TSLA - Tesla Motors

[jschembs]

Completely normal for a 140b market cap company:

 

Tesla determined not to renew its directors and officers liability insurance policy for the 2019-2020 year due to disproportionately high premiums quoted by insurance companies. Instead, Elon Musk agreed with Tesla to personally provide coverage substantially equivalent to such a policy for a one-year period, and the other members of the Board are third-party beneficiaries thereof. The Board concluded that because such arrangement is governed by a binding agreement with Tesla as to which Mr. Musk does not have unilateral discretion to perform, and is intended to replace an ordinary course insurance policy, it would not impair the independent judgment of the other members of the Board.

 

I like he is showing his large middle finger to obscene D&O insurance providers. Showing some more skin in the game here. Lol.

 

The D&O policy might not be so obscene if this board hasn't shown itself to be Musk's puppet, in particular signing off on the SolarCity acquisition.

[coc]

So if TSLA goes belly up, where does the money come from if shareholders sue the board? SpaceX?

[fareastwarriors]

Here’s how Tesla and SpaceX worked with and paid each other in the past year

 

https://www.cnbc.com/2020/04/28/heres-how-tesla-and-spacex-worked-with-and-paid-each-other-in-the-past-year.html

 

On Tuesday, Tesla revealed in a new SEC filing, how Elon Musk’s electric car company works with his other business, re-usable rocket makers, SpaceX.

 

Related party transactions included the purchase of $600,000 of Tesla car parts by SpaceX in the first quarter of 2020 alone.

 

Elon Musk started SpaceX before he became a board member and eventually, CEO of Tesla.

[Dalal.Holdings]

All this sounds terrible! Woe is the TSLA shareholder who has been robbed by this corrupt CEO and board!

 

If only if they had real professional board members and CEO's--like the ones at F and GM or maybe GE under Immelt or Rometty at IBM. Or maybe even Boeing.

 

Clearly the best way to have spent capital from 2010 to 2020 was buybacks, not in developing multiple new EVs, production lines, factories in Shanghai, etc. Buybacks are the best way to deploy shareholder capital! Buybacks do shareholders no wrong!

 

What a shame for anyone who bought TSLA instead of F, GM, GE, IBM, or BA.

 

Clearly unconventional CEOs who shoot from the hip are not made to make great companies. Like that nut Steve Jobs, Musk should be stripped of his role as CEO because his actions have oh so deeply hurt Tesla shareholders and he says crazy things on Twitter.

 

A more conventional CEO like Jeff Immelt could have propelled TSLA well beyond its puny $140B market cap today.

[A Dhandho Investor]

All this sounds terrible! Woe is the TSLA shareholder who has been robbed by this corrupt CEO and board!

 

If only if they had real professional board members and CEO's--like the ones at F and GM or maybe GE under Immelt or Rometty at IBM. Or maybe even Boeing.

 

Clearly the best way to have spent capital from 2010 to 2020 was buybacks, not in developing multiple new EVs, production lines, factories in Shanghai, etc. Buybacks are the best way to deploy shareholder capital! Buybacks do shareholders no wrong!

 

What a shame for anyone who bought TSLA instead of F, GM, GE, IBM, or BA.

 

Clearly unconventional CEOs who shoot from the hip are not made to make great companies. Like that nut Steve Jobs, Musk should be stripped of his role as CEO because his actions have oh so deeply hurt Tesla shareholders and he says crazy things on Twitter.

 

A more conventional CEO like Jeff Immelt could have propelled TSLA well beyond its puny $140B market cap today.

 

No Dalal, stock price bro is not the answer to every issue brought up with regards to Tesla.

 

To what extent do you think that insurers look at the stock price evolution to decide on whether or not to provide D&O insurance to a company's director's?

 

Why do you think Tesla's directors settled for $60m in the solarcity lawsuit if they were 100% sure that they complied with their fiduciary duties? https://www.reuters.com/article/us-tesla-solarcity-lawsuit/tesla-directors-settle-isolating-musk-as-solarcity-trial-looms-idUSKBN1ZT2HF

 

In the long term bad corporate governance leads to bad shareholder returns, I hope we can agree on that.

 

 

[thowed]

All this sounds terrible!

 

I think one has to separate two things out here.

 

Agreed that it's sometimes appropriate to 'think outside the box' a la Jobs etc.  It's particularly suitable with some of the Accounting rule nonsense that occurs in the US.

 

However if you're going to play that game, it's arguably even more important that as a board you show yourselves to have an impeccable fiduciary duty.  And that doesn't seem to be the case here.

 

I think Tesla has done and is doing some incredible things for the world, but I wouldn't buy the stock as I don't trust them to run it as a proper business for shareholders.  That doesn't mean that the share price won't keep shooting up, but there's a greater chance that they could cock it up for shareholders.

 

As usual Munger sums it up best, "Elon Musk is peculiar and he may overestimate himself, but he may not be wrong all the time."

 

 

(I don't know why I'm trying to say something sensible on a Tesla thread...!)

 

 

[Dalal.Holdings]

All this sounds terrible!

 

I think one has to separate two things out here.

 

Agreed that it's sometimes appropriate to 'think outside the box' a la Jobs etc.  It's particularly suitable with some of the Accounting rule nonsense that occurs in the US.

 

However if you're going to play that game, it's arguably even more important that as a board you show yourselves to have an impeccable fiduciary duty.  And that doesn't seem to be the case here.

 

I think Tesla has done and is doing some incredible things for the world, but I wouldn't buy the stock as I don't trust them to run it as a proper business for shareholders.  That doesn't mean that the share price won't keep shooting up, but there's a greater chance that they could cock it up for shareholders.

 

As usual Munger sums it up best, "Elon Musk is peculiar and he may overestimate himself, but he may not be wrong all the time."

 

 

(I don't know why I'm trying to say something sensible on a Tesla thread...!)

 

I'm not sure what the major knocks against the board are other than SolarCity acquisition (show me a company that has not made a bad acquisition in its past) and Elon's tweets.

 

Fact is that this CEO and board members (i.e. Larry Ellison) have significant stake ('skin in the game') in the shares that was purchased with their own funds. This is unlike most boards where they get shares as comp and cash salary and that's it.

 

If America were just a bunch of corporations with buttoned up boards and MBA type CEOs, we would not do well. You need eccentric CEOs who say and do outlandish things to make the big plays.

 

The boring CEO/boards who just sit there, earn their stock comp (which comprises pretty much their entire stake in the co), and check all the boxes tend to decay into irrelevance and often take stock comp and dump it (while buying back stock using company cash of course). You do not want an economy full of BA, F, GM, IBM, GE, etc.

[A Dhandho Investor]

I'm not sure what the major knocks against the board are other than SolarCity acquisition (show me a company that has not made a bad acquisition in its past) and Elon's tweets.

 

I think you definitely haven't read this report I posted earlier: https://www.plainsite.org/realitycheck/tsla.pdf

 

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

 

Fact is that this CEO and board members (i.e. Larry Ellison) have significant stake ('skin in the game') in the shares that was purchased with their own funds. This is unlike most boards where they get shares as comp and cash salary and that's it.

 

Besides Elon, Ellison and Antonia Gracias, who else from the 8 other Directors can you name that does not just sit on the Board collecting his or her compensation without doing much of work?

[Liberty]

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

What's the average number of lawsuits against a $100bn+ company that makes highly regulated products sold to thousands of consumers around the world? How many lawsuits against GM or Ford? I don't know, but I'm guessing more than a few.

 

And 2003? Five guys in a garage? Yeah, I'd guess that a company selling thousands of cars, with a complex industrial and software supply chain spread around the world, would have more lawsuits than they did.

 

No opinion generally on the board or whatever, but that line was funny and lacks context.

[Dalal.Holdings]

 

I think you definitely haven't read this report I posted earlier: https://www.plainsite.org/realitycheck/tsla.pdf

 

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

I don't waste hours of my time reading 100+ page reports by clearly biased authors for short plays that result in huge losses--doesn't sound like a good return on investment--but that's just me.

[Dalal.Holdings]

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

What's the average number of lawsuits against a $100bn+ company that makes highly regulated products sold to thousands of consumers around the world? How many lawsuits against GM or Ford? I don't know, but I'm guessing more than a few.

 

And 2003? Five guys in a garage? Yeah, I'd guess that a company selling thousands of cars would have more lawsuits than they did.

 

No opinion generally on the board or whatever, but that line was funny and lacks context.

 

We see what happens when someone has 1) inability to sift signal from noise and 2) spends way too much time on a single name.

[A Dhandho Investor]

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

What's the average number of lawsuits against a $100bn+ company that makes highly regulated products sold to thousands of consumers around the world? How many lawsuits against GM or Ford? I don't know, but I'm guessing more than a few.

 

And 2003? Five guys in a garage? Yeah, I'd guess that a company selling thousands of cars would have more lawsuits than they did.

 

No opinion generally on the board or whatever, but that line was funny and lacks context.

 

This must be the interwebs. It's clearly not just about the number of lawsuits. There's a whole section on "Unrecognized risks", the company culture and accounting fraud next to the reference to the lawsuits.

 

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

What's the average number of lawsuits against a $100bn+ company that makes highly regulated products sold to thousands of consumers around the world? How many lawsuits against GM or Ford? I don't know, but I'm guessing more than a few.

 

And 2003? Five guys in a garage? Yeah, I'd guess that a company selling thousands of cars would have more lawsuits than they did.

 

No opinion generally on the board or whatever, but that line was funny and lacks context.

 

We see what happens when someone has 1) inability to sift signal from noise and 2) spends way too much time on a single name.

 

The fact that you as a long investor don't have an idea on why the Board of Directors is uninsurable blows my mind, but I guess that I indeed am the one who is not able to shift signal from noise.

 

But don't forget to answer my question on who exactly on the board has skin in the game besides Elon, Larry and Antonio!

[Liberty]

See page 90 that shows the exponential ramp in lawsuits from 1 in 2003 to 282 in 2019.

 

What's the average number of lawsuits against a $100bn+ company that makes highly regulated products sold to thousands of consumers around the world? How many lawsuits against GM or Ford? I don't know, but I'm guessing more than a few.

 

And 2003? Five guys in a garage? Yeah, I'd guess that a company selling thousands of cars would have more lawsuits than they did.

 

No opinion generally on the board or whatever, but that line was funny and lacks context.

 

This must be the interwebs. It's clearly not just about the number of lawsuits. There's a whole section on "Unrecognized risks", the company culture and accounting fraud next to the reference to the lawsuits.

 

I suggest that if you want to say something, say it, and not something else, and then pretend that others are dumb for looking at what you actually wrote rather than what you were thinking of.

[Dalal.Holdings]

The fact that you as a long investor don't have an idea on why the Board of Directors is uninsurable blows my mind, but I guess that I indeed am the one who is not able to shift signal from noise.

 

But don't forget to answer my question on who exactly on the board has skin in the game besides Elon, Larry and Antonio!

 

I’ve already got my rocks off on this name many times over. I have too little in skin in the game remaining in TSLA to argue over nonsense (noise) with you.

[Gregmal]

The fact that you as a long investor don't have an idea on why the Board of Directors is uninsurable blows my mind, but I guess that I indeed am the one who is not able to shift signal from noise.

 

But don't forget to answer my question on who exactly on the board has skin in the game besides Elon, Larry and Antonio!

 

I’ve already got my rocks off on this name many times over. I have too little in skin in the game remaining in TSLA to argue over nonsense (noise) with you.

 

-I'm not responsible for that

-I dont commit to anything

-I dont owe anyone anything

-You're wrong, I was right

-it's not worth my time arguing with you

 

 

Who said it? Donald or Dalal Trump? Birds of a feather

[Dalal.Holdings]

The fact that you as a long investor don't have an idea on why the Board of Directors is uninsurable blows my mind, but I guess that I indeed am the one who is not able to shift signal from noise.

 

But don't forget to answer my question on who exactly on the board has skin in the game besides Elon, Larry and Antonio!

 

I’ve already got my rocks off on this name many times over. I have too little in skin in the game remaining in TSLA to argue over nonsense (noise) with you.

 

-I'm not responsible for that

-I dont commit to anything

-I dont owe anyone anything

-You're wrong, I was right

-it's not worth my time arguing with you

 

 

Who said it? Donald or Dalal Trump? Birds of a feather

 

Oh now I represent your hero Trump! Wow what an accomplishment! I will refrain from making derogatory comments about women and dying blue staters and leave that to you though.  ::)

 

So glad to have you follow me around like the President of my fan club on here.

[Liberty]

Tesla Q1:

 

https://ir.tesla.com/static-files/c1723af4-ffda-4881-ae12-b6f3c972b795

 

Stock up almost 8% after-hours..

[gary17]

heading towards mars :)

[Dalal.Holdings]

More Q1 profit than Ford. Interesting how these #stonks work...

[fareastwarriors]

heading towards mars :)

 

At this rate, way beyond just Mars...

[Gregmal]

https://www.cnbc.com/2020/04/29/elon-musk-slams-coronavirus-shelter-in-place-orders-as-fascist.html

 

I love Elon, but this is what you get for setting up shop in a blue state...smart guy like him should know better.

[patience_and_focus]

https://www.cnbc.com/2020/04/29/elon-musk-slams-coronavirus-shelter-in-place-orders-as-fascist.html

 

I love Elon, but this is what you get for setting up shop in a blue state...smart guy like him should know better.

 

He is smart. Because he knows that other smart guys who drive innovation and change an entire industry live in either California or now increasingly in China, not in other places.  :P

[Dalal.Holdings]

https://www.cnbc.com/2020/04/29/elon-musk-slams-coronavirus-shelter-in-place-orders-as-fascist.html

 

I love Elon, but this is what you get for setting up shop in a blue state...smart guy like him should know better.

 

He is smart. Because he knows that other smart guys who drive innovation and change an entire industry live in either California or now increasingly in China, not in other places.  :P

 

Yah. Easy for some to forget without the blue states, America would be a third world country. Well, we’d have TX, so we’d probably be more of a kleptocratic OPEC nation that crashes every time oil does...

 

Edit: that being said, I think some governors are going to overplay their hands with lockdowns.

[fareastwarriors]

https://www.cnbc.com/2020/04/29/elon-musk-slams-coronavirus-shelter-in-place-orders-as-fascist.html

 

I love Elon, but this is what you get for setting up shop in a blue state...smart guy like him should know better.

 

Next US factory will be in a red/purple state soon enough.  :)

 

As a Californian, we love Tesla cars and love/hate Elon.  ;D

[A Dhandho Investor]

More Q1 profit than Ford. Interesting how these #stonks work...

 

Glad you bring up Ford.

 

Ford Q1 press release:

 

April 29: At the end of the first quarter, Ford and Ford Credit had $35.1 billion and $28 billion in liquidity, respectively. Ford Credit remains an important source of support for customers and dealers, with a strong, inherently liquid balance sheet. The financing unit is generating liquidity as its balance sheet size declines with lower consumer demand for vehicles. As of April 24, Ford had a cash balance of $35 billion.

 

Tesla Q1 conference call:

 

Adam Jonas: "any real time update on the company liquidity at the end of April?"

 

Zachary Kirkhorn: "Yeah it's a fair question. I don't have any additional color to provide. So 8,1 billion in cash and cash equivalents at the end of Q1, we're managing it closely. As I mentioned in the opening remarks, we do have an increase in inventory of vehicles that we were unable to deliver at the end of Q1. So we're making progress delivering those through April, which is helpful for liquidity.

 

And as we've been looking at liqudity, we've been looking at this over the next 18 months, and there's ups and downs to the liquidity. Currently now, as we're not producing, we still have payables from Q1 that we're paying off. But then in a couple of months, we'll quickly be through that, and then we'll have a gap in payables since we don't have any parts coming in. So it does go up and down a little bit. But in looking at the long-term horizon, which is how we're managing it right now, we feel pretty comfortable with the liquidity position of the company."

 

So interesting how these stonks work indeed!

 

p.s. this observation is not about the actual size of the cash balance.