Bob Wilson
Another approach, ARK, to investing
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Bob Wilson
David Green
Well-Known Member
Haha! Cathie Wood... She likes to dream. As for Tesla's valuation I would consider JB Staubel to be in a pretty good position to evaluate the company being the lone time CTO, and the person most Consider to be the 2nd most valuable person to Tesla after Elon Himself. Well JB does not like the valuation this year as he has been selling TSLA stock as fast as he gets it. He has sold this year at $290, $270, and last week some a bunch more shares around $230. For a Tesla bull like Bob, how can you explain this, this guy is a very high ranking insider with a C level title, knows Tesla from the beginning, knows their technology, but yet has sold a big chunk of ihis holding at lower than optimal prices this year? And don't say it's because he needs money, as he can easily borrow against his shares if he thinks TSLA valuation will go up faster than the interest he pays on the loans. So Cathie Wood, the bull and JB Straubel the bear?
https://ir.tesla.com/static-files/09f26e9f-ac3e-4909-adf1-0d60f5cce5d1
Domenick
Well-Known Member
Someone's been spending too much time on Twitter.
I don't know why JB is taking advantage of options at the moment. Maybe Tesla is going bankrupt, or maybe he's got another project he was cash for and doesn't want to borrow. ¯\_(ツ)_/¯ I just liked the way Cathie defended her position.
It's similar to the position taken by Chamath Palihapitiya. He was very long-term bullish in an interview on CNBC, which I'd love to share here, but for some reason, they edited out the five minutes of him talking about Tesla from the rest of this interview.
interestedinEV
Well-Known Member
This a more generic statement, based on insider selling shares. Insiders, generally have to declare the intent to sell shares and the reason. Now, even if they know something is wrong, they are going to camouflage their sale in a different way. They are going to claim it is based on diversification or something suggested by their financial advisor, or it could be to buy other investments or to pay of loans or to be a part of their tax planing strategy for inheritance etc. etc. In other words, they would not disclose the true intent, if indeed there is a real problem. Yes, there have been cases like Martha Stewart who have gone down for insider trading, but they are few and far between. It is difficult to prove these cases.
I have no idea on what JB Stabulel's real intent is on selling these shares. There may be a genuine reason for the sale, which has nothing to do with Tesla's finances or prospects. If it is nefarious, be prepared for an explanation that provides plausible deniability.
David Green
Well-Known Member
Incorrect on several fronts. Executive level insiders in most companies have guidelines on their stock sales, but Tesla does not have written rules for this. Boeing for one example only alows executives to sell a couple times a year in publicly announced windows. JB would not be selling stock if he did not sense trouble (IMO), he has sold about 15% of his holdings this year mostly under $300, seems like he is hedging. Go through the Tesla SEC filings and you find many of the executives and directors (form 4 filers) have been unloading since January, and now several board members are leaving the company. There is trouble in paradise, and April USA sales sucked again (shorts nailed InsideEV's estimates, but the shorts were out with the info 2 days ago). The news page has become old news for anyone that follows the company closely.
interestedinEV
Well-Known Member
Let us deal one by one. I only said that if officers sell shares, even if it is based on knowledge that things are bad, they will give themselves plausible deniability. Very few people are prosecuted successful for insider trading. I am not sure why you believe that is incorrect.
I looked at the insider trading for Tesla and yes there is a lot of activity. What Jeffery Straubel seems to be doing is exercising his options and then selling it right away at great profit. So he has still about 306,398 shares. But he has made a lot of money. He seems to be exercising his options, like the last one he bought 15,000 shares at $31.49 and sold them at $232.008. That is about 3 million this month, a lot more last month and a lot more the month before. A lot of the insider selling is based on exercising options. Now one could argue, why sell if they think the company is doing great? They would have a different explanation. Strauble could argue he still has about 300,000 shares and the reason he is selling is to diversify his holdings or something like that. Again, I agree with you it is a cause of concern, but it is going to be difficult to prove nefarious insider trading.
https://www.nasdaq.com/symbol/tsla/insider-trades?page=1
David Green
Well-Known Member
I am not sure you understand how rich people handle their money / investments. Rich people are always leveraged (this how you get richer), if JB needed money he could just pledge more of his shares than he already has, and get loans typically between 2-4% interest depending on the ratio of leverage and loan covenants. I am not accusing JB of using his insider info to sell in an illegal way, I am just saying if the top insiders are selling, in general, it's not a good time to buy, and that is true for most any company. Enron Execs and board members were selling before the collapse, but telling the employees (sheep) to hold, and buy. It's easy to envision a tesla collapse without some infusion of cash soon. Q1 was terrible, and we found out after the 10Q was released it was $216 million worse in operations than we thought because Tesla forgot to mention they sold a ton of emission credits as the quarter was winding down. Interesting that they forgot to mention that in the earnings release letter, and no mention on the conference call, but it showed up in the 10Q... Shady!! Investors are losing patience with Tesla management, specifically Elon Musk, too many lies, and false guidance. If they miss the 90K Q2 deliveries I think the stock will take it on the chin again, as some of the big institutional investors back away. I feel bad for dear Bob here, I tried to warn him, but he insisted in dancing with the devil. As an engineer he should have known the old rule, the Math always wins in the end.
Interesting that you looked at Tesla form 4 filers data, how many of them have been making outright stock purchases while it is down.... Is it Zero? I have not looked that close for a while, been too busy...
David Green
Well-Known Member
I guess I was right on Target, announcing capital raise of 2.3B today... I would love to hear Elon explain how we went from his "tesla will be self funded from this day forward" statement 6 months ago, to now needing another 2.3 of investor cash and further diluting existing equity holders, who have already suffered brutal dilution the last 5 years. I cannot wait to see the yield on the debt offering, haha! Talk about high interest loans. Haha! Raising $$ delays the inevitable, but the math will still win in the long term.
David Green
Well-Known Member
Cathie Wood's first problem is she seems to believe what Elon Musk tells her without the slightest bit of due diligence. Elon rarely hits his targets, and even when he does it is only at tremendous investor loses, and absolute chaos inside the company. They recently raised 2.7B which kicks the can down the road for another year or so, Tesla can finally catch up on their bills, and maybe catch up on their CapEx guidance which in Q1 2019 they fell behind by 50%. Wall Street has finally wisened up though, they have put TSLA on a prove it deal, prove profits going forward and FSD, otherwise the stock is relegated to an also ran, and the unfortunate investors like Bob lose a big portion of their capital. It's sad that so many descent people will be lost in this whirlpool.
My expectation:
Bob Wilson
- July 2 - preliminary Q2 production numbers
- Aug 1 - Q2 quarterly financial numbers
Bob Wilson
David Green
Well-Known Member
Bob, do you think the Q2 2019 numbers are going to be some miracle? My guess is production and deliveries will be slightly better than Q1 2019, but the losses will once again be staggering and Revenue will be much lower than the the levels seen at the back half of last year. Your guy Elon guided profit in all qtrs going forward just 4 months ago, and then lost a staggering 700M in the last Qtr (Q1 2019) they reported, and Tesla forgot to mention it would have been 200M worse of not for the sale of regulatory credits. Tesla also repaid 900M of debt in Q1 only to re-issue more debt in Q2, so the net is backwards on the balance sheet in 2019. Another thing to look at, have you taken a look at the dilution just since you have owned Tesla stock? Between the employee stock awards, and new share sales to buy Maxwell, a trucking company, and the capital raise, to get back to even for you requires a heck of a lot more capital inflow than the outflow that pushed your value down.
On sales for Q2 I have been following the European market, and specifically Norway, Netherlands and Spain, and Model S and X sales are getting hammered by I-Pace and E-Tron in Q2, to date it is about 7 to 1 in favor of I-Pace and E-Tron over Tesla S and X. It is looking more and more like Model S and X sales will take up to a 50% hit in 2019, and Model 3 sales are struggling to hit the levels seen in Q3 and Q4 last year, even though they have opened sales in many new markets incl Europe, China, and now they are producing RHD models to open more new markets. Still sales are well below Fremont's production capacity, which BTW is still over 50% below the capacity Elon guided for last year. Wall street has finally seen enough signs to give up on Tesla, even some former Tesla bulls have seen the light and realize this is a very poorly managed company that bleeds talent as fast as cash. Maybe now that Elon has taken charge of toilet paper purchasing things will turn around? You think? Oh no, Watch Out Below...
I expect them to be objective facts and data. They are now seven weeks away.
Bob Wilson