TSLA Market Action: 2018 Investor Roundtable

[pz1975]

If pattern changes, and we continue drop, or continue consolidating for couple of months, your position would be decimated. Please think what is the worst case scenario you want to endure...
This comment is coming from my own experience. Because patterns eventually change. Any while I believe this one will resolve on the upside, a big, long headfake downwards would not be out of character for markets...

I agree. Converting LEAPS (which are already leveraged positions) to shorter-term calls is very risky.

Converting shares to LEAPS still has some risk but allows for a much longer time period for recovery in case the share price doesn’t rebound as one expects.

In the case of a recession, even LEAPS would likely be toast.

 

[bdy0627]

Or IMHO, the shorts are trying to make it look like the “insiders” are anticipating a miss, or a failed pay package, or ... etc/etc.

The shorts who know how to read the charts probably understand that manipulating it to look a certain way, can and will create their desired outcomes (until it doesn’t).

Recall short % has been greater than 60% pretty much all week.

I agree that shorts have wreaked havoc this past week. The reason they have been able to do so is that TSLA is vulnerable because investors are concerned that the model 3 production issues do not appear to be resolved yet. This bodes poorly for the Q1 ER. Smart shorts are jumping on the stock when they sense that it is vulnerable. Friday's trading showed that it is still vulnerable despite already falling 8%.

 

[mongo]

How can they have a positive GM on a 50,000 $ car when a similar 80-100,000 car have 15-25% inflated GM ?

Economies of scale, lower cost of content, steel vs aluminum construction, smaller pack, amortized factory overhead, production efficiencies.

 

[bdy0627]

If pattern changes, and we continue drop, or continue consolidating for couple of months, your position would be decimated. Please think what is the worst case scenario you want to endure...
This comment is coming from my own experience. Because patterns eventually change. Any while I believe this one will resolve on the upside, a big, long headfake downwards would not be out of character for markets...

I appreciate the reminder, and I still think about your brutal experience with that big dip in early 2016. It's certainly a possibility. Even with that rare 50%+ drop, the stock did recover in 2 months. If that near worst case scenario occurred, you would probably be ok with June calls, but it would be very painful nonetheless. I'll keep your warning in mind.

 

[Waiting4M3]

Tesla itself stated that they currently have negative GM on M 3.

You are the one inventing gross margins out of thin air and your phantasy. How can they have a positive GM on a 50,000 $ car when a similar 80-100,000 car have 15-25% inflated GM ?

Tesla has said that they expect M3 margin to be around 25% IIRC, and they've demonstrated >25% GM on MS/X. That's what I believe. If you believe differently then that's fine. We can't argue about each other's beliefs.

I do however can argue about your claim of "inflated GM". Tesla's accounting for GM is different, part of the cost is put into their operating loss, instead of cost of the car. If you want to claim that not counting those cost makes the GM "inflated", then you should also make equal adjustments to Tesla's operation income/loss. So in the end your argument doesn't make a difference.

 

[Menifeer]

Tesla has said ...

Words that follow that phrase should always be taken with a hefty helping of salt.

 

[Waiting4M3]

Words that follow that phrase should always be taken with a hefty helping of salt.

Tesla always miss their date target, but they usually hit their performance/spec target even if late by a few quarters. 25% GM IMO falls in the 2nd group. Investing in Tesla shares without time constraint is the way to go. If buying short term options, you're asking for trouble, since Tesla will be late.

OTOH the whole forum is sounding pretty salty these days, maybe been taking too much salt

 

[Leo9]

If you think at $45K ASP Tesla can't make $8K profit (17.8%), then that's the crux of disagreement between you and us longs. I don't think you've contributed any new fact here. Only thing I can see is that you're working off a different profitability assumption on the M3. And I think you're wrong. Here are some scenarios. Tesla can use M3 profit to cover their current worst quarterly loss (Q4'17) of $600M if they achieve >20% GM or 10k/wk production rate. If they achieve both, watch out!

View attachment 287372

To be fair, net loss was $770M and Tesla sold $180M worth of ZEV Credits in that quarter.
Tesla likely needs 10k/week AND >20% GM to achieve true profitability. Unfortunately I don't believe it will happen this year.

 

[Reciprocity]

I agree with most of what you say except when you have to take a personal jab at us liberal folks. Just tit for tat, maybe us liberal folks care more about just the money and we want to see a company like Tesla survive and save the world? or maybe I should assume that you conservative folks care only about money and don't care about the rest of the world?

My point was not to take a jab. But just to point out that ones point of view of when and if a recession is coming could be skewed based on how they feel the current leadership is doing or if there is a huge macro risks caused by things like impeachment. If I believed that, I would be much more inclined to anticipate a recession. Much of a recession is caused by uncertainty. It's kind of a chain reaction where uncertainty spreads like wildfire and shapes peoples actions. People and companies hunker down to ride out the storm. Some don't survive and that leads to more opportunity for those that are strong enough to survive. Tesla basically got a free factory and sightly used stamping press out of the last recession. If recession hit today, Tesla might not make it. In two years or more, they could be positioned very well.

 

[Waiting4M3]

To be fair, net loss was $770M and Tesla sold $180M worth of ZEV Credits in that quarter.
Tesla likely needs 10k/week AND >20% GM to achieve true profitability. Unfortunately I don't believe it will happen this year.

Me either. It just cracks me up when some new short comes to TMC yalling chapter 11, like they're the 1st one coming here with that "insight". I would love it if the new short really indeed bet money on Tesla going ch 11 before M3 ramps to 10k/wk, the laughs I would get may be worth more than the TSLA stocks I hold.

 

[larmor]

Me either. It just cracks me up when some new short comes to TMC yalling chapter 11, like they're the 1st one coming here with that "insight". I would love it if the new short really indeed bet money on Tesla going ch 11 before M3 ramps to 10k/wk, the laughs I would get may be worth more than the TSLA stocks I hold.

True but one has to ask if the goal of the recent poster is to just create chatter that will be picked up by algobots which will hence trade accordingly-- in the trading world, the product is the trade and difference on the trade.
Another aside, one cannot be so sure that the poster is indeed a bot themselves, or for that matter if i'm a bot as well.
Welcome to our brave new world...

 

[theschnell]

Tesla itself stated that they currently have negative GM on M 3.

You are the one inventing gross margins out of thin air and your phantasy. How can they have a positive GM on a 50,000 $ car when a similar 80-100,000 car have 15-25% inflated GM ?

This is reasoning by analogy.

It’s called “economies of scale”. Maybe do some research on how that works.

 

[Teslie]

The "new short" ist not new to this subject, is in retirement age and has an engineering and finance background. In fact I do some consultancy in investment mgt. for rich clients. I have been reading in this forum in the last 3-4 months and niw decided tonexpress my opinion.

Economies of scale do not exist when there is no scale. Tesla itself stated that they have to invest a further 3,5-4 bn this year to get to 5,000/week. This will cost additional depreciation etc.

To step up to 10,000 they have to invest heavily and when you read the announcements from Tesla in the last 6 months you can recognize clearly that they went back from the 10,000 goal and stopped investment towards a further capacity increase.

Tesla owners just resist to recognize the facts. They do not look good and I just analyse the situation without emotions and take corresponding positions which earned heavily in the last months...

 

[GoTslaGo]

I agree that shorts have wreaked havoc this past week. The reason they have been able to do so is that TSLA is vulnerable because investors are concerned that the model 3 production issues do not appear to be resolved yet. This bodes poorly for the Q1 ER. Smart shorts are jumping on the stock when they sense that it is vulnerable. Friday's trading showed that it is still vulnerable despite already falling 8%.

Yes. Also add in the Compensation vote on March 20 (IIRC). There was a lot of doom and gloom prior to the SCTY/TSLA vote in q4 2016. Once that vote passed, the SP jumped several weeks later (Tencent accumulation). We’ll see if the same affect occurs.

 

[Teslie]

"Smart shorts are jumping on the stock when they sense that it is vulnerable. "

Yes, of course, the shorts are guilty and they are bad people. How about questioning the many many lies of Elon Musk ?

 

[theschnell]

The "new short" ist not new to this subject, is in retirement age and has an engineering and finance background. In fact I do some consultancy in investment mgt. for rich clients. I have been reading in this forum in the last 3-4 months and niw decided tonexpress my opinion.

Economies of scale do not exist when there is no scale. Tesla itself stated that they have to invest a further 3,5-4 bn this year to get to 5,000/week. This will cost additional depreciation etc.

To step up to 10,000 they have to invest heavily and when you read the announcements from Tesla in the last 6 months you can recognize clearly that they went back from the 10,000 goal and stopped investment towards a further capacity increase.

Tesla owners just resist to recognize the facts. They do not look good and I just analyse the situation without emotions and take corresponding positions which earned heavily in the last months...

Where does Tesla say they have to invest $3.5 - 4 billion more to get to 5k per week? I missed that.

Also, how is going from 2,500 max S & X per week max, to 7,000 S 3 X per week not scaling up? 3X output.

I’m glad you have a finance and engineering background. That puts you in a perfect position to be an armchair quarterback about Tesla, and be wrong just like all those before you.

Hey, but perhaps you’ll get lucky and be right this time. It will be a first in the history of long-term Tesla shorts.

 

[30seconds]

The "new short" ist not new to this subject, is in retirement age and has an engineering and finance background. In fact I do some consultancy in investment mgt. for rich clients. I have been reading in this forum in the last 3-4 months and niw decided tonexpress my opinion.

Economies of scale do not exist when there is no scale. Tesla itself stated that they have to invest a further 3,5-4 bn this year to get to 5,000/week. This will cost additional depreciation etc.

To step up to 10,000 they have to invest heavily and when you read the announcements from Tesla in the last 6 months you can recognize clearly that they went back from the 10,000 goal and stopped investment towards a further capacity increase.

Tesla owners just resist to recognize the facts. They do not look good and I just analyse the situation without emotions and take corresponding positions which earned heavily in the last months...

Ok, what is your estimate for Q4 production, production mix, revenue, automotive gross margin, R&D spending and net loss?

 

[bdy0627]

"Smart shorts are jumping on the stock when they sense that it is vulnerable. "

Yes, of course, the shorts are guilty and they are bad people. How about questioning the many many lies of Elon Musk ?

Not sure why you are interpreting that way. Nothing to do with guilt or bad people. Smart longs jump back on when the stock no longer appears vulnerable. Doesn't mean they are good people.

 

[Teslie]

"Where does Tesla say they have to invest $3.5 - 4 billion more to get to 5k per week? I missed that."

Last conference call...

 

[bdy0627]

I've seen enough of the new short. I don't have the time or interest to read through all of the argumentative posts that truly add nothing.