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Gary Black

@garyblack00

Nov 9

@elonmusk

Let’s give @elonmusk a break. No one should have believed the argument that he wouldn’t sell $TSLA shares again; my view (repeated frequently) was that he meant he was done selling for that 3-day tranche in Aug and that he still had some $5.4B to raise if the deal went through.

2/ The pattern of Elon’s selling the past three days fits April and August: biggest piece on the first day; smallest piece on the last day. I think he’s likely done selling for now. But don’t expect him to give that assurance because many here misinterpret his assurances.

3/ Does $TWTR need cash now? No.

As of 6/30, TWTR had $6.1B cash and $6.7B debt. YTD thru 6/30 TWTR had:
- Adv Revs $2.2B
- Subscription fees $0.2B
- Costs and OpExp $2.8B
- EBITDA $111M (2Q)
- CapExp -$320M

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Gary Black

@garyblack00

Nov 5

@elonmusk

Before I went to WS, I was a product manager for J&J and before that with Kraft General Foods. Like PMs, advertisers hate noise, and they hate change. They won’t spend their ad budgets on $TWTR until it becomes clear how the changes @elonmusk and team are making impact ad $ ROI.

Several high profile advertisers have stopped spending on $TWTR. Others will follow - not just because of concern about perceived product adjacency, but because of the uncertainty created by turnover and the change in focus toward user fees, which may or may not impact ad $ ROI.

Let’s not confuse $TWTR customers and users. TWTR’s customers are overwhelmingly national advertisers, who paid $2.2B thru 6/30 YTD vs $195M user fees. Elon is trying to change the model but in the meantime, ad $ pay the bills and particularly the $1B/year int bill on $13B debt.

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Gary Black

@garyblack00

Oct 24

@elonmusk

IMO, @elonmusk likely selling TSLA shares today.
1/ China price cuts were expected (came a week early)
2/ WS hasn’t cut 4Q or FY’22 ests (I estimate $+.05/share 4Q eps accretion)
3/ China price cuts have not generally impacted TSLA price before (three in the past two years).

@Holgerdanske9

Debate is how long after $TSLA files 10-Q does TSLA trading window lift (it appears 24 hours after 10Q filed)? If filed on Fri night b/t 530-10pm it would be stamped Mon am by SEC, but technically TSLA trading window could reopen 24 hours after the “filing time.” @Holgerdanske9

$TSLA has responded to me the trading policy shown above is “not our trading policy.” It is “an old disclosure connected with a cap raise.”

My conclusion: Today’s -1.9% decline could reflect Elon selling. The China price cut is actually accretive to 2022 EPS.

Read 4 tweets

Gary Black

@garyblack00

Oct 20

$TSLA sellers missing the big picture. Elon trying to raise more equity for TWTR deal so that he doesn’t have to sell TSLA shares at such depressed levels. Even if he can’t, a $5B sale is just 1% float. Once $TWTR deal closes next week, TSLA should recover as TWTR overhang lifts.

Three most positive comments from yesterday’s call:
- Zach projecting that FY’2022 delivery growth should be “just under 50%.”
- Zach’s comment that ex-reg credits and ex-Austin/Berlin, auto gross margin would have been nearly 30%.”

- Elon’s comment that the new $30K compact was now “the primary focus of our new vehicle development team” and “could certainly exceed production of all other vehicles combined.”

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Gary Black

@garyblack00

Oct 20

$TSLA conf call:
- Zach guided to “just under 50%”deliv growth for FY’22 - implies 4Q delivs ~450K+
- Elon: 4Q delivs “epic”
- Elon said $5B-$10B buyback likely in 2023
- Auto GM% probably weak due to ramp of Berlin/Austin
- M-$30K vols will be bigger than all models combined

2/ No reason to have X umbrella structure for all Elon bizs
- FSD release by end of FY’22 but wouldn’t commit to L4/L5 or timeline for reg approval
- 4680 ramp 300% QoQ and tracking at 1K cars/week
- Elon thinks $TSLA market cap could exceed $AAPL/Aramco combined ($4T).

3/ $TSLA -5% AH but mgmt very confident about 4Q delivs

WS FY’22 EPS $4.32 could fall 2-3% tomorrow - 4Q vols up/GM % down.

With no talk on CC about whether Elon has to sell more TSLA shares, $TWTR overhang persists.

OTOH, $TSLA very washed out past 3 wks (-22% vs -3% NDX)

Read 4 tweets

Gary Black

@garyblack00

Oct 19

$TSLA beat slightly on Adj EPS ($1.05 vs $1.02 WS and vs my $1.09), but missed on auto gross margin ex-RC (26.8% vs 27.7% WS). While they guided to 50% avg multi-year delivery growth, they didn’t speak to 4Q delivery growth. No buyback in release. Conf call 530 ET.

2/ $TSLA missed on Revs $21.5B vs $22.0B WS. $1.05 Adj EPS beat the $1.02 Adj EPS est because of low tax rate (8.3% vs my 15.0% est) and by leveraging SGA ($961M flat vs 3Q; I exp a +25% incr). Reg credits were light ($286M vs my $300M est). Shorts will argue low quality beat.

3/ Positives: 1) $3.3B free cash flow after all capexp; 2) $21.1B cash at qtr end and no debt; 3) Operating margin 17.2% vs 14.6% in 2Q; 4) Energy profits $104M vs my $60M est. 5) Very low FD share expansion between 2Q and 3Q

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