TSLA - Tesla Motors

[rkbabang]

This is the first time I have ever shorted (long-dated puts) a company and it's been interesting the mixed emotions I have around it.

 

I love the fact that he is shooting for the stars. but I dislike the lack of credibility that he is showing.

I love that he is disrupting an industry, but I am worried he will end up on the scrap heap of history.

Each time some criticism comes out about Tesla I get a little excited because of my puts but I am also a little disappointed that they are failing.

I want them to succeed and I want to make money.

 

Strange situation to be in.

 

Actually, I think it's quite good to be in that situation.

 

Most investors in any company also have two different sources of emotions: company success and stock success. But they usually don't distinguish them (enough), since the emotions are in the same direction: company does well, stock does well, investors are excited (but about which one?). Company does not do well, stock does well - investors may still be excited and attribute that to "company is doing well" even if it isn't.

 

In your situation at least you're clear what causes what emotions: the company or the stock/puts.  8)

 

Did you see the latest Billions episode?  The character "Taylor" who shorted a space company's stock was devastated when the CEO blew up in a rocket accident even though the trade was very profitable.

 

EDIT: I was just thinking that Billions is on Sundays and I haven't watched this week's yet, so that wasn't the latest episode, but the one before.

 

[Tompety03]

We just released an analysis of Tesla's (SolarCity) Q1-18 solar market share in advance of the earnings call. Residential solar is obviously a small piece of the business now, but it will be interesting to see if they start to turn it around with the solar roofs, solar+storage installs and new channel strategy.

 

Chris

 

https://www.ohmhomenow.com/teslas-solar-business-decline-bottomed-q1-18-market-share-1/

[black-dog]

I'm loving the pre-earnings hot-takes everywhere else -- Tesla must be the most divisive stock out there.

 

I wanted to point to something Bill Maurer wrote on Seeking Alpha --

 

https://seekingalpha.com/article/4166859-tesla-elon-musk-increases-personal-leverage

 

Elon has ~14 million shares of Tesla stock pledged as collateral to personal debt, at least ~6m of which was at post-2014 valuations and ~2m in the last year.

 

At the same time, his last compensation package was closely tied to the performance of the stock price, which is already concerning.

 

I can't think of another top executive anywhere with such a clear incentive to engage in price-supporting shenanigans. Maybe Eddie Lampert, and even then he clearly didn't have the jaws close on his personal finances as he ran Sears into the ground.

 

Gives me the willies, long or short.

[Spekulatius]

>>I can't think of another top executive anywhere with such a clear incentive to engage in price-supporting shenanigans<<

 

Valeant comes to my mind. They also have a pile of debt in common.

[Liberty]

Looks like a case of your greatest strength also being your greatest weakness.

 

The same aggressive ambition that makes Musk do things that others wouldn't even touch at rates that leave others behind is the thing that probably means that he's living too close to the edge financially.

 

I wish he had a rockstar CFO that could be the Yin to his Yang, but that's probably a tall order since it's hard to have more than on chef in the kitchen when it comes to these oversized personalities.

 

Still as someone who has no capital at risk with him, I think it's great how he's catalyzing whole industries and making things move forward faster than they otherwise would have. Progress doesn't happen by itself, people have to do the hard work. I wish him the best.

[Jurgis]

I wish he had a rockstar CFO that could be the Yin to his Yang, but that's probably a tall order since it's hard to have more than on chef in the kitchen when it comes to these oversized personalities.

 

This. But really tough to achieve unless he had someone like that for a long time and had strong and close relationship with that person.

[benhacker]

Quote from: Liberty on Today at 10:04:46 AM

I wish he had a rockstar CFO that could be the Yin to his Yang, but that's probably a tall order since it's hard to have more than on chef in the kitchen when it comes to these oversized personalities.

 

This. But really tough to achieve unless he had someone like that for a long time and had strong and close relationship with that person.

 

Agree, here.  Sadly, what is happening is the opposite.  Senior finance executives have left in an oddly high number, as well as senior folks across the company.  I think this speaks to how challenging it can be sometimes to work with someone who has high capacity and strong opinions... hard in the best of times, and very hard when times are challenging.

 

Interesting company to watch!

[Spekulatius]

Quote from: Liberty on Today at 10:04:46 AM

I wish he had a rockstar CFO that could be the Yin to his Yang, but that's probably a tall order since it's hard to have more than on chef in the kitchen when it comes to these oversized personalities.

 

This. But really tough to achieve unless he had someone like that for a long time and had strong and close relationship with that person.

 

Agree, here.  Sadly, what is happening is the opposite.  Senior finance executives have left in an oddly high number, as well as senior folks across the company.  I think this speaks to how challenging it can be sometimes to work with someone who has high capacity and strong opinions... hard in the best of times, and very hard when times are challenging.

 

Interesting company to watch!

 

CFO’s and beancounter leaving is more of a yellow/red flag than the CEO’s leaving in many cases. I think of CFO as the proverbial rat that leaves the sinking ship first. This is because the can (or should be able to ) understand the financial situation better than the CEO and a bankruptcy certainly looks bad on a CFO’s resume.

[Liberty]

Q1 letter:

 

http://files.shareholder.com/downloads/ABEA-4CW8X0/6240016912x0x979026/44C49236-1FC2-4FD9-80B1-495ED74E4194/TSLA_Update_Letter_2018-1Q.pdf

[Spekulatius]

Q1 letter:

 

http://files.shareholder.com/downloads/ABEA-4CW8X0/6240016912x0x979026/44C49236-1FC2-4FD9-80B1-495ED74E4194/TSLA_Update_Letter_2018-1Q.pdf

 

Everything is backloaded as usual.

[Gamecock-YT]

this conference call was nuts

[no_free_lunch]

He could have handled that better.

 

Still, they are talking 5k a week in just 2 months.  Maybe we hit 10k per week by end of year or early next year?  At that point if they can get the margins then the stock is still alive.  However, I find it hard to see much upside beyond speculation.

 

From the letter:

 

Automation is only half the story.  Higher levels of automation have been enabled by a dramatic simplification of product design. Our Model 3 general assembly line consists of fewer than 50 steps, which is about 70% less than conventional assembly lines.  All Model 3 vehicles use only one standard body frame, down from more than 80 for Model S, a wiring harness that has 50% less mass than average vehicles, and a fraction of the number of controllers, connectors and CPUs.  All these elements are rooted in design and critical not only to our ability to reach higher levels of output in a smaller amount of factory space but also to achieve lower levels of cost.

 

Would anyone know if this is true?

[Spekulatius]

He could have handled that better.

 

Still, they are talking 5k a week in just 2 months.  Maybe we hit 10k per week by end of year or early next year?  At that point if they can get the margins then the stock is still alive.  However, I find it hard to see much upside beyond speculation.

 

From the letter:

 

Automation is only half the story.  Higher levels of automation have been enabled by a dramatic simplification of product design. Our Model 3 general assembly line consists of fewer than 50 steps, which is about 70% less than conventional assembly lines.  All Model 3 vehicles use only one standard body frame, down from more than 80 for Model S, a wiring harness that has 50% less mass than average vehicles, and a fraction of the number of controllers, connectors and CPUs.  All these elements are rooted in design and critical not only to our ability to reach higher levels of output in a smaller amount of factory space but also to achieve lower levels of cost.

 

Would anyone know if this is true?

 

I don’t know. If everything is so much simpler compared to ICE cars, why do they have so much trouble building them? I think the Tesla folks have a different way to count things than the rest of the industry.

[Voodooking]

Still only half way through listening to the conference call, but I thought it was funny when he totally shut Adam Jonas down, so much so that I laughed out loud.  :D

[nickenumbers]

That call was bananas- B A N A N A S!

 

He is under extreme pressure, and he has probably been crumbling privately for a very long time, but now he is crumbling outwardly.  Combative in an international phone call with the analysts?!  That is foolhardy.  And their questions are repetitive and slow, but they are legitimate questions.  If he doesn't want to answer them, that is on him, but it is not helping him with transparency and investor confidence.  His colleagues on the call were actually more clear an interesting that Elon. 

 

He is trying to do something that is very hard, very complex with very large capital requirements, in hopes of profits off in the future.  And, he is showing signs of unraveling..  Tesla has lots and lots of challenges yet to encounter and overcome.  It is a marathon, not a sprint.  Yikes..

 

I fold my wallet closed, put it into my jacket and run for the EXIT!

[sculpin]

Message 143743...this person puts it well...

 

https://www.investorvillage.com/groups.asp?UseArchive=&v=1&category=A&dValue=&rValue=&nmValue=&pmValue=&nhValue=&MLPage=2&PrevNext=0&NewCount=&pt=m&mb=19168&SearchFor=&Subject=&DatePostedMin=&DatePostedMax=&RecommendedBy=&AuthoredBy=&MinRecs=0&FilterType=

 

Why is the visionary Elon now acting like a jerk?  Reality has set in,  simple, Elon is human after all.

Elon has been put up on a pedestal for so long,  never asked the tough questions , given the benefit of doubt time and time again,  he is used to the kid glove treatment.  Investors and analysts have let him lie about forecasts and production, financial targets for so long he is used to it.  Elon the folk hero, give him space, he is doing the world a favour has been the mantra. Defend Elon he is our hero,  a hero to tech, a hero to green,  he had become a quasi religious figure to many.

 

Now Elon is been held accountable and suddenly all those friendly analysts are the enemy,  it is their fault.  Execs are fleeing in droves,  the company is hemorrhaging money,  Tesla is lousy at manufacturing, has no scale , most importantly the quality of their builds are awful.  They had to rent another facility to do rework on the Model 3 because vehicles produced on the assembly line were so bad they could not be delivered to customers, thousands of them. Forbes in a recent article said  "Tesla is the worst car manufacturer in the developed world. Bar none".

 

  Elon spins it in the press and has for years but now  big cracks are showing,  tough questions are being asked.  If it weren't for the California gov't and Fed subsidies Elon and Tesla would have been history long ago.  There are now lawsuits regarding Solar City,  regulators questioning his ethics and material statements  that are contradicted by his actions.  The NTSB suspects his Autopilot software has  problems ,  a couple of investigations on the go.  Elon and gang try to smooth it all over in the press issuing statements that are speculative at best,  so they toss Tesla off the investigation. The cash burn continues, production is no where near where Elon predicted it to be,  he is years behind the original schedule.  Elon is surrounded by wolves.

 

The dream is fading, Elon will eventually take  his place beside  Henrik Fisker, John DeLorean , Malcom Bricklin and the multitude of historical failures littering automotive history.  Elon's reaction to all of this is well completely normal,  the visionary has come back to earth, he is human,  there are few if any rabbits left in the hat.

[CorpRaider]

It will be ok brothers and sisters!  We must prepare the Telsa Tithe: http://thecorpraider.com/2018/05/03/the-telsa-tithe/

 

;D  I'm kind of only half-joking.  I can think of a lot worse places to "donate" money.

[DTEJD1997]

Hey all:

 

Elon Musk still has that magic in him.

 

TSLA is only down $23/share this AM.  Down only 7%.

 

I just simply don't understand how this stock time & again defies gravity.

 

After the latest quarterly report & conference call melt down, I would think people would be RUNNING for the exits.

 

TSLA is a speculation at this point.  It used to be the speculation was how much money TSLA would eventually make.  Now the speculation is how long TSLA can stay out of bankruptcy...

[rkbabang]

That call was bananas- B A N A N A S!

 

He is under extreme pressure, and he has probably been crumbling privately for a very long time, but now he is crumbling outwardly.  Combative in an international phone call with the analysts?!  That is foolhardy.  And their questions are repetitive and slow, but they are legitimate questions.  If he doesn't want to answer them, that is on him, but it is not helping him with transparency and investor confidence.  His colleagues on the call were actually more clear an interesting that Elon. 

 

He is trying to do something that is very hard, very complex with very large capital requirements, in hopes of profits off in the future.  And, he is showing signs of unraveling..  Tesla has lots and lots of challenges yet to encounter and overcome.  It is a marathon, not a sprint.  Yikes..

 

I fold my wallet closed, put it into my jacket and run for the EXIT!

 

I still hope he can pull this all off somehow, but I just sold 75 of my 100 shares. I got more than my total cost basis back so I've made a little profit and I'll keep those 25 "free" shares to support Musk, but I'll admit it doesn't look too good at this point.

 

[black-dog]

@rkbabang: Can I ask as someone who still holds the stock -- what would have to be true for you to sell it at this point? Are there metrics you're monitoring, or milestones? Or are as fully "free" shares, is it something else outside that kind of concrete metric?

 

[rkbabang]

@rkbabang: Can I ask as someone who still holds the stock -- what would have to be true for you to sell it at this point? Are there metrics you're monitoring, or milestones? Or are as fully "free" shares, is it something else outside that kind of concrete metric?

 

I originally bought these shares not as an investment, but to support Musk and Tesla.  I still think of the remaining shares that way.  I only sold some because it isn't looking so good and I didn't want to lose money if it all turns south.  This way I get out with a profit and I can still hold some.  If the situation gets worse and it looks like bankruptcy is inevitable I'll probably sell the rest for whatever I can get for them.  It is not really a rational position, I know I should probably sell everything now.

 

[vikx01]

The next "Tesla Goes Bankrupt" tweet from Musk won't be on April 1 apparently.

[rb]

Here's a question. Why does Tesla need 10k units per week to make their margins? 5k units would be 250,000 units per year. That's about the output of a serious auto manufacturing plant. So why can the other manufacturers make their margins at 5k but Tesla need 10k, especially since model 3 is a (much?) simpler build compared to ICE autos?

[CorpRaider]

@rkbabang: Can I ask as someone who still holds the stock -- what would have to be true for you to sell it at this point? Are there metrics you're monitoring, or milestones? Or are as fully "free" shares, is it something else outside that kind of concrete metric?

 

I originally bought these shares not as an investment, but to support Musk and Tesla.  I still think of the remaining shares that way.  I only sold some because it isn't looking so good and I didn't want to lose money if it all turns south.  This way I get out with a profit and I can still hold some.  If the situation gets worse and it looks like bankruptcy is inevitable I'll probably sell the rest for whatever I can get for them.  It is not really a rational position, I know I should probably sell everything now.

 

Yes it is brother.  The Tesla tithe.  Let us come together in fellowship to find....the fulcrum security.  ;D

 

I actually didn't think the call was THAT bad.  I was trying to remember similar ones.  It seems like I've heard some others that were similar but I'm failing to recall names.  Also, Sagginokia was trying to work in question 3.

 

They really shouldn't be doing quarterly calls or if they are he should let his CFO (maybe with JB) handle, but it seems like he can't let anyone else communicate.  I remember that SolarCity call to announce the deal and Rive couldn't get a word in edgewise.

 

[Spekulatius]

I felt the CC is terrible. Elon was totally unprepared  and didn’t even seem to have the math correctly in terms of tact time. Then this rambling about expensive robot technicians and a manufacturing line being basically a software problem... Elon seemed aloft and disheveled. This hole thing runs on a wing and a prayer.