It wasn't the stupidest thing they went along with - that would be the SolarCity merger. But many don't seem to realize that Tesla can increase its market cap by issuing new shares while the stock price stays the same or drops. Retail holders lose out, Musk wins. Although it may be a moot issue anyway, given the precarious cash position of Tesla. I'd warn current stock holders that the price drop last week was just the beginning, but if people have been holding on this long I'm afraid they're going to ride this thing all the way down regardless.
To the question of who's fault it is and should pay for replacement, Bosch made the bolt but was it to Tesla's spec?
And isn't it so fortunate Tesla has plenty of service center capacity to handle the recall?
Q4 2017 cash-on-hand: $3,4B
Yep, sure looks like a company on the fast route to bankruptcy.
Do you know why they were able to show that much cash on hand? For all the supposed smarts on this site, no one seems to be able to read a quarterly result, much less a 10K.
Tesla currently has $2.3B in accounts receivable. That's what they owed their suppliers at the end of 2017. There's a reason why one of the first things Musk said on the 4Q conference call was a big thanks to the patience of their suppliers. They also blew out their entire stale inventory of Model S and Model X at a huge discount to help show less cash burn. And they horded all their ZEV credits to be used for 4Q. These are one time events to make things look better than they are. They are at a negative $1.1B of working capital. 1Q results are going to be even worse. Did you check out the 10K that was released Friday? Look at the section on risks. Some read like they belong on The Onion. Their financials are a disaster.
the fact that Model S and X demand exceeds Panasonic's ability to supply cells...
Panasonic has no problem keeping up with cell demand and Tesla is on the hook to buy more cells than they need. Look at the cell costs in the 10K and extrapolate how many cars they need to build to use them all.
Model S and Model X demand has plateaued and dropped over the last year. Look at the seasonally adjusted sale numbers. They would have dropped even more drastically without massive discounting involved. Did you even listen to the 4Q conference call? Tesla management said they are reducing production of the Model S and Model X to a total of 100K a year because of demand.
No no no, clearly, they'll run out of cash any day now, just like we've been hearing nonstop for the past decade.
They're going to need a massive cash infusion in Q2. If they can get it it'll probably be a very dilutive equity issue. The bond market is closed off to them(see below).
And clearly the bond market has no interest in them! It's not like as though they sold half a billion dollars of bonds a month ago, mostly at a.3% premium to the benchmark swap rate, with the highest possible credit rating, with initial investor orders as much as 14x what the company intended to sell. No no, clearly bankrupt! Tomorrow, maybe the day after, surely!
Those were auto lease bonds based off the income of their Model S and Model X leases. They gave up future cash flow from those leases to keep the company afloat. A desperate move.
The $1.8B junk bond issue last August started trading underwater almost immediately and still is. The initial bond buyers got screwed.
Tesla should have never offered free charging to Model S and Model X owners and instead have charged for their use in the beginning. Now they're stuck with paying electricity costs for these vehicles.
"A new “workplace charging” program unveiled today offers businesses free Tesla wall connectors and will also cover installation, provided they meet certain qualifications set forth by the California carmaker. Tesla won’t cover the cost of operating the charging stations, and the company says there could be other permitting, construction, zoning, or labor costs."
I wonder what Tesla owns after install. The Supercharger network will be one of the few assets another company will buy when Tesla goes into bankruptcy reorg.
Tesla delivered only 1,550 Model 3 vehicles in the Q4, lower than the lowest "analyst" guidance. But as they say, "Hope springs eternal". http://www.latimes.com/busines... [latimes.com]
For some reason, Musk seems to incite a lot of rage among the "It'll Never Work" crew. When you're 40 years old and mom is still paying the internet bill, seeing somebody who has literally changed the world do well must hurt.
No rage, just calling out a fraud and carnival barker when I see one. For reference: https://twitter.com/elonmusk/s...
It's impossible to keep up with all of his broken promises, but once people are indoctrinated into a cult it's hard to get them to see reason which is right in front of them. Though I'm a bit disappointed, figuring/. readers were more sophisticated.
Hey Elon,
how about an on that completely autonomous coast-to-coast drive you promised by the end of the year? You have less than a month to go! Then again, maybe you should stick to the hat business. Probably the only one you've ever made a profit on.
The effective yield on TSLA bonds is 5.5%, this is nowhere near any sort of panic level. And "wiping out their yield" doesn't make sense either- the yield is the yield and based on what you purchased the bond for. If you are saying that the bonds lost 5% of their value according to their resale price, that is still only one years worth of yield, but otherwise this is just a blip in the market for buy and hold purchasers of bonds.
In less than 3 months the loss of principal on TSLA's unsecured bonds have wiped out a year's worth of yield. I would not be happy if I was a holder. http://finra-markets.morningst...
Many companies spend more money than they make starting out and reinvest more money than they make as they ramp up operations. That's pretty typical (take a good look at Amazon).
The Amazon comparison again... Amazon had free cash flow early on and put it back into the company. In their entire public existence, Amazon went to the capital markets just once. Tesla constantly needs other people's money just to keep the lights on.
Their junk bond offering of just 3 months ago is now trading at 95 cents on the dollar, effectively wiping out their yield. The only way Tesla is going to get the cash to keep going is a massively diluting equity raise.
Every company loses money on 'every unit sold' until the point that they've paid back the R & D. That is true for literally every product ever made. When the R&D is especially capital-intensive (like a new car or rocket) then it takes longer. Pretty much every time this happens some moron looks at the shareholder report and says "Company X is losing $Y on every unit!!! They should stop making units!!!".
Musk said 2 years ago Tesla would be cash flow positive and not need another capital raise. It's been several raises later and yet another one is just around the corner.
BTW, the Chief Accounting Officer at Tesla just dumped a block of shares: http://secfilings.nasdaq.com/f...
You sure you want to be one left holding the bag?
The stated reason for the acquisition was "synergy" of sales, Powerwalls, solar panels and electric cars.
For instance, the "fake solar tiles" are actually in production and being installed on houses for customers with electric cars and Powerwall batteries.
I should have been more clear. The tile Musk was holding during his presentation was fake. I don't doubt there are tiles being installed on select houses for PR purposes. But the solar tile was already tried and abandoned by other companies who are much better at it(e.g. Dow). It's easy to be sold out for years when barely any are being made with no real plans to increase production - check out the status of the Riverbend factory in NY.
Not saying he didn't, but if you are trying to save a faltering company, culling the workforce of non vital positions and underperforming employees is a start.
Yes, but Tesla is being dishonest calling it a firing instead of layoffs. But then, being disingenuous is par for the course with Tesla.
Q3 results are going to be a blood bath. Musk needs to point to cost cutting measures to try to keep the stock price up before him and other key execs can cash out, leaving what will be a smoking ruin where Tesla stood.
because I'm going to wait a couple years and then stalk you through every thread, and replay those words back to you.
How mature; comes out in your investment decisions.
Congratulations on learning nothing from: "No wifi, less space than a Nomad, Lame".
When has Apple lost money on every unit it sold?
There's a big difference between not turning a profit because noone wants to buy your crap and not turning a profit because you can't manufacture products fast enough to keep up with demand and every $ of revenue is reinvested into expanding capacity.
So many people want the Model S and Model X that Tesla had to offer massive discounts last quarter just to keep sales flat.
r and every $ of revenue is reinvested into expanding capacity.
Tesla needs capital raises just to keep the lights on. They have negative cash flow. The comparisons to Amazon are flawed.
You can't make a product fail by hating the company's CEO.
There are financial reasons to stay away from Tesla as an investor, besides the fact they have PT Barnum for a CEO.
SolarCity was well on its way to bankruptcy. The only reason Musk bought SolarCity was to save his cousins and the SolarCity bonds he owned - at the expense of Tesla shareholders. And all it took was a lame presentation showing fake solar tiles to convince them.
But we both know that you don't really *believe* that Tesla is going to fail, you just really, really want them to.
Yes, I do. Just calling it as I would a terminally ill patient. Some company will pick up the pieces after the reorg and the Tesla name will probably continue, and hopefully Tesla car owners will still have a company that'll service them and perhaps build newer models in a profitable manner.
Economies of scale didn't help Tesla make a profit selling the much more expensive Model S or X, even before they had to institute massive discounts to move metal.
Tesla is circling the train? Oh...yeah...ok. Let me buy that tesla stock from you then since it's practically worthless anyhow. Take $10 a share?
The only argument I hear to Tesla being successful is its stock price. People said that about Enron, Valeant Pharmaceuticals, and many dot.com stocks back in 2000.
Model 3 shipment numbers are about one month behind targets.
http://www.businessinsider.com...
"The company plans to produce 1,500 Model 3 sedans in September and grow that to 20,000 vehicles a month by December."
A total of 220 have been delivered. All have been returned to the factory for replacement parts because the car is still being developed and tested! There won't be 1500 total deliveries by September, much less in September alone, and there sure won't be 20K by December.
A $1000 refundable deposit to hold a spot in line is not an order. A fraction of those will turn into actual orders. What was the last number of deposits that Musk gave out? 457,000? Given Musk's propensity to fudge numbers, do you really even believe that number was accurate at the time? What do you think the continuing Model 3 delay will do to that number?
Which may all be a moot issue, since Tesla has yet to show they can even make a car at a profit. Tesla can't figure out how to make money at $100K - $150K a car, what makes you think they can do it selling a car at $35K - $60K?
And yet, their stock trades at $345.10 a share [google.com], and their market cap is $57.59 billion [google.com].
That their stock price is ridiculously over valued is the best investment thesis you have?
Another company that doesn't make a profit: Amazon [forbes.com]. Shorting them too? Good luck with that.
Amazon has almost always had positive cash flow to fund their operations and growth. They had to go the capital markets just once many years ago. Tesla has to continually go the capital markets just to keep the lights on. https://imgur.com/a/IKilJ
And their cash burn is still increasing - Q3 results will be the worse yet. Once they run out of OPM they are toast.
TTAC called, they want you for their Tesla Deathwatch column nearly a decade ago.
If any of you knew how to read a 10K and actually looked into Tesla's finances, you'd realize that given their latest junk bond offering and negative cash flow, they are incapable of ever making a profit. It's losses all the way folks, until the inevitable reorg.
Slashdot Mirror
"Tesla shareholders are just plain stupid."
It wasn't the stupidest thing they went along with - that would be the SolarCity merger. But many don't seem to realize that Tesla can increase its market cap by issuing new shares while the stock price stays the same or drops. Retail holders lose out, Musk wins. Although it may be a moot issue anyway, given the precarious cash position of Tesla. I'd warn current stock holders that the price drop last week was just the beginning, but if people have been holding on this long I'm afraid they're going to ride this thing all the way down regardless.
Because there is no competition to the Model 3. Plain and simple.
There is no $35K Model 3. Plain and simple.
To the question of who's fault it is and should pay for replacement, Bosch made the bolt but was it to Tesla's spec? And isn't it so fortunate Tesla has plenty of service center capacity to handle the recall?
Oops, I did mix up AP with AR. Have you heard? Tesla's CAO just left: https://seekingalpha.com/filin... If you own the stock, get out while you can.
Q4 2017 cash-on-hand: $3,4B Yep, sure looks like a company on the fast route to bankruptcy.
Do you know why they were able to show that much cash on hand? For all the supposed smarts on this site, no one seems to be able to read a quarterly result, much less a 10K. Tesla currently has $2.3B in accounts receivable. That's what they owed their suppliers at the end of 2017. There's a reason why one of the first things Musk said on the 4Q conference call was a big thanks to the patience of their suppliers. They also blew out their entire stale inventory of Model S and Model X at a huge discount to help show less cash burn. And they horded all their ZEV credits to be used for 4Q. These are one time events to make things look better than they are. They are at a negative $1.1B of working capital. 1Q results are going to be even worse. Did you check out the 10K that was released Friday? Look at the section on risks. Some read like they belong on The Onion. Their financials are a disaster.
the fact that Model S and X demand exceeds Panasonic's ability to supply cells...
Panasonic has no problem keeping up with cell demand and Tesla is on the hook to buy more cells than they need. Look at the cell costs in the 10K and extrapolate how many cars they need to build to use them all. Model S and Model X demand has plateaued and dropped over the last year. Look at the seasonally adjusted sale numbers. They would have dropped even more drastically without massive discounting involved. Did you even listen to the 4Q conference call? Tesla management said they are reducing production of the Model S and Model X to a total of 100K a year because of demand.
No no no, clearly, they'll run out of cash any day now, just like we've been hearing nonstop for the past decade.
They're going to need a massive cash infusion in Q2. If they can get it it'll probably be a very dilutive equity issue. The bond market is closed off to them(see below).
And clearly the bond market has no interest in them! It's not like as though they sold half a billion dollars of bonds a month ago, mostly at a .3% premium to the benchmark swap rate, with the highest possible credit rating, with initial investor orders as much as 14x what the company intended to sell. No no, clearly bankrupt! Tomorrow, maybe the day after, surely!
Those were auto lease bonds based off the income of their Model S and Model X leases. They gave up future cash flow from those leases to keep the company afloat. A desperate move. The $1.8B junk bond issue last August started trading underwater almost immediately and still is. The initial bond buyers got screwed.
Tesla should have never offered free charging to Model S and Model X owners and instead have charged for their use in the beginning. Now they're stuck with paying electricity costs for these vehicles. "A new “workplace charging” program unveiled today offers businesses free Tesla wall connectors and will also cover installation, provided they meet certain qualifications set forth by the California carmaker. Tesla won’t cover the cost of operating the charging stations, and the company says there could be other permitting, construction, zoning, or labor costs." I wonder what Tesla owns after install. The Supercharger network will be one of the few assets another company will buy when Tesla goes into bankruptcy reorg.
Tesla delivered only 1,550 Model 3 vehicles in the Q4, lower than the lowest "analyst" guidance. But as they say, "Hope springs eternal". http://www.latimes.com/busines... [latimes.com]
The people who made money were the ones who sold the equipment, not the ones looking for gold.
For some reason, Musk seems to incite a lot of rage among the "It'll Never Work" crew. When you're 40 years old and mom is still paying the internet bill, seeing somebody who has literally changed the world do well must hurt.
No rage, just calling out a fraud and carnival barker when I see one. For reference: https://twitter.com/elonmusk/s... It's impossible to keep up with all of his broken promises, but once people are indoctrinated into a cult it's hard to get them to see reason which is right in front of them. Though I'm a bit disappointed, figuring /. readers were more sophisticated.
Hey Elon, how about an on that completely autonomous coast-to-coast drive you promised by the end of the year? You have less than a month to go! Then again, maybe you should stick to the hat business. Probably the only one you've ever made a profit on.
The effective yield on TSLA bonds is 5.5%, this is nowhere near any sort of panic level. And "wiping out their yield" doesn't make sense either- the yield is the yield and based on what you purchased the bond for. If you are saying that the bonds lost 5% of their value according to their resale price, that is still only one years worth of yield, but otherwise this is just a blip in the market for buy and hold purchasers of bonds.
In less than 3 months the loss of principal on TSLA's unsecured bonds have wiped out a year's worth of yield. I would not be happy if I was a holder. http://finra-markets.morningst...
Many companies spend more money than they make starting out and reinvest more money than they make as they ramp up operations. That's pretty typical (take a good look at Amazon).
The Amazon comparison again... Amazon had free cash flow early on and put it back into the company. In their entire public existence, Amazon went to the capital markets just once. Tesla constantly needs other people's money just to keep the lights on.
Tesla != Amazon
Their junk bond offering of just 3 months ago is now trading at 95 cents on the dollar, effectively wiping out their yield. The only way Tesla is going to get the cash to keep going is a massively diluting equity raise.
Longs, get out while you can.
Every company loses money on 'every unit sold' until the point that they've paid back the R & D. That is true for literally every product ever made. When the R&D is especially capital-intensive (like a new car or rocket) then it takes longer. Pretty much every time this happens some moron looks at the shareholder report and says "Company X is losing $Y on every unit!!! They should stop making units!!!".
Musk said 2 years ago Tesla would be cash flow positive and not need another capital raise. It's been several raises later and yet another one is just around the corner. BTW, the Chief Accounting Officer at Tesla just dumped a block of shares: http://secfilings.nasdaq.com/f... You sure you want to be one left holding the bag?
The stated reason for the acquisition was "synergy" of sales, Powerwalls, solar panels and electric cars. For instance, the "fake solar tiles" are actually in production and being installed on houses for customers with electric cars and Powerwall batteries.
I should have been more clear. The tile Musk was holding during his presentation was fake. I don't doubt there are tiles being installed on select houses for PR purposes. But the solar tile was already tried and abandoned by other companies who are much better at it(e.g. Dow). It's easy to be sold out for years when barely any are being made with no real plans to increase production - check out the status of the Riverbend factory in NY.
Not saying he didn't, but if you are trying to save a faltering company, culling the workforce of non vital positions and underperforming employees is a start.
Yes, but Tesla is being dishonest calling it a firing instead of layoffs. But then, being disingenuous is par for the course with Tesla. Q3 results are going to be a blood bath. Musk needs to point to cost cutting measures to try to keep the stock price up before him and other key execs can cash out, leaving what will be a smoking ruin where Tesla stood.
because I'm going to wait a couple years and then stalk you through every thread, and replay those words back to you.
How mature; comes out in your investment decisions.
Congratulations on learning nothing from: "No wifi, less space than a Nomad, Lame".
When has Apple lost money on every unit it sold?
There's a big difference between not turning a profit because noone wants to buy your crap and not turning a profit because you can't manufacture products fast enough to keep up with demand and every $ of revenue is reinvested into expanding capacity.
So many people want the Model S and Model X that Tesla had to offer massive discounts last quarter just to keep sales flat.
r and every $ of revenue is reinvested into expanding capacity.
Tesla needs capital raises just to keep the lights on. They have negative cash flow. The comparisons to Amazon are flawed.
You can't make a product fail by hating the company's CEO.
There are financial reasons to stay away from Tesla as an investor, besides the fact they have PT Barnum for a CEO.
SolarCity was well on its way to bankruptcy. The only reason Musk bought SolarCity was to save his cousins and the SolarCity bonds he owned - at the expense of Tesla shareholders. And all it took was a lame presentation showing fake solar tiles to convince them.
But we both know that you don't really *believe* that Tesla is going to fail, you just really, really want them to.
Yes, I do. Just calling it as I would a terminally ill patient. Some company will pick up the pieces after the reorg and the Tesla name will probably continue, and hopefully Tesla car owners will still have a company that'll service them and perhaps build newer models in a profitable manner.
economies of scale?
Economies of scale didn't help Tesla make a profit selling the much more expensive Model S or X, even before they had to institute massive discounts to move metal.
Tesla is circling the train? Oh...yeah...ok. Let me buy that tesla stock from you then since it's practically worthless anyhow. Take $10 a share?
The only argument I hear to Tesla being successful is its stock price. People said that about Enron, Valeant Pharmaceuticals, and many dot.com stocks back in 2000.
Model 3 shipment numbers are about one month behind targets.
http://www.businessinsider.com... "The company plans to produce 1,500 Model 3 sedans in September and grow that to 20,000 vehicles a month by December." A total of 220 have been delivered. All have been returned to the factory for replacement parts because the car is still being developed and tested! There won't be 1500 total deliveries by September, much less in September alone, and there sure won't be 20K by December.
they're holding $16B worth of Model 3 orders
A $1000 refundable deposit to hold a spot in line is not an order. A fraction of those will turn into actual orders. What was the last number of deposits that Musk gave out? 457,000? Given Musk's propensity to fudge numbers, do you really even believe that number was accurate at the time? What do you think the continuing Model 3 delay will do to that number? Which may all be a moot issue, since Tesla has yet to show they can even make a car at a profit. Tesla can't figure out how to make money at $100K - $150K a car, what makes you think they can do it selling a car at $35K - $60K?
And yet, their stock trades at $345.10 a share [google.com], and their market cap is $57.59 billion [google.com].
That their stock price is ridiculously over valued is the best investment thesis you have?
Another company that doesn't make a profit: Amazon [forbes.com]. Shorting them too? Good luck with that.
Amazon has almost always had positive cash flow to fund their operations and growth. They had to go the capital markets just once many years ago. Tesla has to continually go the capital markets just to keep the lights on. https://imgur.com/a/IKilJ And their cash burn is still increasing - Q3 results will be the worse yet. Once they run out of OPM they are toast.
TTAC called, they want you for their Tesla Deathwatch column nearly a decade ago.
If any of you knew how to read a 10K and actually looked into Tesla's finances, you'd realize that given their latest junk bond offering and negative cash flow, they are incapable of ever making a profit. It's losses all the way folks, until the inevitable reorg.
Will ground be broke before or after the Tesla bankruptcy?