By the way somisogaden, here's the average of analyst ratings as the date approaches. Every single year looks like this. Of course they are going to be bullish if they're getting the business so horribly wrong if year after year after year they're seeing $4/share in profits instead of the reality of massive losses:
These Wall Street banks pump the stock which keeps the price high which (with deliberate Musk lies/fraud) allows for secondaries to keep Tesla alive, on which Wall Street banks collect huge fees. Tesla has $9 billion in paid-in capital which, combined with fraudulent bond offerings (Musk committed jail-time securities fraud in 2017 when he lied about the state of production right before a bond offering), kept them afloat.

As I've always said the bear case depends on demand. If high end demand runs out - it looks like it has in the US and the $45K+ car segment just isn't that large - then they can't make cars profitably and they're done for. They need huge sums of capital for the next stage, and without free cash flow it's going to be pretty hard to get it. Tesla has done OK up until this point despite massive losses and incompetence because the market cap was so high relative to capital needs for their tiny production volumes that they could survive on secondaries. That's coming to an end as capital needs go up and up. This is a new phase in Tesla's life. Everything they have is also now mortgaged.

If there is enough high price demand then Tesla survive to the next iteration. If high end demand is finished soon then Tesla is too. That's what you're placing your bet on. Even Musk admits that high end demand is a problem with this hilarious quote:

How are those short term shorts doing?

stock price bro!

I do feel kinda bad for the guys playing the short term/weekly puts. The "bad news" continues and the stock doesn't care (tech bounce the last few weeks hasn't hurt).

I'm short and will add more if it gets higher, I think many people are ignoring the news and trying to range trade it which has worked in the past, buy 300ish sell 350ish.

People need to understand that they are not going to wake up one day and the Elon is in chains and the stock is halted and opens at $10. Just not going to happen. What will happen, eventually, is the P/E must come down as there is no growth story. They are hoarding cash and not spending on CapEx as if they are/will be in a liquidity crisis. No real growth/tech stock has ever cut capex like this.

But will the P/E contract next week? next month? next year? Bears need to come to terms with this reality and trade accordingly. It's a great stock to be short for the long term, no doubt.

I mean, bankruptcy didn't seem too far off in light of the lawsuits for the fraud you mentioned when Musk gave production guidance that he knew was impossible. Then a couple people got killed with the reckless roll-out of Autopilot, and it seemed like that had a chance to be a company-ending lawsuit. Then for much of last year this thread was abuzz about how Tesla must not be able to raise because of SEC action or they couldn't dare show the statements needed for another offering lest the fraud be laid bare, so bankruptcy seemed imminent. Throw in the $420 go-private and whatever other scandals I've forgotten—there's been an air of impending bankruptcy in this thread for a while.

The stuff about analysts being worthless is surprising to me. I'll defer to the two articles you linked, but I still don't really understand how they have jobs if anyone with any sense knows what they do is completely worthless. I don't understand why J.P Morgan would hire some guy to just stamp buy ratings on any stock with a high revenue delta. How have all these dog**** analysts not been culled and replaced with smart people who provide value (or not replaced at all)?

Bankruptcy was imminent. You were getting paid 100s to 1 on bankruptcy and Musk himself said that in 2018 they were "weeks" away from dying. So he's either a shameless liar or the bears analysis of impending collapse being an excellent bet was spot on. And there's lots of other evidence the bears were right.

Musk's $35K Model 3 was a fraud. It was never possible. What they did was create a $65K Model 3, made it shoddily, and found enough buyers to stay afloat for a couple of quarters. Whether this demand continues is the only question that matters.
People are losers/morons with a massive unjustified expert bias.

How do religions continue to have people believe the notion that they (and they alone) hold the keys to getting into an imaginary utopian place that no one has ever seen, and that bequeathing money will help with an individual getting there? How has the Catholic Church reversed itself on nearly every pronouncement they've ever claimed was God-given truth, yet is still the world's largest centralized religion? The Catholic Church is the original Wall Street analyst/cult of personality, and they've been around for nearly 2000 years. If it's so incredible to you that back-scratching, group thinking Wall Street analysts would survive continued stock pumping then you don't really understand how the world works.

As for analysts, I have a question for you. How many of the 500 S&P500 stocks have a majority sell rating from analysts?

150
74
32
11
3
0

The answer is 0 in the middle of last year.

That says it all really.

It's a bit weird you are making jokes/giving bears advice about playing the range from 300-350 given your posts below. You think everyone forgot you (& MrFeelNothin) were in here non stop on the lead up to earnings.

Worth $.18 now I mean lol.

Sure, I admit I expected a dump with deepak leaving, market does not seem to care.

Doesn't change my long term thesis though. Scroll back further and you will see I only play straight shorts, NOT puts because I expect the drop to take longer than most bears expect.

You actually made the correct point about the post ER IV crush but then totally disregarded it. Maybe a little bias from being short yourself? I just think it's a little bit weak to be making jokes about short term put holders when you were encouraging MrFeelNothin it was going to turn out well when at the time you were giving that advice was totally wrong and then doubled down on that advice.

Read it again, I wasn't joking at his expense, I legitimately feel bad for him and others with puts - all the negative news and the stock is still up. It sucks.

And sure my long term short thesis probably had me read too much into the news, I admit being wrong - in that case I thought puts would pay off and they didn't. I'm not dismissing that.

That said, I have always suggested shorts over puts ITT because it has and will continue to take longer than bears expect to unravel.

Are you qualified to judge what negative news is based on your judgment so far? That's my big issue with this thread in general. It's a bear echo chamber when the stock is STILL range bound. There are so many better opportunities out there on both sides, so much time wasted here outside a few solid traders who have been able to put the emotion aside and trade the range.

I'd say the January deliverables was objectively BAD NEWS.

But sure, it's still in the trading range from last year. I don't know when it will finally start to break down, but I want to be short when it does.

Who thinks a 0-growth car company should trade at 70x earnings? If you are waiting for it to break the 250 support of the trading range before getting short there may not be that much further downside.

As long as elon is around it will always trade at a premium...just nowhere near as high as the current premium imo, so we'll see.

I think the analysis is pretty simple.

Bull/neutral analysis: Tesla got a second (barely) profitable quarter and said things to make the Dream Crushers of the world a little more trusting.

Bear analysis/last 5 minutes of call: The CFO is leaving - the last of the long term accounting staff - and they're replacing him with an unqualified kid in a very strange move. Only frauds and horribly run companies do things like that. Especially given that the last accounting staff has quit.

In the short term (days) the bear analysis mattered more. In the medium term (weeks/months) the bull analysis mattered more. But it's fairly close. The real deciding factor was the continued strong market buyup, and particularly the tech momo led market rip on good earnings. It's pulled up the entire tech sector and Tesla nearly always buys up off lows when there's no big news overhang and momos are ripping.

I agree the market played a factor but I'd also remind everyone how this was outperforming during the correction. I think there's a lot of truth to what Morish was suggesting about hedgies being forced to liquidate shorts due to underperfomance into EOY (you've seen this confirmed in short interest on the decline). So the reverse should be true on the rebound (underperforming on a relative basis but still off the lows). Still nowhere near a resolution on anything and we will continue to spin on.

Thoughts on Tesla buying Maxwell?

They should buy everything they can. If they pay $1.50 in stock for every $1 in value they acquire, they come out way ahead in the long run.

Bears: Maxwell is a scam, near bankrupt company already busted for fraud (hence perfect fit) - to be used by Tesla as way to pad expenses as part of merger costs and game the Q1 report even more. Not to mention bailout chinese shareholders to hopefully get better treatment in china. Also a small stealth equity raise by overpaying with stock.

Bulls: genius! bringing battery tech in house gives leverage vs Panasonic and can create new best-of-breed batteries.

Take your pick.

Someone had dirt on Elon and leveraged it into a buyout.

In all seriousness it looks like a natural fit with minor advantages for Tesla but nothing of real consequence. Given that they got shareholders to pay for the talent they're acquiring it seems slightly positive.

Agree with this, they could buy a nice revenue stream or even a smaller cash-rich company with their stock. Less regulatory hassle than a secondary stock offering too (which apparently they cannot do). Nobody cares about premium or dilution it seems.

I have said hundreds of times, probably thousands by this point, that nobody, even the bulls, thinks Tesla is actually a well run company. People are banking on Elon Musk's charisma (ability to raise/scam money if you will) to build Tesla brand to a point where there is a giant company that someone can then come in and make the company a cash cow while Musk stays a figurehead. Wont' be the first time Wall Street pulls the stunt off. (Thomas Edison was famously managed by GE's cofounder and Ralph Lauren by a CEO the BoD imposed upon him).

And there is also a giant long term (almost indefinite duration) option attached that's basically on Musk's ability to pull a Bezos, finding adjacent businesses that turn out to be much more profitable than the original (logistics vs. books).

Unlike most observers, I don't think Musk is buying Maxwell for "dry electrodes." The tech in that is years away from becoming both cost and weight competitive with current "wet" technology and there are competing "dry" electrode technologies in labs all over the world. Furthermore, moving to dry electrodes right away means obsoleting much of Gigafactory before it's even complete. It's silly.

The ultracapacitors however have immediate application in terms of boosting on the fly recharging (extending battery life essentially) and in terms of boosting acceleration (faster discharge, basically a cache of sorts). Those could be incorporated into models next or even this year without obsoleting the Gigafactory before it's even finished.

That said, Musk may see the dry electrodes as a potential path forward for the semis (which needs a **** ton more storage density that current tesla batteries don't even come close to providing). I think most people will think a good (realistically optimistic ) time line for that shows a deliverable semi some time in 2021, probably even 2022, but Musk of course will put forward another stupidly optimistic timeline and say something stupid like late 2019.

And nobody will believe him. Then bankers will ask: "where you building this dry electrode Terafactory? How much do you need? You finish in 2019? Yeah, sure, here is the check."

Then they'll turn around and price Tesla assuming the factory won't finish until 2022 at earliest and probably later.

This is a false statement. Everyone from retail bulls to analysts think Tesla is doing an amazing job against big odds.

Very few people are banking on that. Brand is such an overused and near meaningless term when it comes to technology. If you make **** well that people want to buy at a price point they want to buy it, you have a "brand".

You could rebrand Tesla as "cuck motors" and their performance electric cars would sell as well. You could rebrand Apple as "**** phones" and their hardware + ecosystem would bring people back right away. Branding as applies to complex tech is pure utter bull****. The people who were backing Blackberry to beat the iPhone because of an unbeatable much loved brand believe in "brand".

Brands are for generic commmodities like beer and cola and razors and simple consumer goods and websites and services. Brands have real value there. They're mostly a bunch of bull**** analyst noise in hardware tech.
This exists somewhat in bull minds, but it's pure bull**** of course. Musk is incompetent and has so far spun off zero worthwhile businesses despite a lot of hype.

Does anyone actually think that except for completely insane/clueless bulls?
Yep. He bought some engineers and he bought a capacitor layer on the batteries for the reasons you mention. Anyone sane realizes this right away.

Bankers are no longer cutting checks for Musk. Look at the extreme capex cut/lack of capital raising/mortgaging hard assets in the last year. Look at the horribly failed SpaceX minor raise. Hard money is avoiding Musk now.

Both lose money and both have been fined by the SEC, lots of synergies

The SpaceX raise wasn't a fail. Elon didn't get as much as he wanted but he still got quarter a billion for SpaceX... and it was oversubscribed enough Elon definitely could have raised 500+m if he wanted.

The story however is still illustrative. It shows Wall Street still wants to invest in Musk (again, the debt was oversubscribed... by a lot). And it also shows Wall Street is now starting to put restraints on Musk. (GS balked when Elon was like "no covenants." Elon gave those covenants anyway eventually with BoA.)

When Musk says he wants to raise capital (for Shanghai maybe?), bankers will fall all over themselves to underwrite the issue, barring some financial crisis, another Musk meltdown, or another government shutdown preventing the SEC giving Musk needed approvals for a big capital raise.

Man how do people fall for the oversubscribed story when

1) it didn’t fill

2) the terms were terrible


Quick finance lesson, everyone wants to be sr debt. If 4 banks offer 250m sr only debt on ****ty terms, saying “oversubscribed” is highly disingenuous. This is the best case of what happened.

"He didn't get as much money as he wanted, but he could have gotten more if he wanted"

Not exactly the most cogent take

I don't really get this take.

The facts:

1. Tries to get $750 million of loans on wide terms
2. Their long time partner bank Goldman Sachs drops them part way through the process, which is unheard of in the business
3. Ends up with $250 million with terms, even while offering 425 basis points above par:
4. Lays off 10% of workforce soon after, hurting various expansion plans, then backs out real estate lease, while the CEO sends an email about avoiding bankruptcy.

I'm not seeing a healthy view of SpaceX among the banks.