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More FUD. Some are starting to realize that Q3 numbers will be amazing, and they are trying to dampen the rise in the SP. I bet Tesla has decreased it's production costs quite a bit, and the discounts won't hurt it profit margins very much. The same people who say Tesla can't ramp up for Model 3, say it is a problem when Tesla starts to practice ramping up by selling lower cost versions of the Model S and X and delivering huge numbers.
larmor
Active Member
uh huh, may be the board of SCTY should be consulting all the super analysts instead... just sayin'SolarCity’s President is leaving after restructuring the executive team ahead of merger with Tesla
Hmm, seems some people are sure the merger is happening
Seems to me bears are desperately trying to preempt with negative spin the good news they see coming. Kind of like when a SeekingAlpha bear predicted a really high number of Model 3 preorders.
My opinion is that shorts showing fear over delivery numbers is bullish. If we do have a blowout quarter, the numbers will speak for themselves. It won't matter how bears try to spin it.
The analyst who supposedly feels it's "worriesome" that Tesla had a 1-2 day (not publicized sale) on some CPO models, obviously didn't see 300-400 vehicles disappear from inventory in 1 day.
Since when is it a bad thing for a company to have a quiet, unadvertised sale to clear inventory, at a profit, before the end of the quarter? I feel very confident saying Tesla sold every CPO vehicle at or above cost.
Since when is it a bad thing for a company to have a quiet, unadvertised sale to clear inventory, at a profit, before the end of the quarter? I feel very confident saying Tesla sold every CPO vehicle at or above cost.
larmor
Active Member
Also, yesterday's tech product is always cheaper than tomorrows, eg laptops, cell phones, etc...The analyst who supposedly feels it's "worriesome" that Tesla had a 1-2 day (not publicized sale) on some CPO models, obviously didn't see 300-400 vehicles disappear from inventory in 1 day.
Since when is it a bad thing for a company to have a quiet, unadvertised sale to clear inventory, at a profit, before the end of the quarter? I feel very confident saying Tesla sold every CPO vehicle at or above cost.
at the space x mars presentation , Elon did not have the demeanor
Of somebody about to screw up the quarter
$600 million in 2-3 weeks!! That is impressive for a company that is about to go bankrupt. /sarc
sundaymorning
Active Member
After decades of "top notch" German engineering, VW can't even put together a decent ICE without cheating. And now we are suppose to believe they're going to succeed in a hail marry attempt at 250 miles of range? C'mon now VW, you fooled us once already.
stealthology
Member
11% arbitrage. I think we hit a high of 35% a week or two ago? All of Fast Money said it wouldn't go through because of the spread? Now what's important: Oct 3.
I still don't know how much of this is for new installations and how much for old installations.
To the degree to which SCTY is monetizing old installations, *SCTY will actually be a source of capital for TSLA for the next 9 months or so*, exactly when Tesla needs it. If I'm right about this, Musk's financial engineering here is genius.
Which is really sad. As recently as the 1990s the WSJ had the best financial investigative journalism in the world. (They broke the Enron scandal!) Since Murdoch bought it, it's turned into fishwrap.
Several things to note.
1) There is a higher mix of Model X with higher price tags and those really weren't discounted. We really don't know the margin for those vehicles, however.
2) Discounted S75's and 75D's actually represent a higher margin than the S60 and 60D's, as they are the exact same car with the exact same COGS. Tesla basically pulled forward what they expect was the take rate on the option to upgrade into Q3 instead of the natural uptake over the next year or two.
3) You can look through the vehicles that were removed from the site using historical data on ev-cpo... we're talking universe of x or so vehicles for the U.S., and many of them were not discounted beyond the normal demo/inventory discounts. (x = go get a subscription for that data from ev-cpo.com). That x number is relatively small against the backdrop of the entire quarter. P90D's represent about 25% of them, sold at a variety of price points. The S75's and 75D's represent maybe 50% of the number, and many of those were not sold at any discount.
4) It seems to be a deliberate effort to have less expensive cars as part of the inventory stock. That might actually be quite positive, as the discounts that Tesla usually gives to move the highest end stock each quarter was probably a wash as compared to the discounts to move lower end product. Plus the overall value of the demo stock is less, which means a lower finished goods inventory. That does not necessarily translate to any real difference in product mix - I'm not sure we really have good information on that.
5) Improving margins might completely hide the discounting
6) The P90D fire sale of both classic nosecone and overall when the P100D was released is again, a smaller number of vehicles and many of these had significant miles and age which would have caused discounting anyways. With the estimated 40% margin on these vehicles, Tesla likely did not sell these at a loss and does this essentially every quarter to refresh demo stock. This does also mean there was increased demand for the facelift models and the P100D models. Obviously, the total number of P100D model sold is quite modest.
Undoubtedly, Tesla did pull some demand into Q3. That's definitely a concern, as well as breaking the seal on discounting in a wider fashion. We simply don't know the effect on margins. I suspect any improvement in the margins on the Model X dwarfs the effect of the discounts on S75/75D's. The effect on future buyer behavior is the real risk for Tesla.
Also, I usually don't like shooting the messenger, but Brad Erickson has a particularly bad record at Pacific Crest:
https://www.tipranks.com/analysts/brad-erickson
Ranked #3,747 out of 4,185 analysts, less than 1 star rating.
To obtain nukes for mars Elon would need to get them from the US/EU, so they would have to be fully on board in such a scenario... or maybe he'll try to strike a deal with the Russian again.
Dead fish and Luca Brasi find that fish wrap comment offensive.
I want to thank neroden for publicly bringing the arbitrage opportunity to my eyes. Up 18% so far!!
The only regret was not risking more, which I've had enough bad trades to not really feel bad about not arbitraging more.
OMG! What a great idea! Forgo some eventual profits 10 years down the road for some not bad financing terms now. Still, wouldn't Tesla be able to borrow more cheaply than these Solarcity bonds? Iirc, the last one was at 6.5% interest...
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