Thoughts on TESLA

[NW-Bound]

If Tesla stock doesn't get to $359.87/sh by 12/1, high chances then that the stock plummets significantly as Tesla would then have to use cash to redeem the convertible debt that comes due in March. Since Tesla had $2.2 billion in cash at the end of June, their burn rate for the next 3 quarters and then having to come up with the $920 million for the convertible stock redemption would really put Tesla in a bind.

Yes, Tesla has that $920 million convertible bond at $359.9, coming due on Feb 2019. A bit further out is $1.38 billion convertible bond at the same price, due on Feb 2021. Stock is now at $289.

And the rumor today is that the Model 3 production falls again. Aye, aye, aye... It's interesting to watch, even though I have no money in this game.


PS. Another debt coming due even sooner this November 1st is a note inherited from SolarCity after the merger. It is also convertible, but at a stock price of $560.64. Aye, aye, aye... Obviously, investors were very optimistic in the those days.

 

[SpartacusSchmartacus]

Goldman downgrade

Tesla took one to the teeth with a crushing GS downgrade to $210 in six months! Ouch. Always thot Tesla had a hell of a product but with the big boys waking up BMW, VW, Mercedes and a Chinese company known as the "Tesla killer" entering the market it's all headwinds from here.
Suggest you take your profits and pick lower hanging fruit.
PUTS on TSLA for me when we get a little recovery high.

 

[bobandsherry]

Musk has been extremely quiet on Twitter lately, the Board must have finally set some ground rules for him. With stock dropping and the GS downgrade I'd expect him to have been visible.

 

[oneill225]

Buying Opportunity

Dig a little deeper than Goldman does in their downgrade and you will find that Tesla is still way ahead of the "Tesla Killers".

Audi and Jaguar are the only real current competitors. Each, with a single electric vehicle (SUV) this year (aside from the cheaper Nissans and Chevys). I like the Audi and Jag EV SUV's, but they are not superior to the Tesla Model X on paper (performance and price).

The Mercedes doesn't even come out until late next year; around the same time Tesla should be rolling out the new Model Y (smaller SUV based on the Model 3 platform). None of the Tesla competition is advertising superior range or price to Tesla and they are not serious players in autonomous vehicles (yet).

Regarding Model 3 production; it is currently between 4 and 5 thousand per week. Under desired production, but why would anyone assume that the trajectory is not upward with back orders stretching out several months?

Lastly, Tesla is patent rich in both the EV and autonomous realms.

Buy low, sell high.

 

[NW-Bound]

Musk has been extremely quiet on Twitter lately, the Board must have finally set some ground rules for him. With stock dropping and the GS downgrade I'd expect him to have been visible.

Just saw that Musk attacked Unsworth again, the British diver involved in the Thai cave rescue, calling him a child rapist. The latter 's lawyer said they already started a lawsuit against Musk.

He is reportedly working day and night at Tesla factory. How did he have any time to surf the Web, or calling anybody names?

 

[bobandsherry]

Just saw that Musk attacked Unsworth again, the British diver involved in the Thai cave rescue, calling him a child rapist. The latter 's lawyer said they already started a lawsuit against Musk.

He is reportedly working day and night at Tesla factory. How did he have any time to surf the Web, or calling anybody names?

I don't know. I know when I was working day and night (before FIRE) I'd barely have time to go to the bathroom and respond to email (work) let alone surf the web.

 

[ls99]

Wonder how folks fare with Tesla's out of warranty.

Hopefully they are good at fixing the car. My understanding is that not many mechanics will work on them. Can owners get full circuit diagrams for the car? Diagnostic tools are likely proprietary, and unobtanium. Spare parts, how is the supply?

 

[NW-Bound]

...Can owners get full circuit diagrams for the car? Diagnostic tools are likely proprietary, and unobtanium. Spare parts, how is the supply?

From what I have seen on the Web, Tesla owners might as well treat the cars as disposable after the warranty runs out.

Couldn't find again the article on a guy who bought a model S early, being a supporter. He turned so mad when the warranty expired, and he could not get help to fix simple things. He said he almost destroyed the car out of frustration, but in the end took it apart to troubleshoot and fix it himself.

 

[bobandsherry]

From what I have seen on the Web, Tesla owners might as well treat the cars as disposable after the warranty runs out.

Couldn't find again the article on a guy who bought a model S early, being a supporter. He turned so mad when the warranty expired, and he could not get help to fix simple things. He said he almost destroyed the car out of frustration, but in the end took it apart to troubleshoot and fix it himself.

So in 8 years, after the battery and drive unit warranty is out, we'll see a load of Tesla's in the junk yard and getting ready for recycling. Don't know if that's really good for the environment. Or maybe once critical mass is reached we'll see more mechanics who will service these.

 

[brucethebroker]

High 90's all summer for me in Florida. My gas engine car is black on black with leather, has no problem cooling down in only a minute or two. Or I can get it cooled down before I get into it by using remote start.

I went car shopping in Miami a few years ago, but was disappointed in the dealer not having the color I wanted. The vast majority of the cars on the lot were white, with a few red, green and silver vehicles mixed in-really, not much of a selection. So I asked my salesperson why so many white cars? "Well, we don't sell many black cars here in Miami, sir." It was in July. Oppps.

 

[JoeWras]

So... Yesterday Elon smokes weed and drinks whiskey while giving a podcast interview:
https://www.usatoday.com/story/money/cars/2018/09/07/elon-musk-marijuana-joe-rogan-show/1221131002/

Today, head of accounting and HR both resign:
https://www.cnbc.com/2018/09/07/tes...r-dave-morton-resigns-after-just-a-month.html

I know he is an odd duck. But man, you just have to run a company as an adult with a sober mind. Maybe he is trying to draw in the young crowd or something. Fine. Everything was legal. But do you seriously want your c-suite people talking with a drink in hand?

This is messed up. I'm not surprised some of the c-suite are resigning.

 

[jazz4cash]

I guess I don’t get the uproar over drinking whiskey on a podcast. I’ve seen similar on network tv and cable. EM was totally snookered by the podcast host. Musk is a tool but also has miserable judgement on these issues. I think the accounting chief hired on one day before the “funding secured tweet”. It’s hard to see how this could work out well. It’s a shame thinking of what TM could be but also hard to avert my eyes. OTOH it’s a chance for the true believers to buy the dip/rebound off today’s 8% drop.

 

[oneill225]

So... Yesterday Elon smokes weed and drinks whiskey while giving a podcast interview:
https://www.usatoday.com/story/money/cars/2018/09/07/elon-musk-marijuana-joe-rogan-show/1221131002/

Today, head of accounting and HR both resign:
https://www.cnbc.com/2018/09/07/tes...r-dave-morton-resigns-after-just-a-month.html

I know he is an odd duck. But man, you just have to run a company as an adult with a sober mind. Maybe he is trying to draw in the young crowd or something. Fine. Everything was legal. But do you seriously want your c-suite people talking with a drink in hand?

This is messed up. I'm not surprised some of the c-suite are resigning.

Why so worried? Do you own any Tesla stock?

I will bail when I see signs that the products are failing in the marketplace. I believe EVs are the near future and Tesla is the current standard.

 

[NW-Bound]

I have not watched Musk in any video, but found his antics getting stranger and stranger. Perhaps he is under a lot of pressure and takes medicine and it has side effects on him.

The departure of high-level management and engineers has been going on the last few years. Maybe the pressure is too great, and their stock options are all under water making staying not rewarding enough.

 

[Fedup]

So... Yesterday Elon smokes weed and drinks whiskey while giving a podcast interview:
https://www.usatoday.com/story/money/cars/2018/09/07/elon-musk-marijuana-joe-rogan-show/1221131002/

Today, head of accounting and HR both resign:
https://www.cnbc.com/2018/09/07/tes...r-dave-morton-resigns-after-just-a-month.html

I know he is an odd duck. But man, you just have to run a company as an adult with a sober mind. Maybe he is trying to draw in the young crowd or something. Fine. Everything was legal. But do you seriously want your c-suite people talking with a drink in hand?

This is messed up. I'm not surprised some of the c-suite are resigning.

This thread makes me want to pop back to ER and post.

The smoking part didn’t tank the stock but the resigning of many top executives. But it did wonder for my puts. I expect the stock to be down to $244 but I closed my puts, I’m a chicken, lol. I take my gain.

But one of my coworkers off my first job out of college, Jim Keller, a VP of engineering at TESLA, left TESLA last year. If these kind of guys(with a lot of stock options I suppose) didn’t stay, why would other investors want to buy this stock.

 

[MRG]

So... Yesterday Elon smokes weed and drinks whiskey while giving a podcast interview:
https://www.usatoday.com/story/money/cars/2018/09/07/elon-musk-marijuana-joe-rogan-show/1221131002/

Today, head of accounting and HR both resign:
https://www.cnbc.com/2018/09/07/tes...r-dave-morton-resigns-after-just-a-month.html

I know he is an odd duck. But man, you just have to run a company as an adult with a sober mind. Maybe he is trying to draw in the young crowd or something. Fine. Everything was legal. But do you seriously want your c-suite people talking with a drink in hand?

This is messed up. I'm not surprised some of the c-suite are resigning.

But he smoked the marijuanas, he didn't inject them.

 

[NW-Bound]

This thread makes me want to pop back to ER and post.

The smoking part didn’t tank the stock but the resigning of many top executives...

Hey, welcome back.

About the resigning of the chief accounting guy, perhaps he saw the company book full of red ink, shook his head and ran away scared.

 

[JoeWras]

Why so worried? Do you own any Tesla stock?

I will bail when I see signs that the products are failing in the marketplace. I believe EVs are the near future and Tesla is the current standard.

I do not own the stock. I am not worried. I do think one has to be reasonable to run a big business. But then again, the reasonable leaders also created numerous superfund sites, so what do I know?

I like traditional internal combustion engines. True. Yet I still want to see EVs succeed because it ultimately makes sense. Elon continuing down this path may muck it up instead of moving it forward. He has been moving it forward by finally waking up the "reasonable" various MegaMotor companies.

Hey, welcome back.

About the resigning of the chief accounting guy, perhaps he saw the company book full of red ink, shook his head and ran away scared.

Or he can see the options he was offered may never get above water? Or maybe what he expressed was the truth: they are operating too fast, too fast to keep a good business case?

 

[Running_Man]

This thread makes me want to pop back to ER and post.

The smoking part didn’t tank the stock but the resigning of many top executives. But it did wonder for my puts. I expect the stock to be down to $244 but I closed my puts, I’m a chicken, lol. I take my gain.

But one of my coworkers off my first job out of college, Jim Keller, a VP of engineering at TESLA, left TESLA last year. If these kind of guys(with a lot of stock options I suppose) didn’t stay, why would other investors want to buy this stock.

This is not a good look for a serious executive of a company that needs billions in order to continue

 

[oneill225]

Focus

It seems that a lot of the Tesla criticism hangs on a desire to see Musk fail. The salacious headlines create a great deal of excitement among those naysayers and that is when we see them emerge to stir the pot.

I can accept valid critiques of Tesla products, but most of the "warnings" about Musk seem to omit any such analysis.

 

[bjorn2bwild]

I wonder if this Musk stunt has been taken out of context.
I did not watch the Joe Rogan interview (will when I get the chance) but did read this article and quote -

Musk and Rogan sipped whiskey throughout their conversation. And at one point, the comedian lit up a joint, and Musk took a puff.

This was apparently a rare event; the SpaceX CEO said he almost never smokes marijuana (which is legal in California, where The Joe Rogan Experience is taped) and doesn't enjoy it, because it saps his famous productivity.
"It's like a cup of coffee in reverse," Musk said. "I like to get things done. I like to be useful."

https://www.space.com/41749-elon-musk-living-in-simulation-rogan-podcast.html

 

[samclem]

I can accept valid critiques of Tesla products, but most of the "warnings" about Musk seem to omit any such analysis.

Isn't Musk a big part of the equity valuation of Tesla? The stock price sure can't be justified by present/historical earnings, so people buying it must believe the future will be very bright (or that at least another buyer will think so). Given that, the way Musk behaves is an entirely valid factor in determining the value of Tesla shares.

 

[Running_Man]

I guess I don’t get the uproar over drinking whiskey on a podcast. I’ve seen similar on network tv and cable. EM was totally snookered by the podcast host. Musk is a tool but also has miserable judgement on these issues. I think the accounting chief hired on one day before the “funding secured tweet”. It’s hard to see how this could work out well. It’s a shame thinking of what TM could be but also hard to avert my eyes. OTOH it’s a chance for the true believers to buy the dip/rebound off today’s 8% drop.

TESLA without Musk is bankrupt, Musk is giving the appearance of being mentally unstable at the present time, the fact that so many senior leaders are leaving after short stays makes me believe they came to the same conclusion. Many people who have no daily interaction with Musk believe in him strongly, he is the modern Iron Man and that within a month he will have Tesla releasing a computer - brain mind meld to control machines (or vice-versa)

But from a financial standpoint there is no defense for his actions of the last month, any other CEO would be terminated under these circumstances but if they terminate him the company goes under.

For all the "great products" Tesla as configured cannot support a 2 billion annual cash drain with their present setup. Most likely they go bankrupt and someone else will get to claim the assets and run the business profitably as a division. This is very close to the end of the road for Elon

 

[oneill225]

Agreed

Isn't Musk a big part of the equity valuation of Tesla? The stock price sure can't be justified by present/historical earnings, so people buying it must believe the future will be very bright (or that at least another buyer will think so). Given that, the way Musk behaves is an entirely valid factor in determining the value of Tesla shares.

I totally agree that Musk inspires many to believe in the product in the same way Steve Jobs elevated Apple and Bezos elevated Amazon. I don't take issue with balanced criticism of Musk. To be taken seriously, however, I think such criticism needs to go beyond the salacious headlines and into the merits of the actual product/service being sold.

Regarding being in the red, I recall that that was the big hit on Amazon for many years, as well. Those who are still believing in Tesla (myself included) are doing so because they see a huge future market and a company that is well positioned to take advantage of that market.

 

[Chuckanut]

Tearing down people with things and events taken out of context seems to be the new normal for the mass media. Also, reports based upon 'unnamed sources' about things that may have happened in regards to so-and-so is another tactic. This seems to be SOP for the news media these days. I believe Middle School children call it gossip.

Is it any wonder people don't take the news seriously these day. Like Mr. Dickerson of CBS Morning News has said:

"The press did all that good work ruining its reputation on its own and we can have a long conversation about what created that."

Tesla? I have no idea what will happen to it. I do hope it succeeds. And if it fails I hope Mr. Musk puts all his formidable talents into SpaceX.