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

[gerebgraus]

PwC audits both Tesla and Ford and in this year's 10K audit opinion letter for both companies, they included wording on how they audit the warranty accrual. They acutally bring in audit experts with specialized skills in this area to audit the accrual. Here is the wording from the Tesla audit opinion letter (I've bolded sections that I felt were important):

....These procedures included testing the effectiveness of controls relating to management’s estimate of the automotive warranty reserve, including controls over management’s estimate of the nature, frequency and costs of future claims as well as the completeness and accuracy of actual claims incurred to date. These procedures also included, among others, testing management’s process for determining the automotive warranty reserve. This included evaluating the appropriateness of the model applied and the reasonableness of significant assumptions, including the nature and frequency of future claims and the related costs to repair or replace items under warranty. Evaluating the assumptions related to the nature and frequency of future claims and the related costs to repair or replace items under warranty involved evaluating whether the assumptions used were reasonable considering current and past performance, including a lookback analysis comparing prior period forecasted claims to actual claims incurred. These procedures also included developing an independent estimate of a portion of the warranty accrual, comparing the independent estimate to management’s estimate to evaluate the reasonableness of the estimate, and testing the completeness and accuracy of historical vehicle claims. Procedures were performed to test the reliability, completeness, and relevance of management’s data related to the historical claims processed and that such claims were appropriately used by management in the estimation of future claims. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of aspects of management’s model for estimating the nature and frequency of future claims, and testing management’s warranty reserve for a portion of future warranty claims.

But all this should still leave room for the company to play a little with the reserve in case they are willing to make the numbers in one quarter a bit worse in exchange to make the next quarter better?
--

Tesla introduces regularly new tech. that initially have higher defect rate, but they have the best processes to reduce the defects dramatically and fast. (e.g. OTA is not one sided with updates, but it monitors the car and reports back, so Tesla has a much better ability to measure the quality of parts and find what is needed for improvement, and they can trust their service centers much better about reporting back warranty issues.)

 

[AlexS]

About 2 weeks ago I was wondering who were the big whales that triggered the rally from mid-December:



This post by FC mentions Capital World Investors filed a 13F about crossing the 5% threshold:



So I went and looked if they were the triggering whale, but it seems they have only increased by a relatively small amount, so they probably have been slowly gathering their shares over time and just happened to cross the threshold recently.

On the other hand, I do see some big moves in the table at the link:

View attachment 511063

1. Susquehanna Securities (+3.1 million shares),
   
2. Royal Bank OF Canada (+2.8 million shares) and
   
3. UBS Group AG (+2.1 million shares)
   
   seems to be the biggest changes.

RBC and UBS hold PUTs not shares, and RBC date here is q3

 

[scaesare]

Those who are from a different era may remember when those uppity Californians of the ...late 60s???...called PGE something like Pigs Grunts & I cant remember the third.
It has skewed my attitude toward that company ever since.

It seems my attitude was not misplaced.

Around our family it was "Pacific Graft & Extortion"

 

[Singuy]

I'm surprised that Renault is having such troubles now, because it's one of the best performing automakers in terms of CO2 (source), idem for its Nissan partner.

This is sad because it seems that companies who made the best efforts to electrify their lineup (Nissan + Renault) are paying higher cost than laggards (like PSA + FCA).

Other EU manufacturers like BMW and Daimler are in pretty bad position too, although they may have bigger margins for the moment. Daimler has to work the hardest (cf. their recent dividend cut, and the lack of battery supply for the EQC) but they at least realize that they will have to fully switch to BEV at some point. BMW now say they want to offer all kind of vehicles for decades: ICE, hybrids, etc.

VW appears to really try to catch up with Tesla, with the right strategy. IMO, they have the best chances to survive the upcoming recession.

Japan: Except Toyota, all manufacturers might face big troubles in the next few years. Toyota won't have to pay big fines soon, but their lack of commitment (to say the least) is astonishing. They seem to wait for other manufactures to go bankrupt before deciding to go electric, at the risk of letting Tesla taking an unsurpassed lead.

Volvo will certainly be saved by the Geely merger.

We'll know the fate of GM and Ford when they'll reveal their EV trucks, and when Cybertrucks will be running the streets. Ford seems to be working on a standard F-150-like truck but they'll probably disappoint in terms of features, range and price (like the Mach E vs Mode Y). GM is just having fun with their PR team, dreaming about a comeback of the Hummer brand. They also believe their Cruise tech will save them…

This is my ill-informed musings. Feel free to correct me or share your thoughts.

Japanese cars biggest competitive advantage is their reliability. Unfortunately, Nissan/Infiniti ranks the lowest among the Japanese manufactures PRIOR to the Renault take over and now it has gotten ridiculously worst. I will never touch another Nissan since my infiniti has been the most unreliable car I have ever purchased, leaving my wife stranded multiple times under 60k miles and this was after a full transmission swap already at 20k miles. Absolutely ridiculous, they are FCA of the Japanese world and deserves to die off.

 

[rsm287]

Another good video by Rob Maurer on Tesla Daily Podcast:

Tesla Raises $2+ Billion: Everything You Need To Know (TSLA)

 

[gtrplyr1]

Neither guy is very good at stating their case. The poor host were making their points for them. That was tough to watch haha

Munster is a good analyst, and I say this with contempt for most analysts.

Gene gets it ... he's been ahead of the curve with AAPL and now TSLA ... The host did a lousy job and Gene was being polite but really Irwin is so clueless it was pointless to try and even debate him.

Cheers to the longs ....

For all those following Irwin's advice ... thanks for your money, it will go to good use towards my kid's college educations.

 

[Krugerrand]

Tesla beginnt zweiwöchige Waldrodung in Grünheide

Excerpt:

Environmental Agency: Tesla begins two-week forest clearing in Grünheide
14.02.20 | 1:45 p.m.
No sooner had the environmental agency given the green light than the first trees fell on the site of the future Tesla site in Grünheide. The ministry made it clear that Tesla could get started "at your own risk" - because an important approval is still pending....

There's some short video clips of the harvesting - they appear to be working 24/7.

I marked that funny though I think it’s hilarious. Anybody telling Elon/Tesla they can go ahead and do something but ‘at their own risk’ might have just as well said ‘Simon says get it on!’

‘At their own risk’ caused this image:

 

[KarenRei]

Man, the stock sure is tightly pinned this morning...

 

[Dan Detweiler]

Ahhh...$800, there you are. I missed you.

Dan

 

[gtrplyr1]

BTW, with this whole debate regarding the secondary offering.

Why now? Maybe ... and yes I'm guessing here.

Tesla realizes the demand for cyber truck is greater than expected .... wants to get it off the ground faster than originally planned. In addition we know that Model Y is ahead of the original timeline. Tesla needs somewhere to make the cyber truck ... TX perhaps ??? (just a little guess) .... ok TX it is .. how do we fund? well a secondary offering would get it off the ground very quickly.

Just a thought ...

Cheers to the longs

 

[Robbbin90]

the struggle for 800 is real
Best valentine gift would be a close above 800 today (And After-Hours)

 

[Unpilot]

So thoughts on tomorrow....did the price get set at 800?
Will we have a MMD?

Are dog's really smarter than cat's?

Man, the stock sure is tightly pinned this morning...

Oracle....what

 

[gerebgraus]

Craig says that TSLA has no structural or strategic advantages.

I wonder whether he believes that.

 

[Artful Dodger]

TSLA SEC Filing Details: Form 424B5
Filing Date: Feb 14, 2020

"Form of prospectus disclosing information, facts, events covered in both forms"

0001193125-20-036491 | 424B5 | Tesla, Inc.

 

[mickificki]

BTW, with this whole debate regarding the secondary offering.

Why now? Maybe ... and yes I'm guessing here.

Tesla realizes the demand for cyber truck is greater than expected .... wants to get it off the ground faster than originally planned. In addition we know that Model Y is ahead of the original timeline. Tesla needs somewhere to make the cyber truck ... TX perhaps ??? (just a little guess) .... ok TX it is .. how do we fund? well a secondary offering would get it off the ground very quickly.

Just a thought ...

Cheers to the longs

I believe Gali from HyperchangeTV said the 10-K stated that tesla plans $2.5 to $3.5 in capital expenditure this year and in the following fiscal years to come. Just a massive amount of $...

Is it a coincidence that Tesla seems to be doing much better fiscally now that Kirkhorn is CFO? This common stock raise was timed perfectly.

 

[LJS22]

the struggle for 800 is real
Best valentine gift would be a close above 800 today (And After-Hours)

I think 809-810 is showing heavy resistance. It can run if it gets through.

 

[Krugerrand]

Oracle....what

I know you’re thinking pretty highly of yourself lately and technically you’ve got a right to it. However —

Never mind. It’ll be more fun for me if I keep it to myself. I’ll just crouch down in the weeds over here and wait for my opportunity to pounce.

More on topic: lots of talk about a Texas Gigafactory and while Texas was in the running against Nevada for Giga 1, I’d think a more centralized eastern location would better serve logistically. As well several eastern states are economical and have plenty of workforce.

 

[Fobble]

Craig says that TSLA has no structural or strategic advantages.

I suspect Craig Irvin will join Gordon Johnson research firm soon. Their arguments on Tesla are very similar

 

[Cosmacelf]

Tesla prices its secondary offering at $767 a share

Coincidentally that’s the exact price I paid for my shares when I bought them yesterday. I bought them about 30 minutes after the open, so I wasn’t quick on the draw or anything. My point being that you’ll see headlines today saying the offering price is at a 5% or so discount to shares today. That’s meaningless and just an attempt to make Tesla look bad as if they had to discount their shares. There was no discount. That price (and even lower) was available to any retail investor yesterday after the share offering announcement.

 

[TheTalkingMule]

Pretty amazing SP resilience today. We should be dragging all the way down to max pain, but MM seem to be having a tough time moving it. No idea where that is today, but I assume around $770.

Imagine how tough it'll to to manipulate this stock once it's in the S&P500!

Closing above $800 today will be a monumental accomplishment.