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Tesla Plunges After a Conference Call

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Re: Tesla Plunges After a Conference Call

#301

Post by dragonwriter »

greglindahl wrote: post #281
jacquesm wrote: post #274

Earlier quoted context omitted.

If you feel that pissing off institutional investors is going to reduce the price of the next raise I'm fine with that. As for the second part of your comment: The Economist wrote that Tesla would have to raise money this year, 2.5 to 3 Billion $. Elon Musk's response to that: https://twitter.com/elonmusk/status/984705630106673152 And as far as I can see it has no qualifiers. The complete text of the tweet: "The Econ…

Notice that his response to the Economist is in the form that I said -- the word "need" is present. As for Tesla's targets, they have changed (downwards) several times, and I've seen plenty of people noticing. IIRC the target announced after Q4 earnings was 2,500 Model 3's per week by the end of Q1, and they missed by 500. Honestly, this entire discussion is the kind of thing I'd expect on Seeking Alpha, not Hacker N…

> As for Tesla's targets, they have changed (downwards) several times, and I've seen plenty of people noticing

Bloomberg has even charted the successive reduced projections against measures of actual production.

https://www.bloomberg.com/graphics/2018-tesla-tracker/

Re: Tesla Plunges After a Conference Call

#302

Post by dragontamer »

snovv_crash wrote: post #296
dragontamer wrote: post #130

Earlier quoted context omitted.

Indeed. It is obvious to anybody looking at the balance sheets of the company that TSLA will need to raise capital soon. Either late 2018 or maybe early 2019. A company with $3 Billion cash that's losing $1-billion per quarter will need more money. That's just the facts. Musk is going to be either relying upon institutional investors / the stock market in general for another round of equity offerings, or relying upon…

Linear approximations aren't really the best way to do time series predictions.

Better than Elon's exponential approximations: https://twitter.com/elonmusk/status/881757617416056832

I'm not necessarily saying "TSLA Will definitely run out of money in 3-quarters". I'm saying "TSLA is currently, on a linear-approximation track to run out of money in 3-quarters".

Obviously, the Model 3 rampup will improve profitability. But the Model 3 Ramp-up also requires more resources (more humans in the assembly line. More robots in the assembly line. etc. etc.). So that still requires money.

A linear approximation is basically a quick-but-shitty-approximation. Its really easy to calculate and full of flaws, but full of flaws in a way that almost everyone can immediately understand.

Exponential approximations (ie: Musk's approach) might be more realistic... since production lines can exponentially grow to some degree. But if you are off by even a little bit, then you end up being ... oh I dunno... 8-months to 10 months late with your 5000-cars per-week estimate.

Re: Tesla Plunges After a Conference Call

#304

Post by pvg »

pm90 wrote: post #289
pvg wrote: post #239

Earlier quoted context omitted.

Attracting the right kind of investors is more important to him than attracting all the investors. That seems a bit counter to the purpose of an open public market.

Is it really though? An open public market just means that anyone can purchase the stock; not that just anyone should .

The GP was saying how important it was to Elon Musk to have the right kinds of investors rather than merely people who give you money. This is sort of the opposite of what a public capital market lets you do.

Re: Tesla Plunges After a Conference Call

#305

Post by throwaway2048 »

mwfunk wrote: post #293
mr_spothawk wrote: post #243

Earlier quoted context omitted.

> It's the second time in a short while that he shows he does not want to run the company like it is a public company. But he does want access to that capital. I think that Matt Levine (bloomberg) might suggest there's more & easier money to be had in the private market, anyway (see Uber, pre-IPO Spotify, etc...). The problem for Musk, if he also shares that view, is that taking the company private seems (to me) like…

I have no idea why anyone would ever downvote this, it’s a very non controversial statement. Being a public company is a double edged sword, it most definitely has downsides to go with the upsides. Depending on the company/industry/timeline/economy/etc., for some companies the downsides of being public can become a lodestone dragging them down (see Dell).

I think its too early to say Dell has been a posterboy for why going private makes sense, the company was saddled with massive amounts of debt due to the trasition, and are currently struggling to keep above water.

The situation has a lot in common with why leveraged buyouts almost always end in disaster, dispite the hype surrounding them when they are first annouced.

Re: Tesla Plunges After a Conference Call

#306

Post by hcknwscommenter »

gr3yh47 wrote: post #67
danso wrote: post #8

Earlier quoted context omitted.

Letting one person ask 10 questions means less time for other investors to ask their own individual questions.

To be fair (edit: figuratively, to state a favorable viewpoint on Elon's decisiont to give more time to one person) he was asking excellent/interesting/challenging questions and it was really interesting to me to hear Elon's answers. I think Elon might have done well to be less brusque with the more run of the mill questions but I really enjoyed listing to the long exchange there

> he was asking excellent/interesting/challenging questions and it was really interesting to me to hear Elon's answers.

In the context of an investor call, which are supposed to convey an investment thesis for the company, I cannot agree. The questions were too pie-in-the-sky to have any bearing on whether TSLA equity/debt/or hybrid have an attractive relative value. It seemed to me that Elon was simply running out the clock.

Re: Tesla Plunges After a Conference Call

#307

Post by dragonwriter »

gfody wrote: post #236
arkis22 wrote: post #38

Earlier quoted context omitted.

A little more context from the WSJ article ( https://www.wsj.com/articles/teslas-elon-musk-turns-conferen... ) >“We’re going to go to YouTube, sorry. These questions are so dry. They’re killing me.” He directed the operator to take questions from Tesla investor Galileo Russell, whose HyperChange TV YouTube channel features a video titled, “Why I Bought Tesla Today at $255/Share.” >Mr. Russell, who had campaigned to g…

In the grand scheme of things figuring out how to make model3's faster than they can sell them is a boring problem for Musk and I could imagine how frustrating it must be to have all the banks freaking out as if they're going to miss a fleeting opportunity to sell a bunch of cars. It's like when Nikola Tesla was trying to build worldwide wireless telegraphy but J.P. Morgan just wanted him to make fluorescent lights.…

> In the grand scheme of things figuring out how to make model3's faster than they can sell them is a boring problem for Musk

It's the gateway problem to any of the ones he might find more interesting, and if he isn't willing to engage with that problem enough to satisfy investors, he should be “Chief Ivory Tower Visionary” and let someone else be CEO. Or, at least, get a COO and gracefully hand off boring operational questions to them.

Re: Tesla Plunges After a Conference Call

#308

Post by hcknwscommenter »

mephitix wrote: post #231
YurtleTheTurtle wrote: post #123

Earlier quoted context omitted.

He doesn't want to admit they company will need to raise money later this year.

He actually addressed capital raise on the call and it was pretty clear when he kept saying that they wouldn't need or want a capital raise

Yes, but when institutional investors pointed out holes in his explanation about how you could go from burning 1B a quarter with 3B on hand and not need a capital raise, they got "boring" and "next."

Re: Tesla Plunges After a Conference Call

#309

Post by dragonwriter »

mephitix wrote: post #231
YurtleTheTurtle wrote: post #123

Earlier quoted context omitted.

He doesn't want to admit they company will need to raise money later this year.

He actually addressed capital raise on the call and it was pretty clear when he kept saying that they wouldn't need or want a capital raise

> He actually addressed capital raise on the call and it was pretty clear when he kept saying that they wouldn't need or want a capital raise

Yes, his forward looking statement was clear, just as Tesla's repeatedly-missed production projections have been clear.

OTOH, when your statements about the future keep turning out to be wrong, it's not surprising that people want more than your conclusions but also want supporting evidence that those conclusions are grounded in reality.

Re: Tesla Plunges After a Conference Call

#310

Post by [deleted] »

salawat wrote: post #269
danso wrote: post #134

Earlier quoted context omitted.

These are interesting questions, but for the most part, don't require concrete answers in the same way that "Do you have enough money?" do. Musk has plenty of places to talk about his bold ambitions and predictions. But the earnings call is one of the few regularly scheduled occasions when he and other executives can be demanded answers about current realities.

I'm not familiar with these types of calls, but might it be possible he's trying to avoid getting into the nasty bits in front of all of the investors collectively in the hopes of swinging back around and dealing with them individually? I've found that strategy to be pretty effectively employed by "perception management" types elsewhere. You know, guys with "reality distortion fields?" When you have a large group of…

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