c*******r
发帖数: 870 | 1 这个值得好好看看！
https://citronresearch.com/citron-reverses-opinion-on-tesla/
Why be Long?
This is a critical quarter for Tesla and there are many reasons we want to
be long (and would certainly not want to be short) into this print:
• Tesla will, finally, after 10 years of unprofitable existence, have
the ability to prove that it can be a sustainable, highly cash flow
generative entity that is no longer reliant on the capital markets.
• A strong quarter removes the overhang of a necessary capital raise
– we suspect that Tesla will be generating more than enough cash to both
fund aggressive growth plans and build cash on the balance sheet.
• It transitions Tesla from a “proof of concept” story to a “TAM /
how much can this grow” story, attracting a whole new growth-oriented
investor base.
• It makes the bear case solely about Valuation and Demand.
• Short interest is at the same (high) level as five years ago though
risk is heavily skewed to the upside in the near-term.
Even if Tesla does not meet its profitability goals, it is well funded and
long-term shareholders will look towards:
• Secured an agreement to build a wholly owned Shanghai facility (Note
a Chinese company as its partner)
• The entrance of Model 3 in the European market
• New factory to be constructed in Europe
• Possible resolution to US / China trade war (and subsequent dropping
of 40% tariffs)
• Tesla semi truck production announced
• Tesla added to S&P (likely an April 2019 event)
• Model Y Unveil (March 2019)
• Q4 deliveries and earnings far in excess of consensus
• Potential analyst upgrades given significantly negatively skewed
consensus and positive Q3 performance
• The imminent release of the Tesla 9.0 autonomous software
Most importantly (as our readers' Twitter feeds show) we believe Musk is
focused on a Tesla stock price above $360, which would remove significant
amounts of convertible debt (strike price $330-$360) and leave the Company
with a very manageable debt load comprised of $2B of senior notes.
Shorts vs Longs
While the media parades around short sellers (yes, Citron has been one of
them) attempting to make a piñata out of Tesla and Musk, the media
rhetoric has been turbo charged to now include comparisons to Lehman
Brothers and Enron, to mechanics liens implying that Tesla can't pay its
bills.
The rhetoric doesn't seem to phase Tesla’s long-term shareholders who
evidently see lots of value here. Besides Musk, T Rowe Price, Fidelity (who
owns it in multiple funds) and Baillie Gifford are Tesla’s largest
shareholders.
T Rowe Price has an estimated cost basis of $290 and just bought more than 5
.5 million shares last quarter.
Without much hoopla or television appearances, Ballie Gifford simply
commented on the potential 420 takeout:
“Speaking to the Times, Anderson said that while he accepted Tesla's
prospects were uncertain, its value was much higher than $420 a share,
probability-adjusted”
https://citywire.co.uk/wealth-manager/news/baillie-giffords-anderson-
questions-musks-tesla-valuation/a1145252
While it might be easy to dismiss quiet shareholders as weak, Citron has
learned from our mistakes and sought to see what these shareholders find
attractive- and we have.
To address a few of the concerns that are common to Tesla skeptics:
• There is NO Tesla killer. Competition is nowhere to be found and no
electric vehicle is slated to launch at the Model 3 price point until 2021.
• We’ve reviewed the mechanics lien documents and they are tiny (i.e.
, $7.5M in aggregate) with none being “critical” suppliers by any stretch.
Nothing for a company that will do over $20 billion in revenues this year.
• Employee turnover- Yes, Elon is very difficult to work for to a
fault, but that does not change the customer appetite for the product.
• Bad Manufacturing Process- Yes, much of Tesla was learned by trial
and error and Elon should have listened to others. Again, that is in the
past.
• From a technology standpoint, Tesla is light years ahead of the
competition. No OEM is even close to having Tesla’s level of connectivity
and “upgradeability” in its cars.
Tesla is dominating the industry with no advertising, no unions, no dealer
network. It has 1,100 charging stations and a Gigafactory. It also has a
mobile repair service (“Rangers”). The Company has concluded that 80%+ of
repairs can be carried out at the owner’s house and are building out a
fleet of technicians who can fix car issues without the owner having to take
it to a service center.
Tesla has the most miles driven data by several orders of magnitude. Tesla
has over 8 billion miles driven as every vehicle even if autopilot is not
enabled operates in “shadow mode” (i.e. feeds data back to Tesla’s
central compute) and is accumulating data at a rate of billions per year (
which will only grow as more Model 3s are produced).
Tesla's vision for the future of mobility is for consumers to be able to
push a button on their phone, enabling their car to autonomously join the
Tesla shared mobility fleet. In other words, when a consumer is not using
their car, they can "rent" their car out (like Uber) to other consumers.
Tesla will take a cut of the profits and the consumer will keep the rest.
Citron is not a believer in the shared mobility- but we have been proven
wrong in the past.
To anyone who thinks Tesla has fallen behind in technology, here is our
favorite anecdote:
Consumer Reports ran a test on a Model 3 where they determined that the
braking distance was sub-par for its vehicle class. Tesla was able to
diagnose the issue that weekend (algorithmic braking control miscalibration)
and issue an over-the-air update to all Tesla vehicles that weekend,
sharply improving braking distances virtually overnight. Consumer Reports
remarked that this was the first time this has ever been accomplished in the
auto space (an OTA update improving a car) and changed their recommendation
to positive on the Model 3.
No tequila, flamethrowers, or short shorts- just a revolution in the
transportation industry.
Profitability – Where the rubber meets the road.
Those who own TSLA stock believe the company can one day achieve over 30%
gross margin. Those estimates are not from the wild mouth of CEO Musk,
rather, they are from Munro Associates, a leading automotive consulting firm.
Munro began a tear-down of a Model 3 in April of 2018 and concluded that the
Model 3 could generate over a 30% profit margin.
https://electrek.co/2018/07/16/tesla-model-3-teardown-profitability/
When Munro began tearing down the Tesla in April, it released comments
saying that the vehicle was horrific, reminiscent of the build quality of a
Kia from the 1990s. However, in a stunning turnaround, Munro completed its
tear down and cost analysis in July and ultimately admitted that the final
results of its Model 3 analysis were not at all what was expected.
Poking fun at his initial reaction, Munro stated “a lot of crow (was) being
eaten around here.” “The Model 3 is profitable. I didn’t think it was
gonna happen this way, but the Model 3 is profitable. Over 30%. No electric
car is getting 30% net, nobody,”
Where can $TSLA trade?
Below is a sensitivity analysis of Tesla’s implied share price based on
assumptions around auto deliveries and gross margin. At this point, demand
is not a question. If Musk can deliver on supply and the demand stays intact
plus the additional demand of international expansion, the upside in the
stock is tremendous. Given that Tesla still has significant growth
opportunities left in compact, crossover, and pickup, we don't see demand
slowing.
Take the worst case in the below sensitivity analysis and we see 500k cars
with 20% gross margins at a P/E of 20x and the stock is $599.
A Note to Our Critics
We know this note is going to have many critics, most being our fellow short
sellers who might categorize us as opportunist. To anyone who challenges
the integrity of Citron or our constant monitoring of the Tesla story all
you have to do is look at the class action lawsuit recently filed against
Tesla. In it you will see the principal of Citron was actively trading tens
of millions of dollars of Tesla and the infamous "$420" tweet resulted in a
loss of almost $2 million. By no means does Citron only trade on publishing
stories. We actively manage a book that has been trading Tesla for five
years.
Yes, we are still suing Musk and Tesla and this recent report has no bearing
on the current lawsuit.
Conclusion
As of the writing of this report, Tesla has just announced it has moved up
its earnings release date to October 24. The last time TSLA reported Q3
earnings in October was in 2016 – when revenue beat the consensus by 21%.
Does anybody think that Tesla decided to move up its earnings release date
because of bad news?
Sometimes the truth is stranger than fiction. While we may not be fans of
the overconfident CEO, we cannot dismiss what we are seeing in the
marketplace.
Cautious Investing to All | m******c
发帖数: 1202 | | i********g
发帖数: 479 | 3 你妈空翻多，剩下的空头这下惨了。明天看来的加仓。 |
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