Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Causalien]

Just want to point out to members not to get too worked up on the delivery numbers. We've worked ourselves into a frenzy to similar hopes before and turned out to be wrong.

The 30j rush email probably wouldn't be needed if EU and Jina delivery weren't held up. Which means we were already late to meet the normal delivery numbers that would give a slight negative EPS.

By any logic slight negative forecast with delivery delays means a larger negative EPS

 

[SteveG3]

They're saying that they want the expectations to be low so that there's a big spike afterwards.

That’s how I read the comment too.

The reality that those expectations are subject to being misrepresented and/or ignored by the vast majority of the media once the actuals come out is another twist to this discussion.

 

[KarenRei]

Working night and day:

 

[Unpilot]

There gunna do it...these bastages are going force me AGAIN to buy more stock!!

 

[elasalle]

• RBC lowered its price target on Tesla to $210 from $245
• 
  
• Tesla analyst cuts Model 3 forecast, now sees bear market in stock ahead

 

[K_Dizzle]

They're saying that they want the expectations to be low so that there's a big spike afterwards.

Are you saying shorts can’t pivot to a new shiny thing to focus on?

 

[Causalien]

This is perfectly likely to be disinformation, of course. The main problem is that I can't get enough data from China to cross-check it since I don't read Chinese (which I really should have learned, but oh well)

It's just my own experiences. Chinese companies usually have 2 sets of books.

In all my past run ins with them. When a Chinese company market itself as "the xxxx of China" You should really start scrutinizing their claims. So I usually assign a higher belivability to tgese rumours.

 

[AlMc]

SEC'''Short Enhancement Commission'...funny, probably true but ill advised...again, IMO. After the 'settlement'..just produce and let surrogates take on the SEC via twitter and just 'like' posts you agree with.

@Carl Raymond : You make the case that the tweet was ill advised. You have made no case that the tweet was 'wrong' (i.e. material. i.e. in breach of the SEC agreement).

Do you think the above referenced declaration by EM about the SEC was 'well advised'/smart/right thing to do as CEO? I get why he did it..frustration...but did it help to escalate or deescalate the relationship with the SEC ,who we all may not like But can still make our lives miserable as investors and people wanting to see the mission statement realized?

The SP reaction to the SEC contempt charge and earlier investigation have done more to lower the SP over the last several months than other FUD arguments.

Proper response, IMO, just let it go and concentrate on accomplishing the mission statement.

 

[Fact Checking]

Proper response, IMO, just let it go and concentrate on accomplishing the mission statement.

I believe this is based on the unsupported assumption that the SEC would have left Tesla and Elon alone, had he gone out and tried to "de-escalate" even more.

By documenting SEC bias and not hiding his earnest and well justified contempt at the SEC trying to engage in censorship Elon is laying the groundwork for push-back against the SEC, both from shareholders, and from (future) policy makers.

 

[Leo9]

Tesla analyst cuts Model 3 forecast, now sees bear market in stock ahead

"The brokerage cut its first-quarter Model 3 delivery forecast to 52,500 from 57,000 and slashed its price target to $210 from $245, a 14 percent reduction that implies more than 20 percent downside over the next year.

"We see both 2019 and 2020 revenue as down vs. the 4Q18 run-rate and, given Tesla is priced for growth, believe the valuation will come in," analyst Joseph Spak wrote in a note to clients. "Overall, for 2019 we now forecast about 261,000 Model 3 [deliveries], down from 268,000 prior. Our 2020 forecast of 347,500 remains unchanged."


Spak, who has an underperform rating on Tesla shares, predicts the electric car maker will post an adjusted loss of 64 cents per share, down from a prior estimate of a profit of 68 cents per share.

"Regionally, we assume 21,000 units in Europe, 6,000 to 7,000 in China and the remainder in North America," Spak wrote. "In China, some deliveries were delayed because of a customs issue."

The analyst cited recent price cuts to its popular Model 3 as evidence both of diminished demand and in reducing his earnings outlook.

"Our 2019 Model 3 average selling price is now $53,600, down from $55,500 prior – still stronger in the first half as Tesla fulfills higher-end demand internationally before lower priced models (which carry lower gross margin) kick in," Spak said."

Expectations are quite low.

 

[hobbes]

This I find a common error with non-native English speakers, here in Belgium, the up-coming Tuesday would be referred to as "next Tuesday", where as in English this indeed refers not to 26/3, but rather 2/4.

Correct usage is: Tuesday, next Tuesday, the Tuesday after next.

Feel free to nit-pick my FR, NL, D and DK too...

I constantly have this discussion with native German speakers regarding the same ambiguity in German... Only way out IMHO: Use Lojban Lojban - Wikipedia

 

[SteveG3]

• RBC lowered its price target on Tesla to $210 from $245
• 
  
• Tesla analyst cuts Model 3 forecast, now sees bear market in stock ahead

From RBC,

“ “We see both 2019 and 2020 revenue as down vs. the 4Q18 run-rate and, given Tesla is priced for growth, believe the valuation will come in,” Spak writes.”


Dozens of us here could with lazer precision walk through how extremely improbable that statement is and how widely contrary to what is near ‘certain’ to occur.

Guess that makes us feel a little better.

However, is that an effective response?

Wont we have far more of a constructive impact by raising awareness of the enormous fountain of misinformation polluting public perception of Tesla/TSLA/Musk/TeslaProducts so the public doesn’t unknowingly drinkup/swim in that misinfo sludge rather than trying to chase down and towel off every puddle of polluted rubbish coming out of that fountain?

 

[elasalle]

From RBC,

“ “We see both 2019 and 2020 revenue as down vs. the 4Q18 run-rate and, given Tesla is priced for growth, believe the valuation will come in,” Spak writes.”


Dozens of us here could with lazer precision walk through how extremely improbable that statement is and how widely contrary to what is near ‘certain, to occur.

Guess that makes us feel a little better.

However, is that an effective response?

Wont we have far more of a constructive impact by raising awareness of the enormous fountain of misinformation polluting public perception of Tesla/TSLA/Musk/TeslaProducts so the public doesn’t unknowingly drinkup/swim in that misinfo sludge rather than trying to chase down and towel off every puddle of polluted rubbish coming out of that fountain?

This note is whats likely tanking the SP pre-market. Of course from our point of view this is all FUD.

 

[jbcarioca]

But China does not think of their automotive segment as "theirs" in terms of national identity, and is, very importantly, not exporting the vehicles in any significant quantities (yet...).

This decouples China from other countries like Germany, France or Japan who are depending on automotive exports as a key pillar of their economies.

I.e. to China the domestic automotive sector is basically "just" a social service, a piece of infrastructure and employment vehicle they don't feel particularly strongly about, and which they are willing to reshape as necessary - without many external dependencies. This is why they invited Tesla into the country and are building a Gigafactory for them for free.

Neither Germany, France or Japan is able to do that.

This is a rare post from @Fact Checking that completely misunderstands the facts. China is most definitely considering motor vehicle exports and global vehicle markets as fundamental. Their prototype is similar but not identical to those of Japanese and Korean motor vehicle producers before them. They have gone first to the most price-sensitive markets and gradually move upscale. They also have bought other brands from which to base inroads without so much prejudicial baggage. Acquisition examples: London Taxi, Volvo. Major market launch example: Chery Brazil. Caoa Chery
Chery International
Check out Geely if you really think Chinese car companies are not exporting and producing abroad.

When considering automotive BEV batteries, electrical components, Busses (including electric ones) and so on it becomes absurd to underestimate the Chinese capabilities.
https://www.forbes.com/sites/willys...derestimate-chinese-auto-makers/#8902fccec96e

OK, I might be biased because I regular rent BEV's (BYD e6) in Fortaleza, Ceara, Brazil. Fortleza also has large wind power production FWIW.
http://www.vamofortaleza.com
https://www.fortaleza.ce.gov.br/not...s-estacoes-de-carros-eletricos-compartilhados
Those two are in Portuguese but the cars are the BYD e6 and Zhidou L7e-80
https://www.electrive.com/2018/04/26/zhi-dou-looking-in-europe-for-new-manufacturing-location/

Rather than continuing to list websites I have a last comment: in 1977 I was driving a Hyundai Pony in Kuwait. Nobody in the US had ever even heard of Hyundai. In 1967 I had a Honda S600 in Thailand. People in the US thought they just made small motorcycles. Please learn from history.

In my opinion Tesla has had such excellent reception in China because Tesla has open patent access, is more advanced than anything else and has little ideological bias nor ethnic claim of superiority. Clearly no Chinese competitor in automobiles today is superior to Tesla; BYD drivers who have Tesla experience know that.

In 1959 the Toyota Crown was sold in Hawaii; I drove one soon after I got my driving license, it was awful compared to the 1955 Ford I had driven before it.
No person I know who has had remotely similar history with Japanese cars first, then Korean next has any doubt whatsoever about Chinese capabilities.

End of rant!

 

[SPadival]

• : Jim Cramer has gone mostly silent about Tesla since he attacked the federal judge hearing "SEC vs. Musk". Maybe his lawyer called him and explained to him that given the ... overly honest videos circulating where Cramer is admitting how short sellers are manipulating the market it's not the ... brightest of ideas to troll federal judges? Just in case she might be hearing ... his case in the future? (Link.)

Did you miss the trolling? I took one for the team and got blocked by The Jim Cramer

S Padival on Twitter

Elon Musk on Twitter

 

[Chocochip]

Update:

A predictable TSLA "downgrade" just in from a Tesla perma-bear:

RBC Capital analyst Joseph Spak lowered the price target on Tesla (NASDAQ: TSLA) to $210 (from $245) while maintaining an "Underperform" rating after lowering their Q1 delivery estimates by 8.5%.

Spak cut their 1Q19 Model 3 delivery forecast to 52.5K from 57K, versus the consensus 58.4K. The analyst cited "meager demand and some M3 delivery issues abroad."​

Firstly, Joseph Spak only ever had 'hold' and 'sell' ratings on Tesla, which is perhaps not surprising given RBC's occasionally reported Tesla short position.

Secondly, his 52.5k deliveries expectation is in stark contradiction with:

• Elon's email suggesting a record Q1 delivery push which includes North America,
  
• Gigafactory sources reporting consistent 6k-7k Model 3 battery pack production,
• 16 ships carrying somewhere between 38k and 52k cars, and all but one ship having been unloaded already and the final ship due to arrive in about 30 minutes at Tianjin,
  
• Alpha Hat measuring 11.5k January U.S. deliveries alone,
• Bloomberg projecting ~75k production in Q1.

BTW, we now know that with about a week to go until the Q1 production & deliveries report current Wall Street consensus for deliveries is 58.4k units.

I just received this in my inbox; for once, the add looks fitting:

I hope someone holds on to all these delivery estimates until after the first week of April, and just points to them on some online social media platform with large dissemination. And laughs.

 

[Driver Dave]

Boudette is confirmed skeptic when it comes to Tesla.

Skeptic is fine, but he shouldn't be writing Business articles for the times.

Opinion is fine, but he shouldn't be used as a journalist, because he obviously is not a real one.

He needs to be a skeptic of the skeptics and get more objective.

Seriously, what's going on at the Times with Tesla?

Today's article is not reporting, it's just nuts.

Why do they let this Boudette guy, who seems to find it hard to see anything beyond his own pre-conceived notions, write for them? Is he getting paid off by the auto industry?

I mean, he refuses to see seasonality and world wide deliveries as factors.

I guess there is no story or click bait headline with actual reality thrown in there?

Times please, I like you, please just get your reporters to report, not spin their own takes using partial data points and slap at on top of business section.

And Boudette, Tesla is not Theranos, you aren't going to write an article that gets made into a movie. Tesla is actually making amazing products, forward thinking tech and network of real superchargers, that millions of customers want. It is real. And your cherry picking data points while ignoring others ain't going to make it not.

You are Theranos.

Tesla Sales Slump as ’19 Starts Is Hinted At in State Data
Neal E. Boudette
Tesla Sales Slump as ’19 Starts Is Hinted At in State Data

Of course CNBC picks this up this morning as:

"New York Times Reports Sales Slump"

Instead of:

"Noted Tesla Hater Makes Up Conclusions Based On Partial Data"

 

[anthonyj]

Reminds me of when everyone was downgrading Apple stock a few months ago, and now they’re upgrading

 

[elasalle]

macro related
yield curve (main thing that caused markets to tank last week Thurs,Fri)

Bloomberg - Are you a robot?
There’s Danger in Misreading the Inverted Yield Curve
It doesn’t necessarily signal that a recession is on the way


I think it will take few days to reverse.

 

[Fact Checking]

"Regionally, we assume 21,000 units in Europe, 6,000 to 7,000 in China and the remainder in North America," Spak wrote. "In China, some deliveries were delayed because of a customs issue."

I pointed out the inconsistencies in his deliveries estimate here:

Update:

A predictable TSLA "downgrade" just in from a Tesla perma-bear:

RBC Capital analyst Joseph Spak lowered the price target on Tesla (NASDAQ: TSLA) to $210 (from $245) while maintaining an "Underperform" rating after lowering their Q1 delivery estimates by 8.5%.

Spak cut their 1Q19 Model 3 delivery forecast to 52.5K from 57K, versus the consensus 58.4K. The analyst cited "meager demand and some M3 delivery issues abroad."​

Firstly, Joseph Spak only ever had 'hold' and 'sell' ratings on Tesla, which is perhaps not surprising given RBC's occasionally reported Tesla short position.

Secondly, his 52.5k deliveries expectation is in stark contradiction with:

• Elon's email suggesting a record Q1 delivery push which includes North America,
  
• Gigafactory sources reporting consistent 6k-7k Model 3 battery pack production,
• 16 ships carrying somewhere between 38k and 52k cars, and all but one ship having been unloaded already and the final ship due to arrive in about 30 minutes at Tianjin,
  
• Alpha Hat measuring 11.5k January U.S. deliveries alone,
• Bloomberg projecting ~75k production in Q1.

BTW, we now know that with about a week to go until the Q1 production & deliveries report current Wall Street consensus for deliveries is 58.4k units.

But the additional numbers you quoted are even more crazy:

• Spak is assuming 21,000 deliveries in Europe, 6,000-7,000 in China and the rest, 24,500-25,500 in North America.
• Alpha Hat has reported (S/3/X) 11,500 deliveries in the U.S. only for January. Let's assume that 9,500 of that are Model 3's. Canada has reported an estimated 4,700 units for January and February - let's assume 4,000 of that are Model 3's.
• This leaves only 11,000-12,000 deliveries in the U.S. in February and March - which period by seasonal pattern carries about 80% of Q1's volume... That's nonsensical.

He appears to be off by about 20k units, which is quite a feat.