2017 Investor Roundtable: TSLA Market Action

[RobStark]

I'm not sure if it'll be easier to disrupt the trucking market than cars. Trucking is a commercial industry in which decisions may be influenced by established relationships vs. a consumer market such as cars.

If fleet managers can reduced total cost of ownership 10% or more they will throw their mothers and those relationships under the bus.

In commercial markets it is about the bottom line not branding power or even relationships.

Relationships matter when everybody is selling widgets at almost identical prices or almost identical total cost of ownership.

 

[MitchJi]

I just figured it was Elon's way of telling the investor group to go F themselves.

Idiocy squared:

Elon Musk's remark that if a Tesla investment group wants greater board independence they should buy the stock of Ford has earned a rebuke from one of his institutional investors.

The Tesla CEO was responding to a letter in which several investors urged the company to strengthen its corporate governance by appointing directors that don't have ties to Musk and to have yearly board elections. In a Tweet on Wednesday afternoon, Musk advised the group to buy Ford stock, saying their governance is "amazing."

"Comments like that contradict the company's statement that they take their investors' concerns seriously," Etelvina Martinez, corporate governance manager at CtW Investment Group, one of the investor groups that wrote to Musk, said in an email. "We would like to meet with the board to discuss our concerns and their director recruitment process."

Note:
Sine someone else misunderstood this, I want to clarify that by idiots, I meant the investor groups that wrote to Musk, not anyone on this forum.

 

[kenliles]

Note:
Sine someone else misunderstood this, I want to clarify that by idiots, I meant the investor groups that wrote to Musk, not anyone on this forum.

How do you know they aren't on this forum?

And according to my wife, you mean me;
she says I'm an idiot

 

[ValueAnalyst]

I believe that both trucking companies and independents will jump at the chance to reduce fuel costs.

Are you concerned about Daimler's efforts in this area? Daimler to build large electric semi truck; Urban e-Truck results good so far

Elon said about five years for regulatory approval. It's a little refreshing to see that someone believes that Elon's schedule is extremely conservative!

There have been instances where Elon's predictions have proven conservative (although I agree, rare). For example, he initially announced 500k cars in 2020, then raised it to 1m cars, and now potentially will build 5 Giga's by 2020 (~3 years after location announcement). Can they potentially squeeze out 1 million cars each for the four non-solar Giga's? I don't see why not since the demand is there and they haven't even started the "alien dreadnought" improvements (remember, 3 years ago nobody was even thinking about autopilot). Given that each Giga costs ~$5B, Tesla should be able to fund that growth via cash flow from Model 3 and some bond issuance. Hopefully we've seen the last of equity dilution.

Once the Level 5 technology is there (when was the last time you've heard of an Autopilot crash?), I think there will be a big push from consumers (and maybe truckers?) to pass the regulatory approval. By the time Semi comes around (let's agree on late 2019), Tesla will have more than a million cars on the road continuously collecting data, and hopefully no accidents. That's more than ten billion miles of autonomous driving data (actual and stealth mode), which may be enough for regulatory approval. I would expect regulatory approval to come through in majority of states by late 2019.

 

[vgrinshpun]

Took me a while to figure out why my quotes weren't changing

I got alarmed text from my wife...

 

[madodel]

How do you know they aren't on this forum?

And according to my wife, you mean me;
she says I'm an idiot

My wife says the same about me.

 

[ValueAnalyst]

If fleet managers can reduced total cost of ownership 10% or more they will throw their mothers and those relationships under the bus.

In commercial markets it is about the bottom line not branding power or even relationships.

Relationships matter when everybody is selling widgets at almost identical prices or almost identical total cost of ownership.

Tell that to Apple who arguably produces a more than 10% better computer, but hasn't been able to break into the enterprise market. Why? What's different this time?

Having said that, I don't think Elon would get into the Semi market if he was going to cut costs by only 10%. Fuel and drivers comprise the majority of incremental per mile cost for trucking co's, and Tesla is in pole position to cut down on both.

 

[TrendTrader007]

$TSLA in April 2013 this is how nasdaq looked like
As if it were about to run over with the 10 day moving average pointing down
$TSLA this is how our current Nasdaq looks with 10 day moving average pointing down looking ready to just roll over

 

[TrendTrader007]

$TSLA this is current Tesla chart for the last three months compare it to April 2013 chart
$TSLA this is April 2013 Tesla chart a few weeks before the earnings report on May 8, 2013

 

[TrendTrader007]

$TSLA this is how the stock price behaved between April 10 and May 10, 2013

 

[Intl Professor]

My wife says the same about me.

Me to too. Is there a secret TMC widows club going on behind our backs?

 

[TrendTrader007]

$TSLA current weekly chart compare it to early April 2013 weekly chart
$TSLA early April 2013 weekly chart

 

[RobStark]

Tell that to Apple who arguably produces a more than 10% better computer, but hasn't been able to break into the enterprise market. Why? What's different this time?

Having said that, I don't think Elon would get into the Semi market if he was going to cut costs by only 10%. Fuel and drivers comprise the majority of incremental per mile cost for trucking co's, and Tesla is in pole position to cut down on both.

I will tell that to Apple that charges obscene prices. Businesses don't save money.

I didn't say Tesla Semi would cut fuel cost by only 10%. I said cutting TCO by 10% would move the market and I expect Tesla Semi will cut TCO by much larger percentage including making life easier for the driver using AP, reducing accident rates and eventually insurance rates.

 

[GoTslaGo]

Can you see how this compares to April 2013?

Finally got a chance to play with the charts (I put the green lines to show the ranges):

CBOE p/c ratio (now):


Range around 0.54 to 0.96, big jump last couple of days (mid April).

CBOE p/c ratio (April 2013):


Range around 0.575 to 0.850, also pretty big jump toward end of April 2013.

Good question!

 

[Zhelko Dimic]

If fleet managers can reduced total cost of ownership 10% or more they will throw their mothers and those relationships under the bus.

In commercial markets it is about the bottom line not branding power or even relationships.

Relationships matter when everybody is selling widgets at almost identical prices or almost identical total cost of ownership.

Agreed. Market in IT is different because incumbents(BBR) had advantage of no-need to retrain IT support falks, proven security model, and 'no one gets fired for choosibg BLackBerry' attitude. It's a supporting function, not 'this is where I'm making money and savings flow directly to bottom line'
Now pickup truck market may be harder to attack, as I assume growl of V8 is part of the manly man image that many owners will have...

 

[AnneBoleyn]

If fleet managers can reduced total cost of ownership 10% or more they will throw their mothers and those relationships under the bus.

In commercial markets it is about the bottom line not branding power or even relationships.

Relationships matter when everybody is selling widgets at almost identical prices or almost identical total cost of ownership.

I agree. Relationships only mean so much- they're capitalist. The trucking industries will move with the times or be left in the dust.
History has shown us forever alliances are easily broken when it's profitable, more productive, or something "prettier and younger," Tesla will be all of the above for these companies.

 

[TrendTrader007]

Finally got a chance to play with the charts (I put the green lines to show the ranges):

CBOE p/c ratio (now):

View attachment 222938
Range around 0.54 to 0.96, big jump last couple of days (mid April).

CBOE p/c ratio (April 2013):

View attachment 222939
Range around 0.575 to 0.850, also pretty big jump toward end of April 2013.

Good question!

Increasing level of fear is good. $VIX is also on the rise. I might compare $ViX charts too. Also just saw WSJ video from yesterday with a rather obnoxious interviewer throwing skepticism onto TSLA stock price
Skepticism is really good if everybody is a believer in Tesla and nobody would be left to buy and they would be no shorts to cover and exponential increase the stock price
All this is good for TSLA longs
Okay I just quickly compared VIX chart from current to April 2013 there is again a striking similarity VIX then from low of approximately 11 to a high of 18.56 around middle April 2013 say around April 18, 2013 or so and currently is at 15 from low of 10 point something so yes I see striking similarities
Also significant that Tesla found support right on 10 day simple moving average last week similar to April 2013 and then tesla is rising in the face of weak market this is all excellent prognosis for Tesla longs
I will post all these charts later on in the weekend
I might also do an analysis of all the last several earning reports and stock price movement from a technical standpoint only

 

[BornToFly]

Tell that to Apple who arguably produces a more than 10% better computer, but hasn't been able to break into the enterprise market. Why? What's different this time?

Having said that, I don't think Elon would get into the Semi market if he was going to cut costs by only 10%. Fuel and drivers comprise the majority of incremental per mile cost for trucking co's, and Tesla is in pole position to cut down on both.

Because you are paying 2-3x as much for a 10% better computer. Imagine if the Model S cost 3x an Audi A8 (or about $300,000). Not nearly as many Model S vehicles would have been sold, and we would not be where we are today. That is why the Gigafactory was so important. Tesla needed to get the price of batteries down so that they could sell the Model 3 at the same price as a BMW 3 series, AND provide a better car at the same time. Everyone likes getting better for the same price. Not everyone is willing to pay significantly more for slightly better. And if Tesla Semi can save a business money, they will make the switch in a heart beat.

 

[ValueAnalyst]

Everyone likes getting better for the same price. Not everyone is willing to pay significantly more for slightly better.

That makes a lot of sense. Thank you.

 

[ValueAnalyst]

Finally got a chance to play with the charts (I put the green lines to show the ranges):

CBOE p/c ratio (now):

View attachment 222938
Range around 0.54 to 0.96, big jump last couple of days (mid April).

CBOE p/c ratio (April 2013):

View attachment 222939
Range around 0.575 to 0.850, also pretty big jump toward end of April 2013.

Good question!

So is it fair to say CBOE p/c ratio is also indicative of an upcoming short-squeeze because it's pointing to shorts digging their heels before they get blown away? Is that a fair way to put it in your opinion?