Tesla shorts with barely a tattered thong left....

[BCBiker]

Currently shorts are down $20B in 1 year.

[Nysoz]

So great.

So hot right now

[Zaphod]

Actual footage of Zaphod at the annual shareholder’s meeting.

So great.

[Jaqen Haghar MD]

Actual footage of Zaphod at the annual shareholder’s meeting.

I feel like Im taking crazy pills.

Yes, the stock is ripping and behaving as if that was the case....but that doesnt mean it is. Revenue, profits, etc....are easy to look up and you can do so straight from Tesla website/IR.
Tesla's 2019 revenue growth was 2% yoy, just a bit of the farthest cry from 50% as one can get. Automotive was 1%, this is directly from Teslas website.
If this is somehow not the case, please let me know.
Again, stock performance does not necessarily follow company performance, especially for Tesla.
Im glad you made a lot of money, and hope you continue to.

[Jaqen Haghar MD]

The thing about Tesla, is that the stock trades very much on emotions, and possibilities. So bringing up logical arguments against it doesn’t really get you anywhere.

Bringing up that the company actually lost $800 million dollars in 2019 doesn’t sway the investors. It just makes them angry. Pointing out that they sold a lot more cars, but barely made any more money off those specific car sales numbers doesn’t help either.

The Model 3 was somewhere around the 27th highest selling passenger vehicle in the US in 2019, so they have a lot of opportunity for growth.

The company also has the ability to make a lot of money from selling carbon credits and software upgrades, and such so those thing are good.

There’s a lot of risk in a TSLA, so the reward may be quite high. But there is also a risk that things may not work out as theorized.

Time will tell. Either way, a fun ride.

[Tim]

“ I am just stating the case that there is significant potential for this to be one of the largest movers of the generation”
Yes it could.
Batteries, cars, marketing or technology (navigation systems). Many potential avenues for success.
How the stock price is bid up or down might not follow. But then again, it could be fantastic. I don’t think we will know by April. But I don’t see Tesla being solely a battery manufacturer. That would suck. In 5 years we need to see how the cards play out. Some competitive smoke will clear. As you pointed out, a proprietary 50% cost advantage would certainly help. Luxury cars are a niche market, time will tell whether the marketing and features can be translated to the mass market as well.

[Nysoz]

what you say is true about competition, especially in new technology. however, the 'competition' from the traditional auto makers have already come and underwhelmed for the most part. audi, bmw, porsche, jaguar, chevy, honda, nissan, kia, VW, hyundai all have offerings and some get kinda close to what tesla offers in some regards but none have put out a tesla killer. some of those manufacturers also lose money for every EV they sell. we'll see what ford does with the mach-e

other companies are going the hybrid route like Toyota and don't believe bevs will win everyone over.

in comparison to other companies tesla doesn't spend any money on marketing/advertising. other car companies are spending millions on superbowl ads. CNBC went through locker rooms and asked players what cars they drove a lot of them said tesla. $0 spent

new grads and engineers all want to work at spacex and tesla at #1 and 2. I can't remember the list off hand but the next auto maker was something like 18th. with tesla picking up the brightest youngest minds and buying up smaller battery companies with potentially disruptive tech, it'll be hard to overcome.

but I'll agree the current stock run up is definitely some speculation/fomo and looking forward. whichever type of movie tesla turns out to be, IBM/dell vs amazon/apple, it's been interesting to watch and fun to own

[BCBiker]

If Tesla gets to 65% of automotive market in 10-20 years, which I don't think will happen, the current price of the stock would be a huge bargain even if short lived.

We will see what Tesla does with their battery patents. If they are making batteries for <50% the cost of competitors using proprietary technology, which is what we will probably learn in April, that will put a swift end to this argument.

All investments are speculative, including a 70/30 index fund portfolio and cash, because they are implicit "bets" on the future that we are not privy to. I would not encourage more than your "play money" allocation to go to TSLA. I am just stating the case that there is significant potential for this to be one of the largest movers of the generation.

[Tim]

I am not discounting Tesla’s leadership and innovation. We have seen this movie before.
IBM had about 65% of the computer market and dominated the PC market initially.
Problem was it wasn’t “proprietary “. When hardware and software aren’t proprietary, the 10 year lead can vanish in a year or two. For a real life example look are the personal computer market share stats. IBM-Compaq-Dell. Who had the strongest patents? Intel and Microsoft, survivors in the PC business. Marketers played a game: business/personal, desktop/portable etc. and then “service” became the big money maker. Dell went private to transform from a commodity PC company to its current state. Using market available technology that is available to others is a short lived business plan. Competition will arrive sooner more likely than later. Tesla seems to be relying on a heavy dose of marketing. It is a clear competitive advantage, but won’t be sustainable.
In three years, the competitive landscape will be different. I call that a trade or speculation, not an investment. I have zero idea where Tesla goes. Apple was a failing PC company. But they did get patents and market well. Apple’s resurgence is due to patents on a phone and marketing. Period.
No one buys Apple because of a new Mac PC.

[BCBiker]

All right. I call marketing gimmicks.
•“you can preheat/cool the car from across the world if you wanted to”
•”Tesla is the confluence of multiple challenging yet separate technologies packaged”
•”precondition”
• Elon the genius sleeping on the factory floor

So what?
What is proprietary?
Manufacturing expertise?
Broad management strength?
Moat?
The Primary difference is EV Car from an investment viewpoint. That is a product. What technology do they “own”?
Maybe put a Ring camera with loud grenade explosion sound to “prank” people in the grocery parking lot? No liability, I was not there.
Without proprietary and ownership of technology, the “cool” factor will cool.
Rather than “precondition”, the right investment response is patent numbers and attorneys that have airtight license agreements.
Remote start and climate control simply need a refresher to appeal to target markets from an amenities standpoint. Iacocca and DeLoren were legendary, from a marketing and design viewpoint. Musk is also. Precondition and confluence are marketing. Show me the patents.
You can discount GAAP reporting. At your own risk and read the marketing of financials with no rules or standards. Marketing of financial results with a preferred narrative. “Preconditioned earnings per share”. Wonderful.
By no means is this intended to slight Musk or Tesla. Bluster and bravado is of little value in investments. High valuation on “goodwill” or “intangibles” is what is occurring.

Tim It is funny how smart people can totally disagree. Tesla is the real deal and they have been for a while. It has just taken other smart people a longer time to realize it. The rise of Tesla will coincide with demise of non-competitive OEMs that cannot compete in this environment (FCA, GM). BMW and Mercedes (similar price point to Model 3) are getting filleted in US by a single model that is production constrained and that will grow at 50% for the foreseeable future and is expanding production into their home territory next year. Every other EV has underperformed expectations and as Tesla drives down costs and prices, these companies will have to sell EVs at major losses to compete as they try to scale EV and the market fully transitions. The speed with which Tesla improves its products is their moat. When Porsche released their car, Tesla already had their next generation powertrain in-waiting to put the Porsche to shame. The same will be true for batteries, for autonomous driving hardware, software, building factories, deploying home energy solutions, etc. Things that seem unrelated are converging and when customers have to choose Tesla or some other product, the value of Tesla is overwhelming.

You can dismiss this as hype and marketing but I and many others see it as the exact opposite. Tesla does not even have to pay for marketing to sell every car they can make. How many BMWs would be sold if not for commercials with the proprietary rattle engine noise and Ultimate Driving Machine slogan? Tesla simply makes the best car and therefore don't need to pay silver eyed models to tell you it is great.

[Nysoz]

All right. I call marketing gimmicks.
•“you can preheat/cool the car from across the world if you wanted to”
•”Tesla is the confluence of multiple challenging yet separate technologies packaged”
•”precondition”
• Elon the genius sleeping on the factory floor

So what?
What is proprietary?
Manufacturing expertise?
Broad management strength?
Moat?
The Primary difference is EV Car from an investment viewpoint. That is a product. What technology do they “own”?
Maybe put a Ring camera with loud grenade explosion sound to “prank” people in the grocery parking lot? No liability, I was not there.
Without proprietary and ownership of technology, the “cool” factor will cool.
Rather than “precondition”, the right investment response is patent numbers and attorneys that have airtight license agreements.
Remote start and climate control simply need a refresher to appeal to target markets from an amenities standpoint. Iacocca and DeLoren were legendary, from a marketing and design viewpoint. Musk is also. Precondition and confluence are marketing. Show me the patents.
You can discount GAAP reporting. At your own risk and read the marketing of financials with no rules or standards. Marketing of financial results with a preferred narrative. “Preconditioned earnings per share”. Wonderful.
By no means is this intended to slight Musk or Tesla. Bluster and bravado is of little value in investments. High valuation on “goodwill” or “intangibles” is what is occurring.

preheating the car from very far away can be a gimmick or functional depending on your use and situation. I don't know what other manufacturers are including or advertising so I'm not saying this is leaps ahead of competition in any way. it is very useful for personal use though. included in the ability to preheat the car from any distance is the ability to update the car over the air to be better. I don't think many cars now can do that.

what tesla has over other manufacturers is a head start on EV technology and the best talent available to keep that advantage. their battery management and motor efficiency tops everyone else by a decent margin. they're getting their hands on more batteries than anyone else. we'll see what they have in store battery investment day coming around april.

as for building an actual car, they're learning as they go. to be fair that's been a bumpy learning experience but they're getting better at it. while the old manufacturers are doing the same thing with new models, tesla's continuously trying to make things more efficient. model y wire harness length is decreasing (model s was 3000m, model 3 was 1500m, model y is reportedly going to be 100m, average car now is supposedly 1 mile). apparently a large part of the model y is going to be 1 stamped piece instead of 70 pieces put together. cybertruck manufacturing is going to be super cheap compared to a traditional car. also no paint is a huge savings. if you search, there are patents for all these processes.

if you believe the auto market is going to tip towards EVs, tesla makes the safest most efficient cars by far and are the best poised to ramp up production due to battery constraints for everyone in general. as battery prices per kwh of storage get cheaper it's just going to be the same or cheaper than an ICE car to purchase, let alone the cost of operation and maintenance.

[Tim]

Don't know how far other remote start systems work, but a quick google says a long range version is 3000 feet without obstruction but goes down quickly if the signal needs to travel through walls, elevation and such. with the tesla app and connection, you can preheat/cool the car from across the world if you wanted to. also, with tesla you don't have to wait for the engine to get warm before you get hot air since it has an air heater... works well but energy inefficient.

All right. I call marketing gimmicks.
•“you can preheat/cool the car from across the world if you wanted to”
•”Tesla is the confluence of multiple challenging yet separate technologies packaged”
•”precondition”
• Elon the genius sleeping on the factory floor

So what?
What is proprietary?
Manufacturing expertise?
Broad management strength?
Moat?
The Primary difference is EV Car from an investment viewpoint. That is a product. What technology do they “own”?
Maybe put a Ring camera with loud grenade explosion sound to “prank” people in the grocery parking lot? No liability, I was not there.
Without proprietary and ownership of technology, the “cool” factor will cool.
Rather than “precondition”, the right investment response is patent numbers and attorneys that have airtight license agreements.
Remote start and climate control simply need a refresher to appeal to target markets from an amenities standpoint. Iacocca and DeLoren were legendary, from a marketing and design viewpoint. Musk is also. Precondition and confluence are marketing. Show me the patents.
You can discount GAAP reporting. At your own risk and read the marketing of financials with no rules or standards. Marketing of financial results with a preferred narrative. “Preconditioned earnings per share”. Wonderful.
By no means is this intended to slight Musk or Tesla. Bluster and bravado is of little value in investments. High valuation on “goodwill” or “intangibles” is what is occurring.

[White.Beard.Doc]

One more thing about warming up/cooling down the Tesla on a cold day.... You can do this in an enclosed space, such as a non-heated garage because there are no carbon monoxide emissions.

This is controlled via the vehicle's app and internet connection. 8 years ago when I got my first Tesla, this was state of the art. These days, other vehicles may also have apps that can control them.

[Nysoz]

Saw something interesting on Reddit in a Tesla investing subreddit. Their opinions are biased of course. Talking about potential s&p inclusion and what it would do to the stock. The original post had links to their points and I’m pretty sure those won’t carry over.

We have one recent historic example: when Twitter joined the S&P 500 in 2018 they popped by 60%+. (Standard warnings and disclaimers apply: correlation does not imply causation, history does not repeat, etc.)

But the price effect of TSLA inclusion into the S&P 500 is very hard to guess IMHO.

Here are the key assumptions:

• ⁠Tesla float, i.e. shares not locked down as 'not for sale' by insiders, is 142m shares.
• ⁠S&P says that 9.9 trillion dollars of global investment funds are benchmarked to the S&P 500, and this article estimates that Tesla could make up about 0.35% of the index when joining it.
• ⁠The default behavior of any competent active fund manager who doesn't know much about Tesla or doesn't want to risk anything is to follow the benchmark, i.e. buy TSLA with 0.35% of their funds. Buying TSLA will be the risk averse move: buying less or more of TSLA than the benchmark weight will be an active investment decision by the portfolio manager that he'll be responsible for ... My guess is that given the unprecedented complexity of Tesla's business model and the leveraged nature of their various businesses, the "safe" outcome chosen by a large majority of fund managers will be to flow with the benchmark allocation of 0.35%.
• ⁠That's a huge force of unprecedented magnitude: it's ~$34b of funds flowing to buy TSLA when it joins the index, buying 53 million shares at today's prices, reducing the float to 89 million shares. (!)
• ⁠I'd like to stress that this is unprecedented: never before has a company with such large valuation joined the S&P 500, jumping in at around rank 50-70 ...
• ⁠But shorts are getting squeezed out gradually as well, and I think a few major capitulations are in order as well. 25 million TSLA shares were still short two weeks ago, and the natural short interest of big tech giants like AAPL or AMZN is 1-2%, not 20%.
• ⁠So if we assume that another ~15 million TSLA short position will be closed this year (the other shorts are probably debt funds with convertibles holding about ~7 million TSLA shares short as a hedge - these will be closed more gradually as the convertibles mature or get bought by value investors), this will reduce the float to about 74 million shares.

I.e. if these assumptions are true then within a year the "effective float" might decrease from 142 million shares to 74 million shares - which is a fundamentally non-linear process, because it removes from the pool of investors the 'weakest longs' gradually: $300 price target? Long gone. $400 price target? Gone. $500 price target? Gone. $600 price target? Gone.

What will be left is an ever increasing proportion of Tesla investors who are expecting this to be the next trillion dollar company, with a price target of $5,000+. Those investors are, for most intents and purposes, listed as "float" but won't really sell at current price levels, because they are waiting for catalysts that haven't happened yet. To them the current +100% upside is nice but nowhere near what they expect from the stock in the next couple of years.

I.e. new buyers will be competing over an ever shrinking pie of the effective TSLA float ...

There's a secondary effect as well: removal of the 'weakest longs' leaves hardened investors who are holding since the IPO, or who bought the $180 dip in 2019. They'll be a lot harder to scare into selling, and this could reduce the depth of dips. There's been several attempts by the shorts to call a TSLA "top" late last year and this year already, but the resulting dips were all rather "meh".

Note that on the flip side there's also downsides of course: the global economy could crash, something bad could happen to Tesla, etc. - this is not a prediction.

But nobody really knows the exact price target distribution of shareholders and thus the magnitude of the upcoming potential short squeeze and S&P 500 inclusion bonanza.

Plus all of this is just speculation of a random stranger on the Internet, so buyers beware.

[Nysoz]

You call a remote start pretty sweet? Got one em on a 2007 Honda Accord. Never heard “precondition”, did you mean heater or air conditioning? Just kidding how far do you park from the hospital? Just saying 5 minutes is at a slow jog is well .....like time to have a 4 minute conversation and hit the road. Pretty cool.
Guess what? You set one temperature and it is soooo smart, don’t matter if 32 or 90, right on the spot. I didn’t get the sound effects. The one that says “stand back” or a “train whistle” or a “big rig horn”. Those things are loud. Don’t need the bells and whistles. That was like $50 more. State of the art on a 2007? Marketing gimmicks. Available a long long time on any vehicle. Remote is not “Tesla”.

Don't know how far other remote start systems work, but a quick google says a long range version is 3000 feet without obstruction but goes down quickly if the signal needs to travel through walls, elevation and such. with the tesla app and connection, you can preheat/cool the car from across the world if you wanted to. also, with tesla you don't have to wait for the engine to get warm before you get hot air since it has an air heater... works well but energy inefficient.