TSLA Market Action: 2018 Investor Roundtable

[dc_h]

Graun' readers by any chance?

Crazy days and nights perhaps. Reports there make Elon out to take on the party side of Iron Man pretty seriously. Ironically the site is thought to be run by Robert Downey Jr. my wife follows and gives me the latest.

 

[MP3Mike]

True they can turn it back on, but Tesla knows immediately and can disable until the next time they turn it back on.

Fire Away!

Normally the hackers disable/block the Tesla control/VPN since it provides no value. That prevents Tesla from being able to adjust things remotely. (It is not like Tesla provides salvage cars any value for the VPN, no updates, no app support, etc. so you don't lose anything by blocking Tesla's access.)

 

[Tslynk67]

Ok guys, what about a new thread called "FUD-Fighter" or "Pravduh-help" where FUD news ontwitter is being placed, when some reasonable "defudding" help is needed?

There's a few of us very active on Twitter fighting the BS, feel free to follow me @AskDrStupid

 

[Tslynk67]

And thus it seems my fair price target today for Tesla remains $420, as that’s been on the table, and it appears it could’ve gone through. Now only if Mr. Market agreed with me.

Not sure I believe in the hold/sell pattern of some of the large institutions, because even if they couldn’t stay private, they would’ve enjoyed a nice premium on their investment once they got bought out.

I do advise everyone who can to keep a sharp eye on Monday to see what transpires with the SP, though. I personally will be waiting again for a large dip, but who knows, maybe it won’t happen.

What I find more interesting is that the general sentiment over the last week was that $420 was a ridiculously low offer for those forced out should $TSLA gone P.

 

[Kalllagtunet]

You’ve already lost.

No position so I'm fine thank you!

 

[Ratanpara]

Visited Springfield NJ service center, I have scheduled M3 delivery on September 8th, I just wanted to look at Pearl white M3. Talk to rep for few minutes, they are delivering 10-15, M 3 per day. Lot of test drive happening, one family was talking to Tesla representative for extend period after test drive, it’s an indication , once you test drive M3 you are sucked into buying it.

 

[Tslynk67]

Happy to help, but do you have any instructions on HOW to help for those of us not schooled in Twitter warfare? I've liked your (and others' that I agreed with) posts in that thread (and congrats on getting a great reply from Elon). What else can I do?

Thanks, but when you see some FUD posted, just respond back with the facts. When you see someone state a negative opinion - "Elon is a fraud" seems to be the favourite - point out that you don't believe this to be the case and ask for what factual evidence they have to back this up. Usually they go away, sometimes they'll come with some half-assed news story from a few years ago.

Reminds me the time I debated with Larry Fossil - his only "factual" argument over Elon being fraudulent was over the tex credits Tesla were receiving for the battery swapping capability. That was it, he was foaming at the mouth over it. In the end he just blocked me, then he was gone. Poor bloke, he'd be having a lot of fun right now if he was still on Twitter

 

[dc_h]

The term is "Chinese Wall".

Chinese wall - Wikipedia

Term is as you like, but if you are advising publicly, you are supposed to state your stake.

 

[sdtslafan]

The market which didn‘t use the quick profit from 320 to 420 is going to reward TSLA now when the hope for 420 BO is gone ?

Good awakening tomorrow

I think most of us, even bulls like myself, see this recent private saga as evidence of instability. That is a bad thing and should negatively affect the stock price. The complicating factor is that model 3 is over the hump which is an unexpected positive. By pushing Tesla to reach 500k model 3s per year by 2018, it looks like Elon has ensured that Tesla will crush its original target of 500k per year by 2020. Now we really need to see that the cars can be made profitably and with high quality requiring little repair, service, and warranty expense. If tesla can become an expert at manufacturing reliable products which do not in turn burden its limited service capacity, then it will thrive.

 

[MikeQ]

Well it is nice of him to give the kid a 2 year old car anyway lol. Maybe it is taxes.

Or just leave the car in old man's name and have the kid pay the insurance until 25. I don't think you'd have to title it in his name.

He'll be in school for a long time (PHD). He's going to be a dependent on our returns until 24 so yeah, it's titled in my name and will likely stay that way even after he drives it. Yeah, I know that opens us to liability but that's what insurance is for.

It has nothing to do with gift taxes. I wanted to get the $7500 tax credit before it runs out. We'd be buying the car next year so why not just get it now for $7500 cheaper?

Plus you can get out of any gift tax with the estate tax exemption.

 

[sundaymorning]

Ok, I've now read the NYT article, and: wow, just wow!

Some factoids mentioned in this article are weakening the short thesis and are strengthening the bull thesis significantly:

• European carmakers approached to invest in Tesla: "And while several big carmakers approached Tesla about funding a deal, people familiar with the discussions said, there were issues there, too. Some of those companies have their own reputational baggage. And Mr. Musk, proud that Tesla’s cars are made in America, did not want to let foreign interests dictate his decisions about manufacturing."
• Speculation: I think "Volkswagen" and "Daimler" are the main European car companies that have"reputational baggage". (BMW and the smaller ones don't really.)
  
• Beyond the Saudi PIF, other sovereign funds were interested in Tesla going-private: "As Tesla representatives reached out to officials at the Saudi fund and other sovereign funds, it also became clear that they might want more than just Tesla equity in exchange for an investment. Some, said someone briefed on those talks, would expect Tesla to open manufacturing operations in their countries, for example."
• The NYT author, David Gelles, tries to spin these as negatives but also provides more hard evidence of his bias: for example nowhere does he disclose that the person he used for negative Tesla quotes (Jeffrey Sonnenfeld, a professor at the Yale School of Management) who has close ties to Jim Chanos, one of the biggest short sellers in TSLA. Does the NYT and the SEC even care about such blatant market manipulation?
• The big institutional investors who'd likely not have been able to stay with a private Tesla are "T. Rowe Price, BlackRock and Fidelity.". These institutional investors were likely in a 'hold' or 'sell' trading pattern for the last 2.5 weeks - and could be back on the market on Monday.

Note that all these new investors, sovereign funds and European carmakers, were seeing Tesla worth at least $420 per share!

Price action on Monday and over the next week is going to be very interesting ...

By being advisors to Tesla, Elon got Goldman Sachs and Morgan Stanley to indirectly admit Tesla is worth $420 privately.

 

[beachbum77]

Term is as you like, but if you are advising publicly, you are supposed to state your stake.

You are confusing the two sides of the fence. Analysts are not even supposed to know if the company has a stake. That is what would indeed create a conflict of interest.

 

[Causalien]

I think this is fundamentally wrong: while the Chinese Gigafactory is in Shanghai, it's not in the Shanghai Free-Trade Zone (which is subject to tariffs), but on mainland China. Tesla will be a 100% foreign owned but domestic carmaker in China.

So not only will tariffs be 0%, but Tesla cars will also likely be able to get the EV incentives of domestic Chinese EV carmakers, which are very generous: above $7,300 per car:

vincent on Twitter

... because the incentives scale up with battery range and Tesla is able to reach the highest incentive category.

Also note that Chinese EV incentives are not tax incentives like in the U.S., but are directly given to carmakers, regardless of the tax bracket of the person purchasing the car. This widens the number of customers who are able to purchase Teslas.

This is why the Chinese Gigafactory, 100% owned by Tesla, is such a big deal - the Model 3 will be able to reach literally 10x-20x more customers in Chinese market, because instead of $140k starting prices the effective starting prices will be in the $25k range ... Profit margins will also be much better, because instead of 40% of the purchase price being lost to tariffs, there's effective negative tariffs due to the EV incentive. On a $50k ASP Model 3 the incentive plus Tesla's position as a domestic manufacturer is equivalent to an about -15% tariff.

This is what Elon's trip to China and Beijing and his meeting the #2 Politburo member in the Chinese hierarchy was all about I think.

So please repeat this everywhere you see the Chinese Gigafactory discussed: it's on mainland China, with a full political buy-in and support from the Chinese political hierarchy all the way from Shanghai to Beijing, which a BFD!

What I was refereing to was what the reporter said near the end. He said "new cars from tesla still need to pay the 25% tariff. Because it is solely owned by a foreign entity."

Someone somewhere have mixed up how it really works. So who do we believe?

 

[Hogfighter]

The more I think about it, the more I think big institutions are gonna start buying in bulk. Elon talked to some really big players, and came away pleased with their assurances. If they wanted a piece of the action at 420, why not grab more at 320?

It’s important to understand that 99% of the FUDsters are small fry’s. Only about 13% of the stock is owned by private individuals. The real money is held by the big institutions.

 

[beachbum77]

By being advisors to Tesla, Elon got Goldman Sachs and Morgan Stanley to indirectly admit Tesla is worth $420 privately.

No facts to support your conclusion. He could have tweeted $1,000. That would not have stopped them signing on for their fees. Actual investigation would have probably forced them to come up with a different number.

 

[beachbum77]

The more I think about it, the more I think big institutions are gonna start buying in bulk. Elon talked to some really big players, and came away pleased with their assurances. If they wanted a piece of the action at 420, why not grab more at 320?

It’s important to understand that 99% of the FUDsters are small fry’s. Only about 13% of the stock is owned by private individuals. The real money is held by the big institutions.

Let's back up to before the tweet. What is different now that would suddenly have them "buying in bulk"? Fidelity and T Rowe Price each sold over 20% of their shares in Q2. What do you see that has changed since August 1?

 

[davecolene0606]

Normally the hackers disable/block the Tesla control/VPN since it provides no value. That prevents Tesla from being able to adjust things remotely. (It is not like Tesla provides salvage cars any value for the VPN, no updates, no app support, etc. so you don't lose anything by blocking Tesla's access.)

I get that but com has to happen for the SC to initiate. Ie transfer of vehicle id to authenticate as to whether it’s free or how much to charge.

Fire Away!

 

[winfield100]

@

Let's back up to before the tweet. What is different now that would suddenly have them "buying in bulk"? Fidelity and T Rowe Price each sold over 20% of their shares in Q2. What do you see that has changed since August 1?

@beachbum77
Donn, are you doing "stealth" research for another Seeking Alpha article?
Will you attribute correctly things?
If so. here's mine, since others have called it "creepy"
<<<-------------

 

[Hogfighter]

Let's back up to before the tweet. What is different now that would suddenly have them "buying in bulk"? Fidelity and T Rowe Price each sold over 20% of their shares in Q2. What do you see that has changed since August 1?

Remember the old adage: Investors sell for all kinds of reasons, but only buy for one. Perhaps they pared for macro reasons, perhaps they didn’t have a warm-n-fuzzy about the ramp.

And tons has happened since August 1st! Great outlook from the ER, and the stock rocketed up to 350. Then craziness ensued brought on by uncertainty, which always makes the big boys skittish, which is why we fell.

So yea, lots has happened.

 

[beachbum77]

@

@beachbum77
Donn, are you doing "stealth" research for another Seeking Alpha article?
Will you attribute correctly things?
If so. here's mine, since others have called it "creepy"
<<<-------------

Been too busy on vacation to write. Had hard enough time keeping up on news and posting here. I'm honestly curious what anyone thinks has changed. As you know from reading my work I am a bottom line numbers guy. Other than Bloomberg guessing on production of 6k, what has changed since the CC? Musk was promising a profitable Q3 and Q4 for months now. So repeating it again on the CC was nothing new.

What are you pointing to with the arrow? I am riding back to Florida and on my Ipad. Is there something I can;t see?