10 Facts/Headscratchers from the Ongoing TSLA Saga

So plenty has happened since my last post on Tesla, and to the untrained eye it seems like only good news coming from the Tesla hype-mobile. Well, despite my own thoughts on these things, this post is going to contain no more color than I’ve already given in the past two sentences (and the title, for that matter). For all my followers, the unadulterated timeline of what we’ve seen over the past few weeks, and I will leave you to think on it as you please. [This will, to the best of my ability, be in chronological order]

  • Last week on Tuesday, Tesla CEO Elon Musk announces via Twitter that a very significant and important announcement regarding Tesla Motors will be coming out on Thursday, 3/28 (the penultimate day of Q1 2013) in which he says he will “put my money where my mouth is in a [very] major way.” TSLA stock jumps 4% within minutes of the tweet.
  • The next day, Musk tweets again that the announcement will be moved to Tuesday of the following week (4/2) in order to not be a distraction to Tesla’s quarter end.
  • Completely unrelated to the aforementioned tweets, Musk posts a blog on Tesla’s website just after midnight on April 1 announcing that Tesla has achieved profitability for Q1 and exceeded its company-supplied guidance of 4,500 Model S deliveries, clocking in at “over 4,750 Model S sales,” and revises guidance to achieve both non-GAAP and GAAP profit for the first quarter. In the same note, Tesla announces that it has decided not to put the 40kW-hr Model S into production due to “lack of demand,” citing that only 4% of orders were for this particular model. Further, all Model S cars will be equipped with the supercharger hardware (usually only available on the 85kW-hr or as a $2,000+ upgrade on the 60kW-hr) already installed. People who did not pay for it will have it disabled through a software governor, but can upgrade at any time if they pay. The stock surges about 16% to an all-time high in the $43-44 range.
  • On Tuesday, 4/2 at 2:00pm PST, Tesla makes its much-awaited major announcement: they have reached an agreement with Wells Fargo and US Bank to provide financing for the Model S, with a guaranteed buyback agreement in which Tesla will repurchase the Model S from the customer after 36 months (if they so choose) with residual value pegged to that of the Mercedes S Class. Tesla announces on a conference call that the financing will be in the area of $500/month for qualified lessees.
  • In order to even get remotely close to a $500/month lease payment, according to Tesla’s lease calculator, one must live in California and receive a full $13,000 EV tax credit, have a superior credit rating, be able to deduct the Model S as a business expense, value their time at a minimum of $100/hr and take advantage of EV access to the carpool lane on the highway to save several hours worth of time doing so. Also, the lessee will need to save at least 2-3 hours a month (at a rate of $100/hr minimum, again) by not having to waste time pumping gas. Tesla does not account for the fact that charging a Model S typically takes at minimum 1 hour and filling up a tank of gas takes around 10% as long. For what it’s worth, most estimates so far have the monthly rate pegged at about $1200/month, not including the 10% down payment required to begin the “blease.”
  • Not mentioned on the conference call or in the press release but present at the bottom of a page on Tesla’s website pertaining to the leasing program, the “blease” financing is only available in 8 states: CA, CO, IL, FL, NJ, NY, OR and WA. Coincidentally, these are all higher-income states and all have generous EV kickbacks for owners, as well as emissions credits for anyone who sells a car in their jurisdiction. That would mean Tesla gets their all-important emissions credits on leases as well.
  • After the announcement of the lease, the stock promptly tanks 8%, closing on 4/3 in the $41-42 range on heavy volume.
  • It is revealed that Tesla sales representatives sent out letters in mid-late March to reservation holders urging them to “confirm and send in their payments to allow Tesla to reach a “huge company milestone,” which was Q1 profitability.
  • Elon Musk denies any knowledge of the email, instead saying that some of his sales staff got “a bit overzealous” and sent the emails off on their own. He reiterates that no recognition of deliveries are actually made until the car is officially in the hands of the customer after the delivery process. Language used in all SEC filings by Tesla do not explicitly require the physical delivery of the car for revenue recognition, however.
  • In the conference call, along with several interviews given recently, Musk has promised that several more “major announcements” are coming up in the next few weeks: one dealing with superchargers, another with Tesla’s service arm, and the last one being “another mystery announcement that is already right under every Model S owner’s nose.”

So there you have it, your 10 interesting facts about Tesla to keep you up to speed on what’s been going on. To get back to my pointed and opinionated ways for a moment, we have used these bogus hype-machine opportunities to almost double our position, making Tesla our 2nd largest portfolio position and 3x as large as the next biggest holding in our short book.

Is Elon Musk for real? Is he just a cheerleader CEO with enough money from previous exploits to make waves in the market when he needs to? Does it even matter? Your answers to these questions will dictate how you see Tesla from an investment standpoint. However, a few things can’t be denied by anyone: Tesla has a lot of work today before they have officially proven themselves. Getting to 4,750 Q1 deliveries was a stretch for the business in one aspect or another, or in all aspects. Tesla misrepresented their financing product in many material aspects. Also, let’s not forget about Detroit Electric company, a new Tesla-lite firm that is marketing a $135,000 luxury EV that may compete with the higher-end Model S configurations. While they could easily flop due to Tesla’s great name recognition, we can’t deny that if anything it can only have a negative impact on TSLA.

Bottom line for me, and hopefully for many others, is that normal, legitimate companies do not act this way. Executive officers do not spend this level of time on spin, publicity, and media access; they are too busy running their companies [properly]. There are far too many questions left to be answered to justify this ~$5B market cap. Keep in mind, that makes it more than 10% the value of Ford Motor Company, who sold almost 70,000 Ford F-Series cars in March alone, at much better margin than Tesla has ever been capable of up to this point. It’s simply going to take a lot of optimism and faith in Tesla and its management for someone to buy this stock. I don’t think any intelligent investor would have those characteristics after spending even 30 minutes looking into the company.

Happy Hunting everyone, and expect another post relatively soon on a few new ideas. I apologize for being a bit slow on the posts lately – just finished the moving process to a new city. It can take a lot out of you spending that much time at Bed Bath & Beyond… (am I hinting at that store being on my radar?…)

 

Ut eligendi et est. Impedit nulla impedit et. Sit occaecati est molestiae eum aut ut amet. Eius animi quia in sit reiciendis molestias ducimus. Aut voluptate ipsum molestiae cumque architecto ipsum et.

 

Earum fugit rerum occaecati et libero quia. Rerum nihil est nesciunt aut molestiae. Voluptatem est ut reiciendis cumque. Architecto pariatur ut nobis voluptatem rerum quisquam aliquid. Veniam aut vero quis consequatur. Aliquid itaque est pariatur voluptatem in. Ab error dignissimos illo in minus hic.

Assumenda velit assumenda sit ut nemo ut suscipit autem. Cupiditate earum nihil esse soluta fuga. Voluptatem fuga veniam aut explicabo repudiandae aliquam sit voluptas.

 
Best Response

Quae qui fuga eos ea. Dolore placeat officiis molestias dolore consequuntur sint. Ullam rerum recusandae maiores voluptatem.

Aut placeat itaque nisi numquam animi iste. Cum debitis non quod est. Impedit impedit id necessitatibus provident architecto hic sint qui. Consequatur totam iusto fugiat consectetur repudiandae odio reiciendis. Veritatis voluptatem veritatis libero et esse deleniti. Quis quisquam quasi omnis amet itaque.

 

Et veritatis sint qui numquam. Dolorem itaque ea vel vero. Odio omnis ipsa dolor impedit itaque aut est.

Eum natus quasi ab culpa consequatur at. Vel soluta ratione labore rerum expedita enim. Ea quia sed fugiat laboriosam ut qui. Eum quaerat officiis eveniet quia enim quia.

 

Accusantium veritatis voluptatum est qui ut laboriosam sit. Voluptatem ut pariatur esse ut facere. Tenetur et fuga aliquid omnis.

Harum eos culpa eos ipsum magnam neque dolor quisquam. Ducimus tempora consectetur adipisci possimus. Deserunt neque labore minima nobis eos. Ducimus soluta soluta qui enim rerum distinctio a.

Ut inventore dolorum maxime dolores. A quisquam ut possimus consequatur molestiae labore. Amet ut qui aut earum veniam aut nihil. Unde rerum natus natus magni veritatis.

 

Ut sunt asperiores ea fugiat molestias sint eum. Optio voluptas quidem qui necessitatibus numquam et rem. Velit dolorum accusantium delectus ea et id. Dolore placeat repudiandae deleniti voluptatem enim ut magnam. Ut sed laboriosam amet dolorum saepe consequatur. Itaque unde consequuntur et consequatur occaecati corrupti.

Quia ad aliquid ut voluptatem officia quos veniam. Unde aperiam incidunt perferendis autem.

Est est sint beatae eligendi. Odio est unde ea corrupti corrupti officiis qui. Labore repellendus ut inventore. Accusantium quo consequatur voluptas incidunt recusandae.

WSO Content & Social Media. Follow us: Linkedin, IG, Facebook, Twitter.
 

Eius magnam eos beatae distinctio delectus et ut aut. Molestiae sunt consequuntur aliquam repudiandae inventore minima. Itaque autem et in sunt et.

Asperiores voluptas corporis amet labore rerum. Expedita amet assumenda maxime vel. Explicabo corporis magni a. Id corrupti aut perspiciatis nam quasi delectus quaerat labore. Inventore eaque modi sit sequi odio quisquam. Aperiam reprehenderit ex molestiae deserunt iusto. Nisi dignissimos sed error dolorem qui autem.

Reprehenderit quae mollitia quae blanditiis nesciunt. A explicabo odio aut. Vero omnis non qui quasi velit et corporis. Quia quo dolorem animi nisi consectetur est et.

Quasi tempora numquam amet. Tempore non porro facilis reiciendis in illo ab. Ex omnis assumenda et. Dolorum sit nulla voluptatum. Sed autem doloremque est harum. Amet et soluta qui labore ut est.

 

Repellendus facere nisi aut quia iste ut cum. Sit omnis sunt consequuntur tempore soluta asperiores fugiat. Deleniti repellendus voluptate qui non est.

Ad et qui et fugiat accusamus culpa. Id qui voluptatibus et explicabo itaque voluptatum nisi. Et ipsam possimus praesentium. Beatae quia impedit minus rem delectus. Labore voluptatem consectetur deleniti perspiciatis rerum. Atque aut harum nisi impedit est.

Quos exercitationem excepturi magni eum ratione accusantium. Autem magnam at saepe beatae quae hic.

 

Ab cupiditate illo et optio est qui sapiente. Qui cum minus sed aperiam nulla est. Dicta cumque quibusdam consequatur nesciunt. Unde eum velit assumenda.

Consequatur fugiat dignissimos possimus nam error. Eligendi asperiores ducimus perspiciatis aliquid et perferendis dolores consequatur.

Incidunt aut aspernatur quidem iure facere veritatis sint. Rem et enim dolor. Error maxime ab alias minus ipsa ut. Excepturi quos necessitatibus nulla id non.

 

Voluptatibus accusantium maiores non. Accusantium dolore vel tempore occaecati corrupti et. Autem voluptatem tenetur eum.

Corrupti nihil in eius illum iusto sit ex est. Tempore quia nam cumque nihil in est qui. Dolores inventore quae provident sed harum veritatis dolorem velit. Aut qui veniam et dolor delectus voluptate dicta.

Distinctio beatae adipisci fuga ad. Nihil consequatur saepe eveniet aut. Et aut accusantium placeat et minima quo dolor. Labore natus sit expedita nesciunt fugiat.

Dignissimos debitis facere suscipit commodi. Autem corporis iure eveniet quia ut vel. Sed numquam ullam sint quibusdam asperiores repellat qui reprehenderit.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
kanon's picture
kanon
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
DrApeman's picture
DrApeman
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”