TSLA Market Action: 2018 Investor Roundtable

[dqd88]

Bunch of morons running that company. Their stock and sales are in the toilet, so they pay an actor tons of money to do what? convince the world they are actually the car company of the future? I don't think so.

Just like when Samsung would take shots at Apple .... Ford is feeling the heat and no amount of high paid endorsees will stop what is about to happen to them.

Cheers to the longs

My thoughts on what Ford should do....

* go private
* halt dividends
* put all cash into Tesla ($10-20B)
* milk ICE (namely loyal truck buyers) for as long as possible, ride it into the sunset

Sounds crazy, but I think it would actually be the best financial outcome for them in the long run.

 

[ThereAre4Cars]

I'd be curious to see just how much of a decline in f150 sales Ford can financially tolerate because it's probably going to be tested. 150b$ revenue and 30b$ market cap is nuts.

 

[EVNow]

the kidnapping of all the Saudi billionaires in the hotel

Not just any billionaires, they are royal family. MBS basically imprisoned a lot of his cousins.

 

[SpaceCash]

Not just any billionaires, they are royal family. MBS basically imprisoned a lot of his cousins.

Not to toot my own horn too much, but when Elon said he was thinking of taking the company private, I KNEW it would not actually happen, but I did buy calls in anticipation of some exciting upward movement. As a veteran who has in fact been over there, I don't think very highly of Arab culture at all, and I'm super glad they in fact did not take Tesla private. They have a lot to work out over there.

 

[Brando]

reminder - how auto industry see the auto market

 

[sub]

Tesla acting very well all things considered. Congrats to those who held. I'm over on Twitter fighting TSLAQ the best I can ever since Elon started to act somewhat more rational. If he can keep his tweets rational and deliver a product, I see good things happening. If he lashes out again with an incredibly stupid tweet, I will be selling shares yet again and reconsidering my faith in the man. Good luck to all.

Stop trying to state as a fact that Elon has tweeted “irrationally” unless of course you want to look completely irrational.....oh wait, let’s check your posting history shall we? Nah, I’ve got better things to do but for those that are new here there have been a few melt downs by CA in the past.

I’ll say it again, if you think you can psycho analyze someone via reading their twitter account then you are a fool.

 

[EVNow]

As a veteran who has in fact been over there, I don't think very highly of Arab culture at all

Be careful to separate individuals from the culture of a group of people - dating back to the birth of civilization.

 

[sub]

Ahh, now that I’m caught up, and was only able to do so by skipping 50-100 pages in the last week or so, I would like to add something to the conversation that has even the slightest chance of being useful.

In response to the Smokey one, though papafox does a great job destroying this clowns arguement that shorts don’t affect TSLA sp, I’ll put this concept out there and call me a clown if I’m seeing it wrong.

The 30m+ shares of TSLA sold short could really be a much smaller % of shares that are actually allowed to be borrowed. AFAIK, there is no rule how many time a share could be sold short correct? So theoretically, one share could be shorted 30m times. Irrelevant to following point.

When a long buys a share of TSLA, the share count does not become 169,999,999 shares, making them more scarce. Yes, you could argue that some longs “never sell” but there is a price for everyone. However, when a short shorts a share, the theoretical number of shares becomes 170,000,0001. This dilutes TSLA, and basic econics says therefore TSLA share value will drop. It is an unequal affect. Add in all the manipulative ways in which shorts sell and scare weak longs Into lighting their money on fire, and they have a big affect on TSLA.

The only part of this that I think sucks is that all the anonymous haters/shorts of TSLA will simply slither off once they are crushed and we will have no opportunity to point and laugh. I Guess the few known shorts will have to take it all for the team.

 

[Singer3000]

(Emphasis mine.)

Well... I actually disagree? There are a lot of gradations between
-- full, totally functional democracy with very strong rule of law, like Switzerland
-- absolute, practically lawless dictatorship like Saudi Arabia

China is one of many, many countries which is somewhere in between.

Frankly, so is the US.

There are various "democracy rankings". The Economist did one in 2010; Saudi Arabia was at rank 160, 7th from the *bottom*, keeping company with Equitorial Guinea, the Central African Republic, Myanmar (which is committing multiple genocides), Uzbekistan, Turkmenistan, Chad, and North Korea. China was up at rank 136, near Azerbaijan, Egypt, and Vietnam because it has a political culture and political participation.

The important point for this purpose is that China has an extremely strong, and very old, legal tradition. Despite one-party rule, people can get absolutely furious, and fight in court a lot, if property is taken without proper procedure and compensation, or if laws on the books are not enforced (as was happening with the environmental laws until recently). A lot of the fight for human rights in China is done by lawyers fighting to enforce laws already on the books. And judges *do* rule against the Chinese government.

Saudi Arabia officially doesn't *have* laws on the books. They claim that the Koran is the Constitution and use Sharia for most rulings, supplemented by royal decree. This wouldn't be so bad if they used any of the traditional Islamic systems of jurisprudence (which ended up being quite a lot like English common law in many ways). But they don't. Because the extremist Wahhabis have controlled the legal system in Saudi Arabia since day one, they have ended up with a system where the judges are not bound by precedent or text or legal tradition, and simply act as agents of either the Wahhabis or the king.

Given this, which country is safer to make a business deal with?



A battery deal would be OK. Saudi history treatment of workers is worse than China (workers actually do have substantial rights in China -- and generally no rights at *all* in Saudi Arabia), so I'd be uncomfortable with a factory.

You are right that there are graduations in between. But I have to say I think you are wearing rose tinted glasses when it comes to China. The current government there is quite a different animal to the last couple of decades. It has shifted from one party to one person rule staggeringly quickly.

Whether this stands for anything much when it comes to a multinational making an investment decision is another matter.

None of this is really for Market Action but at this point the thread should probably just be renamed/merged with the General Thread, with a new one called Short Term Traders.

 

[humbaba]

Be careful to separate individuals from the culture of a group of people - dating back to the birth of civilization.

Off topic, but its Sunday... One of the things I found interesting was that many arabs dislike what they view as arab culture (in favor of what they view as Islamic). While arab tribal culture definitely has its downsides there are, IMO, some serious positive points. (For example, arab culture is basically positivist and values children.)

Anyway, there's my short diversity PSA

 

[Oil4AsphaultOnly]

Something about this doesn't add.

Let's simplify to illustrate.

Let's say there's 10 shares at IPO for Long Corp.

John buys all 10 shares. He then lends 5 shares to short seller Bob. Sam buys said 5 shares from Bob.

End result:
John owns 10 shares
Sam owns 5 shares

Now there are 15 shares floating, instead of the original 10.

What am I missing?

That's an over-simplification, since 5 of John's shares are not under his control. if he decides to sell them, it triggers a share recall that forces bob to offer a price high enough for sam to sell his shares to bob, so that they can be returned to John, for John to sell to someone else (or john sells his lent shares to bob to cancel out the borrow).

the point is that although there's 15 shares to account for, there aren't really 15 shares "floating"/available.

 

[davecolene0606]

[

New Ford commercial is trolling Tesla. Even uses paint it black.

What sad commentary on closed minded Luddite short sightednes

Really... it makes me sad

Fire Away!

 

[X Fan]

The reasons people buy Tesla’s may vary, and sure there are conservatives that buy them. However, I’m willing to wager that outside of the MSM, an overwhelming percentage of Tesla haters are conservative due to the “green” part of course.

Might be true but NY Times, WaPo and LA Times are a big part of the FUDSTER crowd.

 

[humbaba]

Might be true but NY Times, WaPo and LA Times are a big part of the FUDSTER crowd.

Oh, so true. Politics has always made for strange bed fellows.

As we get closer to market open I am reminding myself to keep an eye on the stock price -- there've been several movements that have taken me by surprise and I wouldn't want to miss it if it goes below $250. Contrarily, I've inadvertently put myself in a small bind, so if the stock rises too it will be advantageous to sell some stock.

Here's looking forward to the earnings call, whenever that may be!

 

[Buddyroe]

However, I’m willing to wager that outside of the MSM, an overwhelming percentage of Tesla haters are conservative due to the “green” part of course.

Oh, you're 100% right about that.

 

[S3XY]

And for insights into traditional US automaker management

Bob Klutz "All 3 US car companies...". Apparently he forgot about Chrysler.

 

[RobStark]

I'd be curious to see just how much of a decline in f150 sales Ford can financially tolerate because it's probably going to be tested. 150b$ revenue and 30b$ market cap is nuts.

Ford Motor cash (and equivalents) on hand for the quarter ending June 30, 2018 was $36.476B. Market Cap as of 10/19/18 was $33.88B.

Ford's business is worth -$2.676B.

 

[KarenRei]

Ford Motor cash (and equivalents) on hand for the quarter ending June 30, 2018 was $36.476B. Market Cap as of 10/19/18 was $33.88B.

Ford's business is worth -$2.676B.

Where's a good hostile takeover when you need one....

 

[mongo]

Bob Klutz "All 3 US car companies...". Apparently he forgot about Chrysler.

Chrysler that became DaimlerChrysler that became FiatChrysler? Main HQ is in the Netherlands, financial HQ is London.

 

[Fact Checking]

I don't think the size of this (ICE loan securities) is anywhere near the subprime mortgage securities of 2005-2008; the economy will be able to absorb it much better.

RE OEM decline - I think they will continue throwing billions of dollars at electrification, further creating jobs and stimulating the economy. Some will fail, some will merge, and some will make the painful transition. But overall, I don't see a recession/depression coming due to ICE decline. New jobs in EV and solar will help offset impact of ICE decline as well.

I agree wrt. recession risk, I think the key metric to follow are delinquency rates of auto loans:

"Other loans" are where consumer auto loans are hidden. So after the 2008-2015 Big Consumer Deleveraging auto loans are in a pretty good shape and it will probably take years for these loans to deteriorate significantly for them to directly cause a recession.

But indirect recession risks are possibly higher, for the Big Three.

We know that much of the recent rise in auto loans:

Is apparently not consumer loans and not from commercial banks:

Note how the latter plateaued, and note the gap of ~700b dollars. I.e. it's probably business loans.

Yet consumer auto loan amounts are increasing:

I.e. in the consumer space fewer, presumably wealthier consumers with better credit are keeping up the flow of loans. Maturities are also expanding, average is at 60 months - was 55 months 5 years ago, which is a significant shift.

But these are the demographics who are able to pay for $40k+ cars the most, and these are the consumers who are the least affected by recessions - and these are the ones most likely to buy a Tesla or other premium EVs.

So in the next recession traditional ICE OEMs in the U.S., and their "captured" financing arms like GM Financial, might be more exposed to credit risk and they are also more exposed to losing the high margin sales of the $30k+ new car market to the expanding EV market - especially once the Model Y SUV and the Pickup are sold.

(At least that's my tentative reading of the data, which might be wrong.)