TSLA Market Action: 2018 Investor Roundtable

[anticitizen13.7]

General sentiment on other web communities like Arstechnica and Reddit is still shaky. At the retail investor level, I believe that the vast majority of players are sitting on the sidelines, while Bulls and Bears are digging in on their positions.

My expectation is that TSLA continues to trade sideways within a range, until production can be sustained at a cash flow positive rate.

 

[ValueAnalyst]

Poll: Model 3 Performance Gross Margin

 

[BozieBeMe2]

I agree. They’ll spin it as a one time deal like the pie quarter, or say it was only breakeven because of ZEV or this or that. It’ll be harder to spin that for Q4 when GM rise and cars/wk have risen etc...

What might allow them to spin after that is the reveal of Model Y (did Elon say Marchish?) and then the shorts will claim Tesla can’t remain profitable while spending for Y or pickup or Semi - and definitely not if Tesla decides to do two new vehicles in parallel that Elon has already expressed wanting to do. And then the building of GigaChina, maybe GigaEuro is announced.

So.... I think the short narrative gets to live on despite Tesla becoming a cash cow Q418

Moooo, and a Mighty Moo!

 

[jw934]

I also believe, that stock price won’t jump more than 10% immediately in the next trading day even after positive gaap eps, so I have time to increase my position. Of course I have to be ready to buy in the next trading day.

As others on this board have mentioned before Q2 ER, the after-hour SP for TSLA seems to react quite slow to the earning report. So on Aug 1 I waited for 4PM then clicked on the Tesla Investor web site once a second until the report appeared at around 4:02 or 4:03. The key bullets at top clearly indicated all's good. Even after scanning the entire report for confirmation, the stock price only rose $5 above the 8/1 close at pretty good volume. If I remember correctly, it took a full until 4:30 to steadily climb to the level of the opening price of 8/2. Someone may have the historic afterhour/premarket chart to share. My point is that I agree it is a safer bet to wait for the ER, but you don't need to wait for the next trading day if the report meets your expectation.

 

[Dan Detweiler]

Here is a thought experiment I seem to be doing a lot lately:

Has Tesla grown enough to be successful without EM. Has he been able to get the production and design to a point that it is in large part "easy enough" to replicate?

Since EM is the face of Tesla him leaving would signal to many that Tesla is falling apart. But would it?
Certainly before M3 I think it would. But now we have or are right at the juncture of a company that is profitable and if the work that went into making it profitable can be replicated then maybe Tesla can survive many things that would have killed it before.

I don't think EM will leave at any time soon( And I certainly hope he does not) but at some point he will.
I think Tesla is like a huge engine that took a lot to get started...but is very close to being able to run....and run over most competition ..by itself.

This is going to sound like a joke but I am totally serious. I think Elon leaves Tesla when he steps on a BFR heading for Mars. If SpaceX makes it happen in the next 10 years, I think he's out of here...quite literally.

Dan

 

[Tslynk67]

I guess that Stock wull stay between 270-320.... Boring. Also Q3 will just be ok.

How do you define "just be ok"? Small loss? Break-even? Small Profit?

From what I remember, Elon said 5k high-spec M" per week would lead to profit, he's also sent some not-so-cryptic tweets implying they're already profitable.

From a "cash-burn" of $750m per month to profits strikes me as a rather positive scenario, and it will only be better in Q4.

Here is a thought experiment I seem to be doing a lot lately:

Has Tesla grown enough to be successful without EM. Has he been able to get the production and design to a point that it is in large part "easy enough" to replicate?

Since EM is the face of Tesla him leaving would signal to many that Tesla is falling apart. But would it?
Certainly before M3 I think it would. But now we have or are right at the juncture of a company that is profitable and if the work that went into making it profitable can be replicated then maybe Tesla can survive many things that would have killed it before.

I don't think EM will leave at any time soon( And I certainly hope he does not) but at some point he will.
I think Tesla is like a huge engine that took a lot to get started...but is very close to being able to run....and run over most competition ..by itself.

I've thought about this often. I wonder about Elon's general health, what with all the stress he's under, plus I'm not sure he eats well, he's looking a bit chubby recently. Plus all the air-travel. Plus all the vested-interests against Tesla. it's a worry.

However, although I also agree that Elon in many ways IS Tesla, we have to remember that JBS is the battery guy and Franz is designing the cars. Plus loads of people working in the shadows we're not aware of.

So I think if Elon was suddenly gone then there's be a massive dump of the stock, but Tesla would continue quite well.

Where they need to be careful is that they don't go down the Apple path and stop innovating completely, which has basically been the case since SJ died.

Apple ecosystem across all their products work well. It’s the total package of Apple that consumers buy into, thus you don’t just buy the iPhone, you buy everything else, including the music service and storage service (and anything on iTunes). In addition, developers make more money with Apple App Store across all their products. It’s something like 90% of all Apple product users download new iOS updates, meaning most are running the latest software as soon as it is available. Where the Android is less then half that, and there is a majority running multiple older versions of their operating system.

Again, it’s the ecosystem keeps them very attractive to consumers. They introduce a new product, consumers have an expectation it will fit seemlessly into the ecosystem they know.

Totally true - started with that iPod, then the G5 iMac, then a Mac Pro, then a few first-get iPhones. Now in my family: 7 Macs, 5 iPhones, 5 Apple Watches and Apple TV - the beauty is that the more you have the better it works together. As a family thing it's amazingly good.

 

[Johan]

I'm wondering if they'll be able to manage the cognitive dissonance to insist "demand is drying up" in the middle of Tesla starting its Europe / APAC launch, with US LR+PUP demand having taken half a year to mostly satiate.

I'm sure some will give that argument a try nonetheless

Obviously the "imminent competition hypothesis" will be in full force. It's still a leading theory on Seeking Alpha, for example that the 18,6k-produced-per-year Hyundai Kona is going to kill the Model 3

The concept of imminent demand constraint is always going to be a short thesis cornerstone, much in the same way as the soon-to-come-better-cheaper-more reliable-established brand-EV is has been another short seller bread and butter argument since the dawn of time as far as Tesla is concerned. The "tricky" thing with those arguments are that with regard to that-which-has-not-yet-come-to-pass (often abbreveated "the future") it's logically possible to disprove these arguments outright. What one can do though is look into the retroscope and see that those arguments turned out to be untrue in 2011-2017.

I fully sympathize with @nerodens post earlier, the gist of it being: invest in what you understand. It will allow you to get in early and it will allow you to get out early.

 

[Scott7]

Where they need to be careful is that they don't go down the Apple path and stop innovating completely, which has basically been the case since SJ died

AirPods alone prove this false. I’m using mine right now and after a year I still consider them the best Apple product since iPad. It may not be obvious unless you try them yourself.

 

[tivoboy]

Elon was quite clear that those who have bought EAP+FSD will get it for free only.
View attachment 330862

And yet, even that doesn't fully answer the question I raised above.

I won't muddy up the market action thread any further with the question. I'm sure there is another thread about it.
thanks

 

[tivoboy]

Duh... I meant do you think it's a planned attack/algorithm or something along those lines? I don't see it in earlier time periods. Just seems strange to me...

Well, when there is more uncertainty that direct optimism coupled with low volume, that can and will often lead to exactly this pattern. Taken advantage of mostly by large position holders who want to trade around it and algorithms that are fed the same fundamentals and do the same.

 

[Tslynk67]

AirPods alone prove this false. I’m using mine right now and after a year I still consider them the best Apple product since iPad. It may not be obvious unless you try them yourself.

Forgot to mention that I have a pair of AirPods, as does my wife, and we love them.

But a pair of blue-tooth earphones is not what I call innovative.

iPhone, iPad, Apple Watch, yes, very much - iPhone literally changed the world IMO, but they were all from Jobs, since then, zippo.

Don't get me wrong, I think Macs - we am have MacBook Pros in my family - are the best you can buy. I'm using my late 2013 as I type this, it's as good a new - cost a bundle new, but still was faster than my brand-new W10 laptop that work have me, never mind the design.

But it's all incremental stuff too.

In the software space they've done better. FaceTime is brilliant - videoconferencing was around for years, but crap, Apple took it and made it work, they can be really great at that.

 

[mongo]

And yet, even that doesn't fully answer the question I raised above.

Well, there was a point where someone said "free upgrade" but no detail about what that required. Was is EAP or EAP and FSD (already paid for) or EAP plus FSD (not paid at purchase but paid for after the fact). Or if one has EAP and now buys FSD, they will put in the new hardware for free as well. That's what I'm referring to hasn't been confirmed.

I won't muddy up the market action thread any further with the question. I'm sure there is another thread about it.
thanks

3 day weekend, so I'll assume no one is really expecting market action.

Previously Tesla/Elon stated: if HW upgrades were required for AP, they would be free.
The quoted tweet states EAP does not need upgraded HW, so there is no HW 3 upgrade related to EAP.
FSD will require the upgrade, anyone who pays for FSD (at time of purchase or after) will get the HW upgrade if they are on 2.x HW.
Once HW 3 is ready, all new cars will come with it by default.

 

[AlMc]

Of topic (to a certain extent) weekend: I totally got Apple and their ecosystem and Amazon.....I totally missed/misunderstood Netflix....I believe we are all agreeing that the best way to invest is in what you 'get'.

 

[Tslynk67]

Of topic (to a certain extent) weekend: I totally got Apple and their ecosystem and Amazon.....I totally missed/misunderstood Netflix....I believe we are all agreeing that the best way to invest is in what you 'get'.

So back to what I said this morning

I remember being first sent a URL for the initial "reveal" of the Model X - I think it was back in 2012. I thought it was interesting, but a pipe-dream.

Then, by pure chance, in June 2013, I happened across the Tesla store in Brussels. It must have recently opened, because I'd never seen it before. They had a white US-spec Model S there. I was totally enraptured by the look of the car - somewhere between a Maserati, Jaguar and Aston Martin. But it had 7 seats, a big trunk, a freakin' frunk! I thought to myself, "blimey, this is practical enough for my family".

Like many others here, lots of research ensued and a test-drive booked at the earliest opportunity - September.

And like everyone, regardless of how the car looks and all the other good stuff, when you actually drive it, you're on another level altogether. I was blown away. I couldn't stop thinking about it, I couldn't stop talking about it. I was hooked.

I ordered my P85 on December 13th and took delivery March 29th 2014. This car changed my whole outlook on life. And what's amazing is that now, 4.5 years later, my enthusiasm hasn't wained, if anything it's more intense.

And I'm pretty sure I'm not alone. I think a very high %age of Tesla owners go through exactly the same experience.

Who wouldn't want to own stock in such company? Who would seriously bet against it?

 

[Off Shore]

And I'm pretty sure I'm not alone. I think a very high %age of Tesla owners go through exactly the same experience.

You're not alone.

 

[shlokavica22]

And I'm pretty sure I'm not alone. I think a very high %age of Tesla owners go through exactly the same experience.

The beauty is that Tesla's appeal is not tied to particular age group/groups. It is highly desired throughout the whole spectrum of ages.
That's one of the reasons shorts gave up on trying to s*** on the products and concentrated vast amount of resources/attention to Elon personally.

 

[Causalien]

With the stock price at this level, I am actually expecting more shorts with an agenda to show up here. So far crickets.

Why is this? Did mod banned them all? Or did Eihorn getting margin called by his investors has something to do with this?

 

[Tslynk67]

With the stock price at this level, I am actually expecting more shorts with an agenda to show up here. So far crickets.

Why is this? Did mod banned them all? Or did Eihorn getting margin called by his investors has something to do with this?

They've lost, and they know it.

Every single bear/short argument has been shown to be false.

There's nothing left except FUD and lies.

And they know it.

The desperation on Twitter is palpable.

 

[NicoV]

So back to what I said this morning

I remember being first sent a URL for the initial "reveal" of the Model X - I think it was back in 2012. I thought it was interesting, but a pipe-dream.

Then, by pure chance, in June 2013, I happened across the Tesla store in Brussels. It must have recently opened, because I'd never seen it before. They had a white US-spec Model S there. I was totally enraptured by the look of the car - somewhere between a Maserati, Jaguar and Aston Martin. But it had 7 seats, a big trunk, a freakin' frunk! I thought to myself, "blimey, this is practical enough for my family".

Like many others here, lots of research ensued and a test-drive booked at the earliest opportunity - September.

And like everyone, regardless of how the car looks and all the other good stuff, when you actually drive it, you're on another level altogether. I was blown away. I couldn't stop thinking about it, I couldn't stop talking about it. I was hooked.

I ordered my P85 on December 13th and took delivery March 29th 2014. This car changed my whole outlook on life. And what's amazing is that now, 4.5 years later, my enthusiasm hasn't wained, if anything it's more intense.

And I'm pretty sure I'm not alone. I think a very high %age of Tesla owners go through exactly the same experience.

Who wouldn't want to own stock in such company? Who would seriously bet against it?

If becoming profitable doesn’t impact the stock price positively over the next 6 months, the following will:
When I did my first Tesla test drive, I was already totally convinced that my next car would be a Model S. I had read these forums, and I had a friend with an S who had taken me on a test ride. When the Tesla sales/demo guy after the test drive asked me what the other cars were that I was considering, I was surprised and answered ‘Nothing, there is nothing else’.
I have taken a lot of people in a test drive with my Model S, but for practically all of them it’s just a curiosity, as they are not in a position to buy an X or S themselves. With Model 3 it will be different, when somebody explains them the economics and TCO of a Model 3, a lot of those people will be in the same situation I was 4 years ago: totally convinced that their next car will be a Tesla.
The thing is: as of now, every week there are 5K more people giving test rides or drives to their famliy, their collegues, their friends, and maybe even random strangers. These are really big numbers: not only the production of Model 3 goes up exponentially, the Tesla sales force (the Tesla owners) also expands expands exponentially!

 

[dondy]

Note that Ford and all the auto industry vendors do publish what you're talking about and conduct their business with forward-looking statements of product plans (at present reaching beyond 2020) as well as communicating major news ahead of action and Ford is a good comparison to use when examining how Tesla communicates with customers and investors.

Tesla does exactly the same.

I don't think any of the auto makers discuss franchise pricing, but they do publish factory pricing and incentives and those promotions which invariably occur seasonally, aligned with arbitrary events, e.g. Labor Day, and in the product cycle, and in annual model transition -- Tesla has tried to avoid conforming to these industry norms -- I have no strong opinion either way, as an owner since early 2016 and a stock holder -- but Tesla is going to continue to experience the brunt of an oil industry and an auto industry which is actively working against the inevitable EV revolution.

You won't find any company which publishes current production levels, no company would voluntary publish information about current bottlenecks or even info about current product stock. There are regions in USA which have surplus and discounts of Bolts and Leaf, there are regions with waiting list. It happens because of California's laws any Bolt sold there will provide much more actual "profit" to GM than elsewhere. see ZEV policy for details.
Be my guest and find any official explanation of current supply discrepancy....

I agree complaints about Musk have a one-eyed criticism of his every misstep as if holding him to a higher standard. I had previously thought it was of no concern to him, but the last year or so, bring the Model 3 to market, appear to have taken its toll.
I'll add my voice to the choir calling for Musk to quit his twitter habit.

You can break anybody if you try hard. There is no problem with his twitter. There is a problem with double standards and general idiocy which tries to become some self proclaimed "moral". According to these moralists the only acceptable reaction to bullying is silence and quitting.
Don't attack, don't bully and you will see very different Musk tweets.

As for Tesla, I expect we'll see a solid Q3 and light up a bright future. It's time for Tesla to start adopting convention auto industry manufacturing and product design elements, and I think it's inevitable that Musk will be out of the CEO role and positioned (correctly) in a technology R&D role, leaving the business and production to experts in those dreary worlds.

Laughable.
let take example of Doug Field.
I am sure he is a very good talented engineer which does and will continue with doing amazing work.

In 2016 he took over of Model 3 program.
He misjudged initial difficulties and issued overoptimistic prognoses reflected in Q1,Q2 and Q3 2017 reports. He missed issues in GF1 completely, missed required adjustment of Fremont GA3 line (famous gaps normal due to unpredictability of idealized design transfer to hard reality), when GA3 stalled thanks to misaligned robot stations Musk took over.


So let compare: DF 1.5 years: from 0 to 20% of the production capacity. Very respectful achievement which would earn him place in any company
EM 3months: from 20% to 80%, fixing quality problems in the process, adding extra line with 20% capacity production.
In another 2 months streamlining conveyor line.
Now Tesla is starting with excursions. It's all public, you just have to look, and make your own judgment.