at >30% per year.
Growth, Profitability, and Financial Ratios for Tesla Inc (TSLA) from Morningstar.com

Ford:
~$155b revenue
~$16b OCF
~$160b debt
Debt is equal to 12 months of revenue of 120 months of operating cashflow. Revenue is not growing at all.
Growth, Profitability, and Financial Ratios for Ford Motor Co (F) from Morningstar.com


GM:
~$145b revenue
~$16b OCF
~$110b debt
Debt is equal to 9 months of revenue or 83 months of OCF. Revenue is not growing.
Growth, Profitability, and Financial Ratios for General Motors Co (GM) from Morningstar.com

Toyota:
~$263b revenue
~$35b OCF
~$170b debt
Debt is equal to 8 months of revenue or 58 months of operating cashflow. Revenue is not growing
Growth, Profitability, and Financial Ratios for Toyota Motor Corp ADR (TM) from Morningstar.com

VW:
~$263b revenue
~$8b OCF
~$160b debt
Debt is equal to 7 months of revenue or 240 months of operating cashflow. Revenue is growing by about 2%/year.
Growth, Profitability, and Financial Ratios for Volkswagen AG (VW) from Morningstar.com

Daimler:
~$186b revenue
~($7b) OCF (that's right, negative OCF)
~$89b debt
Debt is equal to 6 months of revenue and operating cashflow is negative. Revenue is not growing.
Growth, Profitability, and Financial Ratios for Daimler AG ADR (DMLRY) from Morningstar.com

BMW:
~$106b Revenue
~$7b OCF
~$89b debt
Debt is equal to 10 months of revenue or 153 months of OCF. Revenue is shrinking by 2%.
Growth, Profitability, and Financial Ratios for Bayerische Motoren Werke AG (BMW) from Morningstar.com

Hmm, ok! I see that 18 people already found your post informative.But when I click the link for Tesla, almost all the important numbers are negative. So I am not sure how you came to these rosy numbers here. If mods were to apply remotely consistent standards for all posts here, I think your post should be removed. I haven't checked all the data, but few that looked odd to me are indeed odd/misrepresentation.

If your Tesla numbers are based on rosy analyst projecitons, then be warned than I have seen this story for many years. If we were to believe the Tesla analysts from years ago, Tesla will be rolling in cash with bilions of profit by now, instead of being "single digit weeks away from BK".

Your Daimler number also looks wrong, but this seems to be a data entry error in the link. If you you click the financial tab, it shows Daimler has a $13B profit for 2017, not loss.
Income Statement for Daimler AG ADR (DMLRY) from Morningstar.com

Daimler warned of sinking profits last month, but they aren't in the red yet.
Daimler profit sinks on diesel; outlook for year lowered

As for the debt loads: It's mostly pension liabilities, at least for American car companies. Tesla doesn't pay any pension. When it starts paying its workers fairly, it may see similar debt explosion. Nevertheless, I agree the debts are there.

 

[JRP3]

What is this thread if not a bunch of people sharing news that potentially affects stock. It's Tesla focused.

Your post was not Tesla focused nor market related.

Is that really all we are interested in? No interest in the mission of sustainable transport and energy? And if we are not interested in that, we really have missed the whole point of Tesla. It is after all, their stated mission.

A large part of Tesla's mission is to counteract the perception of EV's as niche market weirdmobiles which will never sell in real volume. Your post has nothing to do with that mission. There are also many other threads to discuss non-Tesla related topics. This thread starts to become unusable with too many off topic posts.

I for one like the "off topic" discussion that happens here.

Great, many other threads for that, including but not limited to the "General" discussion thread. We need to keep the clutter down in this thread.

. WTF would be in this thread if we didn't talk about things other than the stock price going up and down.

Useful.

 

[ZachF]

Hmm, ok! I see that 18 people already found your post informative.But when I click the link for Tesla, almost all the important numbers are negative. So I am not sure how you came to these rosy numbers here. If mods were to apply remotely consistent standards for all posts here, I think your post should be removed. I haven't checked all the data, but few that looked odd to me are indeed odd/misrepresentation.

If your Tesla numbers are based on rosy analyst projecitons, then be warned than I have seen this story for many years. If we were to believe the Tesla analysts from years ago, Tesla will be rolling in cash with bilions of profit by now, instead of being "single digit weeks away from BK".

Your Daimler number also looks wrong, but this seems to be a data entry error in the link. If you you click the financial tab, it shows Daimler has a $13B profit for 2017, not loss.
Income Statement for Daimler AG ADR (DMLRY) from Morningstar.com
View attachment 356495

Daimler warned of sinking profits last month, but they aren't in the red yet.
Daimler profit sinks on diesel; outlook for year lowered

As for the debt loads: It's mostly pension liabilities, at least for American car companies. Tesla doesn't pay any pension. When it starts paying its workers fairly, it may see similar debt explosion. Nevertheless, I agree the debts are there.

2019 projections homey, It's bolded in Black on my post. Stock market prices the future, not now. Tesla's Q3 results annualized are ~$27b in rev, ~$5.2b in OCF, and ~$10.3b in debt. Tesla should easily get to $35b in revenue, $6b in OCF, and pay off about $2 billion in debt next year.

Also, Operating cashflow =/= Operating income. Daimler's operating cashflow is negative. Look a few columns down. OCF is what pays for debt servicing/repayment and capital expenditures.

Free cash flow is what people talk about when they say Tesla is "burning cash"... Take a look at Daimler's free cash flow the last 6-7 years, they've burned >$70 billion in cash.

 

[EVNow]

Well, I feel silly for not guessing this one. The shorts had a nice dip going and didn't want to chance a push down and bounce with a half hour to go, so they waiting for the final 10 minutes and achieved their dip into close.

The thing is, these trading patterns which we predict and joke about are clear examples of price manipulation. They are illegal and the SEC lacks the will to investigate and go after these people. Looks like the solution is to realize the SEC is not capable of ensuring the markets are a fair casino. Either the NASDAQ has to move forward with its proposed rules regarding short selling disclosures or we ought to start pestering our reps in Congress to amend the laws. The problem with such blatant short seller manipulations is that it destroys wealth and threatens otherwise viable companies. There's a good argument for seeking reforms.

May I suggest tweeting at / calling Ro Khanna's office - esp. those in his district in CA? Tesla factory probably falls in his district.

Ro Khanna for Congress

 

[scaesare]

The big question is, I think, is batteries: Rivian's $61k SUV entry price target looks aggressive to me for such a large car. If they use LG Chem they'll be at the mercy of a much larger player and sole supplier, and nobody else has the energy density I think. They'll also be second tier customers compared to ICE OEMs who are already fighting over LG Chen's limited supply of batteries.

I believe that starting price point is after tax incentives, no?

 

[Artful Dodger]

TSLA traded just 3.1 M shares today, the lowest daily volume in the last 15 months (Sep 1, 2017 was the last lower volume day, pending NASDAQ's final revision of today's number).

@SpaceCash Is this the Calm before the Storm?

CH3ERS!

 

[jhm]

Ok, I don't have time to post 95 these. I can't even keep up with this thread. So I started a Reform Movement.

Tesla Price Action Reformed