TSLA Market Action: 2018 Investor Roundtable

[Dig deeper]

I think we will see $250 again.
After it splits !

Speaking of splits, I wonder if Tesla will actually do one anytime soon. A 7-1 split at $700 would allow some small fish (like me) to accumulate a little easier. Not holding my breath because Tesla has no real incentive to do so. Maybe someone will try to suggest it to Elon on twitter and play to his soft side, seeing as he seems to care about smaller investors more than any typical CEO.

 

[neroden]

OT

Remember, one-off prototypes are easy, volume production is hard.

Indeed... I'm looking forward to someone timing the car elevator, which will be the throughput-limiting factor. Betcha it's low throughput. (Not to mention the durability and mass production questions...)

 

[neroden]

Speaking of splits, I wonder if Tesla will actually do one anytime soon.

Stock splits are out of fashion. Back in the day when a broker would charge you an arm and a leg to trade less than 100 shares, and the newspaper stock listings had room for 2 digits before the decimal place, most companies split their stock when it hit $100 -- i.e. making the "entry price" $10,000.

Now it's easy enough to buy 1 share, and stock listings don't have a fixed number of columns.. I therefore don't think you'll see splits before $10,000. Buffett, who hates stock splits, finally introduced the lower-priced (split) BRK/B when BRK/A hit $30,000, so I expect most companies will split when they hit that point.

 

[HG Wells]

OT ?

Got a call about my reservation from the local Tesla store.
Have had many texts from somewhere in Tesla also.

The call was interesting. After stating that I was waiting for the SR she went into tax refund dropping in january mode.
She also informed me that I could take delivery this week for MR and single motor LR. THIS GOT ME EXCITED !
I asked what colors were available. Black and only black.

Is Maaco still running their $299 paint special ?

Back to market action.
Should I be worried about demand ?

 

[ZachF]

Agreed. If they have the sense to release her back to China (they can do whatever they like to Huawei as a company) then things will settle down. If they don't... it could get REALLY serious, as in removal of diplomatic relations, embargos, etc... China can survive that. The US can't.

Eh... I wouldn't be too sure. Trade wars always hurt the surplus countries the worst, but this would be something that could really hurt both, It's like choosing between AIDS and cancer.

 

[X Fan]

OT ?

Got a call about my reservation from the local Tesla store.
Have had many texts from somewhere in Tesla also.

The call was interesting. After stating that I was waiting for the SR she went into tax refund dropping in january mode.
She also informed me that I could take delivery this week for MR and single motor LR. THIS GOT ME EXCITED !
I asked what colors were available. Black and only black.

Is Maaco still running their $299 paint special ?

Back to market action.
Should I be worried about demand ?

Not if you choose black.....

 

[anthonyj]

What a pimp. This is how you know $420 is secured.

Amber Heard Says She and Ex Elon Musk 'Have a Beautiful Friendship Now' 10 Months After Split

 

[dandurston]

*not* ignoring future value for a second: take your company with $2 million in assets and $1 million in debt. Add a 50% chance of rising to $4 million in assets in the future. Each share, in that case, is worth $1 million(expected value of company is $1 million current value + $1 million probability-weighted future value). The company issued 2 additional shares for $500k and pays back debt. The company is now worth $3.5 million($2 million in assets + 50% chance of rising to $5 million). With 4 shares, that’s $875k/share.

(Yes, the change in cash on hand likely changes that probability, the degree of a rise, or both, but that effect is non-deterministic)

All you're proving is that a company could tank their share price if they did something dumb like sell shares below market value.

If the company is worth $2 million and has 2 shares, then the shares are worth $1 million each. So sure if they sold two shares below value for $500,000 then that would be a terrible move and would dilute the overall share price. Think about it: Why would any company sell shares to the public for $500g when they're instantly worth $875g? That's just below value. People would be scrambling to buy these.

What you've done is increased the value of the company without increasing how much you're selling the shares for. Selling them below value would add to the share count moreso than it adds to the value of the company.

What would make sense is to sell the new shares for $1 million since the shares are worth $1 million. So then if two new shares are issued for $1 million each, then the company value would rise by $2 million to $4 million total, and thus the shares continue to be worth $1 million each. You can tell this is the fair price because the value of the new shares is equal to what they were just sold for.

 

[printf42]

Battery Prices Likely Heading for the Ceiling After Congo Raises Royalty Rate - The Truth About Cars

TSLA would have an unique advantage when they manage to eliminate colbalt from batteries. Even before that, their lower use of cobalt would make sure no one else could come close to their cell price level.

 

[Joe F]

OT ?

Got a call about my reservation from the local Tesla store.
Have had many texts from somewhere in Tesla also.

The call was interesting. After stating that I was waiting for the SR she went into tax refund dropping in january mode.
She also informed me that I could take delivery this week for MR and single motor LR. THIS GOT ME EXCITED !
I asked what colors were available. Black and only black.

Is Maaco still running their $299 paint special ?

Back to market action.
Should I be worried about demand ?

I’d be more worried about a $299 paint job.

 

[Unpilot]

I need "an advice"
I have most of my Tesla holding in my 401k IRA and some in my 401K Roth IRA. Since I have little doubt that the share price will increase. Would it not make sense to move as much as I can from the traditional IRA to the Roth and pay the tax hit now?

My timeline is roughly two years before I would start to cash out of any stock.

 

[Dig deeper]

Stock splits are out of fashion. Back in the day when a broker would charge you an arm and a leg to trade less than 100 shares, and the newspaper stock listings had room for 2 digits before the decimal place, most companies split their stock when it hit $100 -- i.e. making the "entry price" $10,000.

Now it's easy enough to buy 1 share, and stock listings don't have a fixed number of columns.. I therefore don't think you'll see splits before $10,000. Buffett, who hates stock splits, finally introduced the lower-priced (split) BRK/B when BRK/A hit $30,000, so I expect most companies will split when they hit that point.

Appreciate the historical background. I actually held Brk.B but I sold it recently to roll into Tesla. Which was a tough choice because Berkshire Hathaway and Buffett are the main reasons why I took to investing in the first place.

I guess really high net worth individuals don't have issues with the SP getting to that point but i don't understand why Tesla would want to limit their investor pool to such an extent. Perhaps to discourage fickle investors from jumping on board. As far as I know, with an SP at 5k or higher the only way that an average person (earning 50k-120k) can increase their equity stake, would be through a broker/platform that allows for DRIP.

 

[MarcusMaximus]

All you're proving is that a company could tank their share price if they did something dumb like sell shares below market value.

If the company is worth $2 million and has 2 shares, then the shares are worth $1 million each. So sure if they sold two shares below value for $500,000 then that would be a terrible move and would dilute the overall share price. Think about it: Why would any company sell shares to the public for $500g when they're instantly worth $875g? That's just below value. People would be scrambling to buy these.

What you've done is increased the value of the company without increasing how much you're selling the shares for. Selling them below value would add to the share count moreso than it adds to the value of the company.

What would make sense is to sell the new shares for $1 million since the shares are worth $1 million. So then if two new shares are issued for $1 million each, then the company value would rise by $2 million to $4 million total, and thus the shares continue to be worth $1 million each. You can tell this is the fair price because the value of the new shares is equal to what they were just sold for.

Ahhhh right, messed up my math there. Carry on.

 

[Artful Dodger]

Right now I hear a lot of predictions and calculations that Q4 will only be slightly above Q3. That may be too conservative

In my comment on Oct 20, 2018 I estimated 2018Q4 Model 3 production at 74,000.

Since then, we've received 2 important pieces of new information:

• Elon stated the goal of producing 1,000 Model 3s per day by Nov 28
• DISQUS commenter 'carsonight' tells us GF1/Panasonic now has 13 bty cell lines: 10 x 300K/day + 3 x 400K/day

Let's see how acheivable that rate is. To convert GF1 cell output into Model 3 production, lets make the following assumptions:

• 4.2M cells/day max. output from 13 GF1/Panasonic bty cell lines
  
• 50/50 allocation of bty cells to Model 3 LR vs MR (my WAG*)
  
• 4416 cells in each LR (known from 3rd party teardowns)
  
• 3648 cells in each MR (est'd 38 parallel groups of 96s strings)

That bty cell production rate supports max. 1,050 Model 3s per day:

• 2.1M cells/day / 4416 cells/LR = 475 LRs / day
• 2.1M cells/day / 3648 cells/MR = 575 MRs / day

So we can see that GF1 is producing enough bty cells right now to support Elon's goal of 1,000 Model 3s produced per day during Dec 2018.

Note: 'carsonight' has recently commented that 2 bty lines at GF1 have been reallocated to Tesla Energy (T.E.) use. As shown by the Model 3 cell requirements above, I don't think there's enough production yet to allow a switch-over to T.E. production.

However, it's possible that Panasonic will upgrade the 10 original lines to 400K cells/day output (JB mentioned this during the 2018Q3 Earnings Call). If that has occured already, then target Model 3 production could be supported with 11 lines, and 2 could be reallocated to T.E.

Finally, here's my updated estimate for 2018Q4 Model 3 production:

Oct: 12,200** + (685/day * 14 days) +
Nov: 860/day * 26 days +
Dec: 1000/day * 26 days =
21,800 + 22,200 + 26,000 =
70,000 Model 3 in 2018Q4​

That's consists of 41K LRs (AWD+M3P) and 29K MR (L3MURs). We'll know in a less than a month. Exciting times!

CH3ERS!

P.S. WAG* = Wild Ass Guess

** 12,200 est in Oct comes from E/Trk src​

 

[Reciprocity]

Quick request. Relevant because David is a super smart M&A attorney and Tesla supporter on Twitter recently be was mocked by the evil @TeslaCharts on Twitter so let's get for 10k followers:

Reciprocity on Twitter

Can everyone please follow @davidtayar5 Twitter apparently isn't something he is good at. So I'm trying to help him out. Thanks.

Tell all your friends.

 

[anthonyj]

Some of the most annoying bears on Stocktwits are questioning their positions, and a couple turned bullish. That’s a buy signal if I’ve ever seen one.

 

[ke6jph]

I need "an advice"
I have most of my Tesla holding in my 401k IRA and some in my 401K Roth IRA. Since I have little doubt that the share price will increase. Would it not make sense to move as much as I can from the traditional IRA to the Roth and pay the tax hit now?

My timeline is roughly two years before I would start to cash out of any stock.

I started a thread about two years ago relating to this (sort of). Life after TSLA. Did not go very far but I think about it all the time. We have a similar time frame depending on the share price. My CPA advised me several years ago to convert all my IRA stock to my Roth IRA. At the time I would have had a hard time paying the tax on the transfer. I changed my mindset to “better to have to worry about how to avoid paying tax than not being able to pay tax”. This has started me on a different thought process on post retirement investing. No concrete plan yet but open to ideas
Mark

 

[XHabjab]

I do.

Elon made it clear that all investment goes into the car and actually why should they spend a penny on ads (not to mention how crazy expensive super bowl is) if you have demand that is that high that you fear you get angry customers because they need to wait that long.

Tesla so far has sold a bazillion cars without any advertising. I think that whole landscape is going to change a little (or at least shift) when the $7500 tax credit drops in January. I think its pretty clear that Elon wanted his customers to maximize the benefit last quarter (2018Q3), and he probably wants the same this quarter (2018Q4). Now that the pressure will be off to produce deliveries in the USA, I predict that Tesla will look to a larger share of sales/deliveries to other countries. The cars are currently still selling without advertising, but there will be a little less interest in January and beyond without the big tax credit. For this and several other reasons (* another example below), I find it reasonable that they might start doing a little advertising in the USA in 2019 and beyond. A Superbowl ad would be quite reasonable to me.

* A second reason is that advertising dollars to network television is a good FUD abatement strategy. FUD doesn't exist without the media.

 

[McMountain]

Some of the most annoying bears on Stocktwits are questioning their positions, and a couple turned bullish. That’s a buy signal if I’ve ever seen one.

I would hold my breath about some of those guys, especially those with Girl avatars. And TerminalHorizon is as relentless as ever. That guy will still be short at $1000.

 

[wipster]

Tesla Replaces General Counsel With Seasoned Trial Lawyer Tesla Replaces General Counsel With Seasoned Trial Lawyer

What up with this? How will the market respond to this development?