TSLA corporate outlook

lorenfb said:

Durandal said:

I think the early announcement of layoffs was to allow the price to drop now so it may recover by March 1st. .

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You're joking, right? That's one of the most laughable posts on this forum!

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To be honest, I find this plausible. For a normal company, no. Before I learned about Tesla also no, but I have seen an incredible amount of abject bulls**t come out of Musk's mouth regarding Tesla. He did, not so long ago, completely fabricate a story about taking it private, you'll remember.

If I had to bet my life on it I'd say this wouldn't happen, but I couldn't dismiss it out of hand like I would for another company. Musk habitually, um, let's say "sugar-coats" things.

We're still waiting on the coast to coast drive, still waiting on the standard range. Always "almost here". "Just a few more months".

Frankly something feels different this time to me. I am starting to wonder if time is really almost up for TSLA. They cannot sit on the pot for much longer without taking a dump, and that means profits. Now they are shrinking their force substantially. The valuation only makes sense if they are on a huge growth trajectory. They still cannot consistently make over 5k/week (not that they need to--they are able to hit demand already)--didn't musk say he had "zero doubt" that they'd be at 10k/week by end of 2018? Yep.

https://electrek.co/2017/08/03/tesla-model-3-elon-musk-production-reservations/

“What people should absolutely have zero concern about, and I mean 0, is that Tesla will achieve a 10,000 unit production week by the end of next year. […] I think people should really not have any concerns that we won’t reach that outcome from a production rate.”

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Meanwhile they cannot even hit half that rate consistently.

I was just reminded of this tweet from Musk, six months ago. He laid off 9% of his force and said

"I also want to emphasize that we are making this hard decision now so that we never have to do this again."

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Six months later...did it again.

I'll say it again because I think it is worth repeating. The stock is overvalued. Its market cap is 50% more than Ford's and about 95% of Chevrolet's. Yet their revenue is paltry by comparison and they are in a clear fight for their survival. Shares should not be trading where they are.

EatsShootsandLeafs said:

I was just reminded of this tweet from Musk, six months ago. He laid off 9% of his force and said

"I also want to emphasize that we are making this hard decision now so that we never have to do this again."

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Six months later...did it again.

I'll say it again because I think it is worth repeating. The stock is overvalued. Its market cap is 50% more than Ford's and about 95% of Chevrolet's. Yet their revenue is paltry by comparison and they are in a clear fight for their survival. Shares should not be trading where they are.

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Thanks for the reminder of that. I did recall at least several previous layoffs and had forgotten the previous one was so recent.

https://www.marketwatch.com/story/tesla-to-layoff-9-of-its-workforce-elon-musk-says-2018-06-12
https://twitter.com/elonmusk/status/1006597562156003328/

As for market cap comparisons, you mean GM? Chevrolet is only one of several GM brands.

Yes, TSLA's stock has been insane for ages. It is one of many that trades with no relationship to traditional fundamentals and its market cap is nutty. It is irrational.

I didn't realize this week Tesla also jacked up pricing of supercharging by a huge amount.

I do not play the stock market, but if I were in the habit of doing it and not just buying index funds I'd buy some puts on the stock. I think there is massive downside potential on this stock.

Yesterday tesla stock was down 12% when I checked.
Tesla would be a billion dollars in debit, post negative profits, revenue down reports and people would still buy the stock.
Now they are waking up.

https://www.cnbc.com/2019/01/23/tesla-layoffs-details-reduced-hours-model-x-model-x-production.html
Details about Tesla's restructuring emerged after the company announced a 7 percent workforce reduction on Friday-- its second round of layoffs in just seven months.

cwerdna said:

https://www.cnbc.com/2019/01/23/tesla-layoffs-details-reduced-hours-model-x-model-x-production.html
Details about Tesla's restructuring emerged after the company announced a 7 percent workforce reduction on Friday-- its second round of layoffs in just seven months.

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I knew demand on S would crater with the cessation of base S, so to do it in concert with a hacking out of S employees makes sense.

Stock again on its way down of course.

The valuation still makes absolutely no sense whatsoever. You look at the revenue of this company vs competitors--which are actually profitable (e.g. Ford) and they are making 10X the revenue with only 4X (?) the headcount, plus profit on that, there's so much risk with this stock.

I think it's all Elon. Without him people would have bailed a long time ago. It's really cult-mentality that has people holding shares in TSLA, IMO.

I know the cars are objectively very good, but business is business.

Model Y is where it's at. Can't come soon enough.

LTLFTcomposite said:

Model Y is where it's at. Can't come soon enough.

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Appetite for this will be large in the U.S.. American's love of SUVs combined with Tesla brand, more affordable than the Model X...Yes, not technically an SUV rather a CUV, but that will do the trick. If I had a bunch of cash lying around, would buy more TSLA now.

LTLFTcomposite said:

Model Y is where it's at. Can't come soon enough.

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Totally laughable! Another scam waiting to happen, i.e. reservations. So with TSLA below the convertible bond strike price (~$360)
and the 3/2019 due date, Tesla will probably need cash. Why not announce the MY in March and scam the public again by taking $1K
reservations with a $25K MY price, right? Still a lot of lemmings out there even after the $35K M3 scam. But then again, Elon could
announce a "private equity" deal again for about $400/share and spike TSLA up in March, i.e. TSLA owners have short memories.

LTLFTcomposite said:

Model Y is where it's at. Can't come soon enough.

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:lol:

You can't be serious.

Model 3 was where it was at. That was going to make them profitable. Not the S. Not the X. The 3. If it's not the 3, why would it be the Y? And what's after that, maybe they finally make a pickup truck and that is the profitable vehicle, finally? Fans may tolerate them punting again but I don't see big investors making the same mistake twice.

EatsShootsandLeafs said:

Model 3 was where it was at. That was going to make them profitable. Not the S. Not the X. The 3.

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Actually, Tesla could have chosen to produce the Model S at a profit. They chose not to, but it was an option. They chose growth, and a massive investment in starting production of the Model 3.

Tesla may have not have a choice other than to try to keep making a little money producing Model 3's for a few years.

Saudi Arabia hedges on Tesla - FT
Jan. 28, 2019 12:10 PM ET|By: Clark Schultz, SA News Editor
Saudi Arabia's Public Investment Fund has drastically cut its exposure to Tesla (TSLA -1.6%) by hedging nearly all of its 4.9% stake, sources tell Financial Times.
State-owned PIF fired off the hedges after the market closed on January 17 with the help of JPMorgan. Shares of Tesla have dropped about 16% since the strategy was enacted.

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https://seekingalpha.com/news/3426500-saudi-arabia-hedges-tesla-ft?dr=1#email_link

For the Saudis, that's about $2.5B or about 50 million barrels (@ $50 per). But when you produce about 10M barrels per day, that's like
chump change to the Saudis. As most investors with TSLA in their portfolios aren't as "productive" as the Saudis, they might consider some
form of a hedge too, e.g. selling TSLA CALLs, given what might be reported next week by InsideEVs as the first month of 2019 ends.

I happened to be in the area so I stopped by the Richmond, VA Tesla dealership yesterday to ask some specific questions and check out the model 3 in a little more detail. I was surprised how much stock they had at the dealership ready for delivery... there must have been 20+, mostly dual motor, model 3's on the lot. I wonder if there was a big drop off in demand after the tax credit reduction or if they are just moving to more of a "cars on the lot ready for delivery" model. I don't remember ever seeing nearly that much available stock before.

Has anyone heard if you get a software limited model S/X can it be upgraded later? How much?

LTLFTcomposite said:

Has anyone heard if you get a software limited model S/X can it be upgraded later? How much?

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They've sold the upgrade in the past (S60=>S75), so I would expect them too in the future. Based upon the advertised range, it looks like the base S/X is coming with about 92% of the battery available.
https://electrek.co/2019/01/29/tesla-launches-new-cheaper-model-s-x-software-limited-battery-pack/

This makes the new base car much nicer than my S75D, since it will SuperCharge at the full rate vs. the 99kW limitation on the 350V (75kWh) packs.

LTLFTcomposite said:

Has anyone heard if you get a software limited model S/X can it be upgraded later? How much?

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If it follows the pattern of previous software-locked batteries, you would be able to pay for the upgrade. I would expect the price initially to be around $8000 but in a couple of years it might drop to about $2000, if it follows the 60D to 75D pattern.

What Tesla appears to be doing is significantly lowering the price on the 100D without annoying recent buyers (too much, at least). The 310 mile range car will Supercharge just as quickly as the 335 mile range car — same battery — and the daily use range will be almost identical (it is likely that a "100%" charge will be about 92% of the battery). It appears that a longer range Model S is coming soon and this pack will then become the standard range model. For the time being, I would expect that nearly all Model S buyers will choose the 310 mile version, save for those willing to pay (a lot) extra for the performance car.

They still have a $9k gap to close to get to the short range model 3 so this approach wouldn't get them all the way there but IMO an "upgradeable" short range 3 could be interesting at a premium to the 35k price point. What was the short range battery supposed to be, 180 miles? As a customer I'd be more confident buying a short range if I knew I could get a do-over on the decision... also safer from a resale value perspective.
Of course it's all in the numbers.

4th quarter investors letter: http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0

LTLFTcomposite said:

They still have a $9k gap to close to get to the short range model 3 so this approach wouldn't get them all the way there but IMO an "upgradeable" short range 3 could be interesting at a premium to the 35k price point. What was the short range battery supposed to be, 180 miles?

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https://web.archive.org/web/20170731003139/https://www.tesla.com/support/model-3-reservations-faq said

Which features come standard with Model 3 for $35,000?
Model 3 is designed to be the safest car in its class, with 220 miles of range, and zero to 60 mph acceleration in 5.6 seconds. Standard features also include full self-driving hardware, Supercharging capability, a rear glass roof, a 15” touchscreen display, Wi-Fi and LTE internet connectivity, free over-the air software updates, full LED lighting, and an 8-year, 100,000 mile battery warranty.

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