TSLA Market Action: 2018 Investor Roundtable

[Tslynk67]

In case you missed it, here's the view of the landing from the first stage itself...

Elon Musk on Twitter

 

[Mader Levap]

Could you guys write about SpaceX somewhere else?

 

[Esme Es Mejor]

OT

I think that's not the whole court, just Hugo Black.

It was Potter Stewart, not Hugo Black. You were correct that he was speaking for himself, not the whole court. But the court ended up putting his test into practice, holding “movie days” to eat popcorn and watch porn to decide if it violated the Constitution or not.

Hugo Black thought the “know it when I see it” test was an unconstitutional restriction of speech, and refused to go to these “movie days.”

Edit: OT

 

[lklundin]

Sorry to jump in but this is way too exciting!
(Non-owner)
Can’t believe it

... carry on

Excuse me, what do you mean by non-owner? From you your signature (Model S lover), it seems you are an owner. So did you receive your invitation to configure (and order) your model 3 while being a Model S owner?

So far what I got, was an invitation to give specific information (incl. VIN) for a trade-in vehicle,

European Model 3: Tesla solicits trade-in information

Btw, @neroden should get a kick out of the fact that the web-page where I could give the trade-in info had no option for stating that I will buy the Model 3 without a trade-in.

PS. Edited question...

 

[Do It]

I went down the rabbit hole of "$TSLAQ Twitter" vis-à-vis that link. One of the topics of conversation was divergence between the TSLA stock price and bond yields -- ie., there is not a corresponding increase in the 2025 bond yields in correlation with the stock price increase since Q3 ER. The theory for this divergence is that the SP is being influenced by covering among shorts, and that it will come back down to levels more equal with that of its bond yields after that covering is done.

I'm hesitant to bring up what is likely FUD on this board, but I'm curious if anyone can give an alternative explanation from the one above. Are bond yields and the stock price not as intricately linked as has been portrayed? Are bond yields a lagging indicator? Something else entirely?

Here is my theory: If you have a pile of money and you want to invest in Tesla, would you be happy to have a yield of 7% by holding bond? I believe that is a NO for most people who really understand Tesla - they would rather invest in tsla stock and get 20%-30% for the next few years. This leaves Tesla bond to those who have little idea about Tesla but simply want higher yield to beat the treasury (which is about 3%.) These are the people who are most susceptible to FUD - they want higher yield but afraid of losing money - this drives the bound price lower and yield higher. The divergence between tsla share price and the bond price is just another manifestation of the same underline reason why you still have 27M shares shorted while Tesla is about to dominate several multi-trillion dollar industries.

 

[EVNow]

Won't the sound of the negotiations be drown out by the sound of the singing fat lady sitting with a flock of flying pigs in a money tree, and the mooing of the cows coming home, across the frozen wastelands of hell, during a week comprised entirely of Sundays?

No.

Opinion polling for the next United Kingdom general election - Wikipedia

 

[Unpilot]

In case you missed it, here's the view of the landing from the first stage itself...

Elon Musk on Twitter

That little thruster was sure trying to stop the rotation!

 

[Tslynk67]

CNBC are running an article that there's no tariff agreement with China at all: No deal on auto tariffs as White House backpedals, Volvo threatens to move jobs overseas

But the White House has now backpedaled, acknowledging there was no deal in place to roll back automotive tariffs. Trump himself on Tuesday tweeted there "probably will" be a trade deal to follow the dinner meeting, even as he declared himself "a Tariff Man." He might actually ramp up the trade dispute with the world's largest automotive market if there isn't a broader agreement within 90 days

And much scorn of #45

They do close with a positive nod to Tesla, at least, which is unusual for them:

One of the few automotive stocks to score a gain on Tuesday was Tesla ,which only recently began work on a new factory in Shanghai that eventually will let it sidestep the tariff battle. The California-based electric vehicle manufacturer was one of the few automakers that didn't fall, closing up by less than 1 percent to $359.70 a share.

What I do fine a little queer is that there's no mention on CNBC's $TSLA page of the excellent monthly delivery estimates...

 

[ZeApelido]

Stumbled upon this gem

View attachment 358312

Your battery is about to die, get to a Supercharger ASAP!

 

[stef]

Excuse me, what do you mean by non-owner? From you your signature (Model S lover), it seems you are an owner. So did you receive your invitation to configure (and order) your model 3 while being a Model S owner?

So far what I got, was an invitation to give specific information (incl. VIN) for a trade-in vehicle,

European Model 3: Tesla solicits trade-in information

Btw, @neroden should get a kick out of the fact that the web-page where I could give the trade-in info had no option for stating that I will buy the Model 3 without a trade-in.

PS. Edited question...

Sorry false impression. was a very old signature ... that I just got a reason to update
No, I never owned any other Tesla, just been dreaming of one since I test drove Model S in 2014. Just went lining up on 31/03/2016 for Model 3.

 

[Fact Checking]

I went down the rabbit hole of "$TSLAQ Twitter" vis-à-vis that link. One of the topics of conversation was divergence between the TSLA stock price and bond yields -- ie., there is not a corresponding increase in the 2025 bond yields in correlation with the stock price increase since Q3 ER. The theory for this divergence is that the SP is being influenced by covering among shorts, and that it will come back down to levels more equal with that of its bond yields after that covering is done.

I'm hesitant to bring up what is likely FUD on this board, but I'm curious if anyone can give an alternative explanation from the one above. Are bond yields and the stock price not as intricately linked as has been portrayed? Are bond yields a lagging indicator? Something else entirely?

Here is my theory: If you have a pile of money and you want to invest in Tesla, would you be happy to have a yield of 7% by holding bond? I believe that is a NO for most people who really understand Tesla - they would rather invest in tsla stock and get 20%-30% for the next few years. This leaves Tesla bond to those who have little idea about Tesla but simply want higher yield to beat the treasury (which is about 3%.) These are the people who are most susceptible to FUD - they want higher yield but afraid of losing money - this drives the bound price lower and yield higher. The divergence between tsla share price and the bond price is just another manifestation of the same underline reason why you still have 27M shares shorted while Tesla is about to dominate several multi-trillion dollar industries.

I think that's a big part of the picture, and I think 2025 bond pricing has a few other important aspects as well:

• The 2025 corporate bonds were issued in a particularly favorable low yield environment in August 2017 - which means that the Fed rate rises over the last year had a disproportionately negative effect on them. Furthermore the 5.3% yield was considered a particularly good deal even back then and the auction was over-subscribed. This is not specific to Tesla, this is a normal property of bonds: bonds of similar risk profile issued at around the similar date and with a similar maturity have a similar price history.
• There's recession fears which tend to pressure corporate bonds, especially "high risk" junk bond issues.
• Bond traders are conservative and the 'bankruptcy' talk both by the $TSLAQ types and by Elon himself didn't help. It's the only tail risk they often don't hedge for: if you buy bankruptcy insurance you wipe out most of the gains from owning a high-yield bond to begin with.
  
• For all these reasons the 2025 corporate bonds (no equity conversion features) are particularly illiquid, they can only be traded by big institutional investors and it's not uncommon to see just a few (less than 10) transactions per day. Those few who are selling are selling because they must, under pressure for reasons unrelated to Tesla - creating a buyer's market with artificially low prices. Most of those who are owning them are likely waiting for the inevitable Moody's upgrade to investment category again: did a company ever get included in the S&P 500 that was rated 'junk' by Moody's? The recession fears might also pass by mid-2019 and the Fed recently made monetary easing noises as well.

I.e. nothing to be worried about IMHO, I think the real pricing of these bonds will emerge after the Moody's upgrade early next year.

 

[Buckminster]

OT
Brexit

This represents the crazy remainder situation:
Unite leader warns Labour against backing second EU referendum

This represents the crazy brexiteer situation:
Piers Morgan calls Raab a 'coward' for prolonging plot to oust May | Daily Mail Online

The May (centrist and was a remainer) deal is too far from each to satisfy either. If there was a 10 year sunset clause to the backstop then the people and even parliament might start supporting it.

 

[brian45011]

But for someone with a newer car I could definitely see a case for delaying getting an EV.

Deferring (or eliminating) the marginal production of any vehicle is "green." That was the environmental folly of "cash for clunkers." There is considerable energy consumed (and harmful emissions discharged into the environment) while producing a vehicle, regardless of the means of propulsion. Prematurely destroying the remaining useful life of any vehicle to achieve any political purpose is simply wasteful.

POTUS 41 rarely got the recognition he deserved for supporting 1990 CAAA.

 

[Fact Checking]

slightly OT Brexit

The May (centrist and was a remainer) deal is too far from each to satisfy either. If there was a 10 year sunset clause to the backstop then the people and even parliament might start supporting it.

Basically 10 years or even 5 years backstop is a non-starter on the EU side. The EU wants this to end, one way or another. From an EU point of view "uncertainty" is a lot worse than either variants of 'leave' or 'remain'.

The UK has very little negotiation leverage: "I'll spit on you, jump from this rooftop and make a big mess on the pavement if you don't give me your money!" threat doesn't have much weight. The EU went so far to avoid collateral damage to the pavement and the costs of the funeral - but from that point on it's the U.K.'s job to make up their mind and match expectations to reality: the best deal the U.K. will ever get from the EU is the deal they made in 1973 which led to the establishment of the EU single market in 1993.

5-10 years more of the same is dreaming of unicorn deals that won't materialize.

What will materialize is the end of 29 March 2019 deadline when the U.K. will crash out of the EU automatically due to the Article 50 process it started voluntarily, unless the U.K. actively undertakes measures to prevent it to happen. (Such as taking back the Article 50 notice, or accepting the EU deal.)

 

[ZachF]

OT

• The center engine almost certainly got irreparably damaged from the glowing hot engine being dunked in cold water. (Maybe even the 2 other engines used for the re-entry burn and which were glowing hot just a short minute earlier.)

Sea level Merlins don't get hot enough to glow, they use the cold fuel pumped through the engine bell to keep them cool.

 

[mongo]

That was the environmental folly of "cash for clunkers." There is considerable energy consumed (and harmful emissions discharged into the environment) while producing a vehicle, regardless of the means of propulsion. Prematurely destroying the remaining useful life of any vehicle to achieve any political purpose is simply wasteful. POTUS 41 rarely gets the recognition he deserves for supporting 1990 CAAA.

You have obviously never been behind a 15 year old V-8 powered vehicle (in 2009)...
The credit was only $3,500 to $4,500 so consider the pollution and lifetime remaining of a vehicle that would not achieve that price in a private party transaction...

 

[JRP3]

Prematurely destroying the remaining useful life of any vehicle to achieve any political purpose is simply wasteful.

Depends, removing diesel vehicles and preventing them from spewing more harmful particulates for example is not wasteful.

 

[MarcusMaximus]

I went down the rabbit hole of "$TSLAQ Twitter" vis-à-vis that link. One of the topics of conversation was divergence between the TSLA stock price and bond yields -- ie., there is not a corresponding increase in the 2025 bond yields in correlation with the stock price increase since Q3 ER. The theory for this divergence is that the SP is being influenced by covering among shorts, and that it will come back down to levels more equal with that of its bond yields after that covering is done.

I'm hesitant to bring up what is likely FUD on this board, but I'm curious if anyone can give an alternative explanation from the one above. Are bond yields and the stock price not as intricately linked as has been portrayed? Are bond yields a lagging indicator? Something else entirely?

I'll mention first that I know little about the bonds. That out of the way, my impression is that bonds give a set return that you are guaranteed to get so long as the company doesn't declare BK. The price of the bonds, therefore, give the market's opinion on the probability of that BK happening(higher price indicating lower probability). Stock, on the other hand, is ownership of the company. Risk of going under certainly affects that, but it's also tied in with probability of growth/contraction.

One would expect the two to be related to each other, in that worry about a BK event would negatively affect both stock price(signals growth very unlikely) and bond price(high risk of becoming worthless). But an increase in the upside(potentially Nx revenue/profit growth) should only impact stock price, so long as it doesn't change the probability of bankruptcy.

 

[capster]

A study from the German Federal Employment Agency came out today, which means it was paid by taxpayer's money... The media has headlines like (translated):

• More than 100,000 jobs will be lost
  
• More e-cars, fewer jobs?
• Germany could lose tens of thousands of jobs through e-mobility

Link to the study: http://doku.iab.de/forschungsbericht/2018/fb0818.pdf

Abstract:

Unfortunate for Germany, and perhaps for the future of the EU, that it has been caught wrong footed by this technology transition at this moment in history.

Given the major global change drivers the world faces, the problems Europe already faces, and the underlying tectonic geopolitical shifts in play (see the first chapter of Kaplan's "The Return of Marco Polo's World" for his concise, if sobering, assessment), Europe could be facing some quite disruptive challenges in the next 3 to 10 years or so.

It will, I think, become clearer in that time frame whether Brexit was or was not a good move.

 

[Buckminster]

5-10 years more of the same is dreaming of unicorn deals that won't materialize.

You are being a little too logical I think - this is the UK...
The UK (like the EU) don't want to be trapped in the back stop forever. The UK (fairly unanimously unlike the rest of our Brexit politics) wants to be able to exit from the backstop, which ties us to a customs union and ECJ. The inference being that we would like to pay more for less during the transition period but on our own terms. Many folk think that the EU want to trap us in the backstop literally forever. This is the centrist position which is not strongly supported. I agree with you that this would be good for the UK most likely. I agree with you also that the EU wouldn't want it either. Giving the people the Brexit that they voted for is a thing.
Again - we crazy!