TSLA - Tesla Motors

[SmallCap]

I sold the last of my put options today, I traded partially in and out a few times in the last year, each trade was very profitable largely due to lucky timing and that the thesis seems to be working out. Now everyone is turning very bearish and so I am taking my profits and moving on. probably leaving a lot on the table.

[Haasje]

This has incredible momentum downwards. The mainstream paradigm is NOW shifting. As it drops the odds of Elon getting a margin call improve and that will accelerate downward pressure because 1) he'll have to sell into the downwards spiral 2) it will trigger LOTS of negative reports. I'm adding frequently to my short to keep it a large position.

 

 

[DTEJD1997]

hey all:

 

TSLA problems are picking up momentum!  The local news station in Detroit, WJR, is reporting that "TSLA is having problems, down 50% for the year, and a possible take over target".  If they mainstream, broadcast news is reporting on it, you KNOW things are bad.

[flob8b]

Was overvalued for a long time but some believers kept the stock up.

I do not see a takeover happening but given the negativity around the company I would not short the stock either.

Musk is a clown and he should have been fined billions.

[fuzzhead1506]

I take back my partial defense of Cathy @ Ark: this valuation model is ludicrous.

 

https://github.com/TashaARK/ARK-Invest-Tesla-Valuation-Model

 

She has essentially said that the company goes cash flow positive immediately and funds a growth in sales from the current 300k cars to 1.7 mill In just 5 years at an average sales price of nearly $50k and “gross margin” of 25%.  Oh... and an average mkt cap on equity raises of $70B with only $10B raised.

 

IMHO those numbers aren’t bad for a bull case, but there is a huge jump her team doesn’t seem to be accounting for between the current cash crunch and cash flow positive; if there is any chance at those growth numbers being remotely possible, a new plant with the same efficiency as Hyundai’s Ulsan Plant at a cost of ~$30B would be a necessity (unless they find a way for the machine to make the machine).

 

For the bull case: the robotaxi service (only factored into her Bull case  ::) ) adds ~$1T - yes trillion with a T - to her model and the company is going to have an enterprise value less than its Market cap at 2023.

 

This knucklehead continues to recieve capital and a CNBC soap box to spout this nonsense while value nerds like us continue to languish with the likes of GM and FCAU.

 

[DTEJD1997]

Hey all:

 

Here is something I have not really considered much until lately.

 

What happens if the economy goes down or serious contracts?  I imagine car sales will be impacted across the board, but especially so at the high end?  TSLA will get hit.

 

Also, what happens if rare earth elements out of China get scarcer/more expensive?  TSLA will be hit especially hard.

 

As time progresses, it becomes harder & harder to see how this thing is NOT a zero.

[walt373]

@HedgeyeIndstrls with an interesting data point (https://twitter.com/HedgeyeIndstrls/status/1132001657888358400)

 

In surveys, we find that 40pct of Tesla owning respondents say that stock price gains paid for “all or a meaningful part” of their Tesla vehicle.

 

@CoverDrive12 follows up (https://twitter.com/CoverDrive12/status/1132318949922824195)

 

In the automotive world, the relationship between car owner and stock owner is unique to Tesla. Last month, I speculated that it if $TSLA dropped below $200 in May, it would breach a psychological confidence level that could collapse the order rate.

 

TSLA is currently the single worst performing stock in the Nasdaq 100 YTD. Car shoppers may see the plummeting stock price and fear "bankwuptcy" is more than just an April Fool's joke. There's much more reflexivity here than people realize, imo.

[Guest cherzeca]

@HedgeyeIndstrls with an interesting data point (https://twitter.com/HedgeyeIndstrls/status/1132001657888358400)

 

In surveys, we find that 40pct of Tesla owning respondents say that stock price gains paid for “all or a meaningful part” of their Tesla vehicle.

 

@CoverDrive12 follows up (https://twitter.com/CoverDrive12/status/1132318949922824195)

 

In the automotive world, the relationship between car owner and stock owner is unique to Tesla. Last month, I speculated that it if $TSLA dropped below $200 in May, it would breach a psychological confidence level that could collapse the order rate.

 

TSLA is currently the single worst performing stock in the Nasdaq 100 YTD. Car shoppers may see the plummeting stock price and fear "bankwuptcy" is more than just an April Fool's joke. There's much more reflexivity here than people realize, imo.

 

interesting, thx for posting

[peterHK]

I take back my partial defense of Cathy @ Ark: this valuation model is ludicrous.

 

https://github.com/TashaARK/ARK-Invest-Tesla-Valuation-Model

 

She has essentially said that the company goes cash flow positive immediately and funds a growth in sales from the current 300k cars to 1.7 mill In just 5 years at an average sales price of nearly $50k and “gross margin” of 25%.  Oh... and an average mkt cap on equity raises of $70B with only $10B raised.

 

IMHO those numbers aren’t bad for a bull case, but there is a huge jump her team doesn’t seem to be accounting for between the current cash crunch and cash flow positive; if there is any chance at those growth numbers being remotely possible, a new plant with the same efficiency as Hyundai’s Ulsan Plant at a cost of ~$30B would be a necessity (unless they find a way for the machine to make the machine).

 

For the bull case: the robotaxi service (only factored into her Bull case  ::) ) adds ~$1T - yes trillion with a T - to her model and the company is going to have an enterprise value less than its Market cap at 2023.

 

This knucklehead continues to recieve capital and a CNBC soap box to spout this nonsense while value nerds like us continue to languish with the likes of GM and FCAU.

 

Did you also not notice the following:

 

If I assume they sell 0 cars for $0, it's a $46bn company because how they calculate EBITDA is they take EBIT (which would be $0) and add D&A to it. THat's not how it works folks!

 

Why is there no Balance sheet (does it balance?)

Why is there no cash flow statement?

Why is there no income statement?

Why do they assume only $19,000 (not $19 billion, 19 THOUSAND) in PP&E in 2023 (yes they did, I'm not kidding)?

Why did they hard code $31,093,764,148.19 in FCF? What is that based on?

Why did they not adjust for the $800mn in SBC that Tesla pays a year?

Why is it that if I have them raise $1 trillion at a $70 billion valuation, the cash shows up nowhere in their model, and the market cap after that is still $46 billion assuming 0 cars and 0 autonomous?

 

This model is more broken than King Bran.

 

[randomep]

I take back my partial defense of Cathy @ Ark: this valuation model is ludicrous.

 

https://github.com/TashaARK/ARK-Invest-Tesla-Valuation-Model

 

She has essentially said that the company goes cash flow positive immediately and funds a growth in sales from the current 300k cars to 1.7 mill In just 5 years at an average sales price of nearly $50k and “gross margin” of 25%.  Oh... and an average mkt cap on equity raises of $70B with only $10B raised.

 

IMHO those numbers aren’t bad for a bull case, but there is a huge jump her team doesn’t seem to be accounting for between the current cash crunch and cash flow positive; if there is any chance at those growth numbers being remotely possible, a new plant with the same efficiency as Hyundai’s Ulsan Plant at a cost of ~$30B would be a necessity (unless they find a way for the machine to make the machine).

 

For the bull case: the robotaxi service (only factored into her Bull case  ::) ) adds ~$1T - yes trillion with a T - to her model and the company is going to have an enterprise value less than its Market cap at 2023.

 

This knucklehead continues to recieve capital and a CNBC soap box to spout this nonsense while value nerds like us continue to languish with the likes of GM and FCAU.

 

Did you also not notice the following:

 

If I assume they sell 0 cars for $0, it's a $46bn company because how they calculate EBITDA is they take EBIT (which would be $0) and add D&A to it. THat's not how it works folks!

 

Why is there no Balance sheet (does it balance?)

Why is there no cash flow statement?

Why is there no income statement?

Why do they assume only $19,000 (not $19 billion, 19 THOUSAND) in PP&E in 2023 (yes they did, I'm not kidding)?

Why did they hard code $31,093,764,148.19 in FCF? What is that based on?

Why did they not adjust for the $800mn in SBC that Tesla pays a year?

Why is it that if I have them raise $1 trillion at a $70 billion valuation, the cash shows up nowhere in their model, and the market cap after that is still $46 billion assuming 0 cars and 0 autonomous?

 

This model is more broken than King Bran.

 

I went to their website they show pics of each member of their staff. My god, I think 80% of them look 30, maybe some are even in their 20s.  Before, I get labelled an age discriminator........ These kids have no memory of 2000, their glossy ads are all about the future, disruption, innovation....... with a staff that young they can definitely believe in their own cool-aid......

 

things like this are great, it means there are suckers every generation, which means a constant stream of wealth transfer...... I still have hope to be 20 millionaire!

 

 

 

[peterHK]

I take back my partial defense of Cathy @ Ark: this valuation model is ludicrous.

 

https://github.com/TashaARK/ARK-Invest-Tesla-Valuation-Model

 

She has essentially said that the company goes cash flow positive immediately and funds a growth in sales from the current 300k cars to 1.7 mill In just 5 years at an average sales price of nearly $50k and “gross margin” of 25%.  Oh... and an average mkt cap on equity raises of $70B with only $10B raised.

 

IMHO those numbers aren’t bad for a bull case, but there is a huge jump her team doesn’t seem to be accounting for between the current cash crunch and cash flow positive; if there is any chance at those growth numbers being remotely possible, a new plant with the same efficiency as Hyundai’s Ulsan Plant at a cost of ~$30B would be a necessity (unless they find a way for the machine to make the machine).

 

For the bull case: the robotaxi service (only factored into her Bull case  ::) ) adds ~$1T - yes trillion with a T - to her model and the company is going to have an enterprise value less than its Market cap at 2023.

 

This knucklehead continues to recieve capital and a CNBC soap box to spout this nonsense while value nerds like us continue to languish with the likes of GM and FCAU.

 

Did you also not notice the following:

 

If I assume they sell 0 cars for $0, it's a $46bn company because how they calculate EBITDA is they take EBIT (which would be $0) and add D&A to it. THat's not how it works folks!

 

Why is there no Balance sheet (does it balance?)

Why is there no cash flow statement?

Why is there no income statement?

Why do they assume only $19,000 (not $19 billion, 19 THOUSAND) in PP&E in 2023 (yes they did, I'm not kidding)?

Why did they hard code $31,093,764,148.19 in FCF? What is that based on?

Why did they not adjust for the $800mn in SBC that Tesla pays a year?

Why is it that if I have them raise $1 trillion at a $70 billion valuation, the cash shows up nowhere in their model, and the market cap after that is still $46 billion assuming 0 cars and 0 autonomous?

 

This model is more broken than King Bran.

 

I went to their website they show pics of each member of their staff. My god, I think 80% of them look 30, maybe some are even in their 20s.  Before, I get labelled an age discriminator........ These kids have no memory of 2000, their glossy ads are all about the future, disruption, innovation....... with a staff that young they can definitely believe in their own cool-aid......

 

things like this are great, it means there are suckers every generation, which means a constant stream of wealth transfer...... I still have hope to be 20 millionaire!

 

I'm 27.

[Haasje]

Tesla bulls do have beautiful websites

https://www.bailliegifford.com/en/usa/non-professional-investor/

[A Dhandho Investor]

New podcast with Montana Skeptic: https://www.podbean.com/media/share/pb-jz7pw-b28a6c#.XOvX4qDyXZg.twitter

 

Well worth the listen.

[Orchard]

I'm 27.

 

So you got some time to bone up on your EBITDA calcs. Not that it's important...

[meiroy]

 

I think there's very little chance Tesla is going to 0 or anything near it. Can't see it happening, with their technical knowledge and capabilities they will be supported sooner or later. I'm not saying it's cheap here or anything.

[Spekulatius]

 

I think there's very little chance Tesla is going to 0 or anything near it. Can't see it happening, with their technical knowledge and capabilities they will be supported sooner or later. I'm not saying it's cheap here or anything.

 

The technical knowledge will walk out the door before they go bankrupt. It’s pretty easy for engineers in the Bay Area to find another job.

[meiroy]

 

I think there's very little chance Tesla is going to 0 or anything near it. Can't see it happening, with their technical knowledge and capabilities they will be supported sooner or later. I'm not saying it's cheap here or anything.

 

The technical knowledge will walk out the door before they go bankrupt. It’s pretty easy for engineers in the Bay Area to find another job.

 

Could be. They also have IP as a company, team structure and Elon Musk etc.  In this environment where AI and technology will get government support, I just don't see it happening.

 

 

 

[petec]

Given the amount of ESG/save the world money out there looking for a home, I would think a highly dilutive recap is more likely than a zero.

[petec]

Tesla bulls do have beautiful websites

https://www.bailliegifford.com/en/usa/non-professional-investor/

 

In fairness, take a look at the performance of Scottish Mortgage (their main publicly listed growth fund).

[frommi]

Given the amount of ESG/save the world money out there looking for a home, I would think a highly dilutive recap is more likely than a zero.

 

They already had problems getting the last round done and that was just to get 2 billion, how do you think they get 7-10 billion that are necessary to fund capex for all the future projects?

Tesla had to buy 400 million of calls (that are probably already worth at lot less), so that the banks could delta hedge the stock exposure, no institutional money was really involved in the last round. On the other hand there are now 160.000 robinhood accounts holding the stock, but i doubt that they can raise billions from retail clients.

 

As far as i know the current ABL is based on TTM EBITDA and that will drop hard in Q3 and Q4 when the gains of 2018 roll off. And since they sell all cars now at a huge loss, even a spike in demand will not really help. They also lose the last bit of tax incentives at the start of Q3, while most of the competition still has the full amount and competition will heat up in the near future. I can`t see how they can survive until 2020 right now.

 

The bond market is pricing the company right now with a yield to maturity of >9% on all dates, i don`t think that would happen if the chance for the equity to be zero is low.

[randomep]

 

I think there's very little chance Tesla is going to 0 or anything near it. Can't see it happening, with their technical knowledge and capabilities they will be supported sooner or later. I'm not saying it's cheap here or anything.

 

The technical knowledge will walk out the door before they go bankrupt. It’s pretty easy for engineers in the Bay Area to find another job.

 

I couldn't agree more...... I work with one......

[CorpRaider]

I agree with Petec on the more likely outcome.  Bears seem almost as irrational/riddled with confirmation bias to me about this name as do the "fan persons." 

 

Tencent has pretty good websites and some passing familiarity with software eating the world.  They can probably get access to a lot more Chinese capital, off balance sheet even, if they are going to center regional production ops there. 

 

Rumors are they had "trouble" with the raise, but to me the structure screamed that the insiders and/or existing investors were overly concerned with dilution/in denial about capital needs/legitimately placing faith in their optimistic view of the immediate business prospects/better informed than outsiders.  They gave back a lot of the seemingly too conservative raise, to hedge/limit dilution.   

 

There's all this information about the pending margin call for Elon, but can't certified rich guys get commercial lines secured by their holdings with term balloons rather than margin calls?

[Ahab]

I'm struggling hard to see how the equity isn't a donut. When attempting to value the stock you have to consider the massive debt, consistent losses, constant delivery + production misses, CEO's constant missed promises , CEO's production/delivery guidance being conducted over twitter, and after SEC restrictions, through near daily leaked emails, competition coming from auto manufacturers with more experience and a better cost structure, etc. The $30+ billion dollar Tesla market cap is all due to the Musk halo effect. If it were any other company, this board and the financial media at large would be discussing the dreaded B word much more loudly. I think the divergence between the debt and the equity is very telling about what is likely to come next.

 

 

[petec]

I'm struggling hard to see how the equity isn't a donut. When attempting to value the stock you have to consider the massive debt, consistent losses, constant delivery + production misses, CEO's constant missed promises , CEO's production/delivery guidance being conducted over twitter, and after SEC restrictions, through near daily leaked emails, competition coming from auto manufacturers with more experience and a better cost structure, etc. The $30+ billion dollar Tesla market cap is all due to the Musk halo effect. If it were any other company, this board and the financial media at large would be discussing the dreaded B word much more loudly. I think the divergence between the debt and the equity is very telling about what is likely to come next.

 

And you may well be right. My point is simply that net debt is $12bn, not $120bn. In a world of unprofitable companies being valued in the billions, it's not wildly implausible to imagine that someone with deep pockets might pump $15bn into Tesla at $10 or $20 per share. That would give them control (which eliminates a lot of management the issues you raised) of an asset that has some value (brand, technology, plants) and could be at the forefront of "saving the world", which is important for some investors.

 

I have no dog in this fight. I'm just saying that shorts holding on for zero might be disappointed with the endgame. It might be wise to declare victory before zero.

[Ahab]

I agree that there might be a bid at $10 or $20 a share. But I wonder if the luster of Tesla will have worn off completely by that point. An acquirer will have to consider not just debt but also purchase obligations/warranty liabilities/legal liabilities/cost of product refreshes in their all in cost of buying Tesla.