TSLA Market Action: 2018 Investor Roundtable

[mongo]

The same article says Tesla is close to becoming profitable in Q3. If not for Elon's insistence to not raise capital at bargain basement prices, these headlines would not be there.

In any case, as a shareholder, of be happy to see a 2 to 5% dilution to put nonsense like this behind and accelerate the China factory. But I am not Elon Musk. So what do I know.

How does that even work? Why does Tesla need cash on hand to be profitable? I thought cash flow was separate from net profit. Wouldn't a request for delayed payment be just as effective and less effort? It's not like suppliers have cash piles just lying around...
So confused....

 

[generalenthu]

How does that even work? Why does Tesla need cash on hand to be profitable? I thought cash flow was separate from net profit. Wouldn't a request for delayed payment be just as effective and less effort? It's not like suppliers have cash piles just lying around...
So confused....

I do not think this is about cash. It is about showing profitability in Q3.

Delayed payment terms, or discounts on future orders don't move the needle on q3 profitability. If it were a one time payment for past orders, it will hit gaap. But it will not hit non-gaap.

 

[22522]

I do not think this is about cash. It is about showing profitability in Q3.

Delayed payment terms, or discounts on future orders don't move the needle on q3 profitability. If it were a one time payment for past orders, it will hit gaap. But it will not hit non-gaap.

This is so they can announce at the August reporting meeting?

 

[generalenthu]

This is so they can announce at the August reporting meeting?

I don't know what Elon will say at the call.

Certainly, there have been headwinds with the strong dollar, China tariffs, etc. Would be a steeper climb than what Tesla might have imagined when they announced likely q3 profitability.

 

[mongo]

I do not think this is about cash. It is about showing profitability in Q3.

Delayed payment terms, or discounts on future orders don't move the needle on q3 profitability. If it were a one time payment for past orders, it will hit gaap. But it will not hit non-gaap.

Ah, so a full refund, not a temporary moving of cash? (Article is paywalled)
Thanks!

 

[generalenthu]

Ah, so a full refund, not a temporary moving of cash? (Article is paywalled)
Thanks!

Reddit has the article text posted.

 

[electracity]

How does that even work? Why does Tesla need cash on hand to be profitable? I thought cash flow was separate from net profit. Wouldn't a request for delayed payment be just as effective and less effort? It's not like suppliers have cash piles just lying around...
So confused....

The refund would show as income in the quarter returned. Tesla could return it later by paying slightly higher prices.

The report could also be negative spin on a simple request for lower parts prices. After the bizarre NYP article anything seems possible.

 

[BrianZ]

That key doesn’t seem to fit the lock…

Since you’re expecting volatility, maybe a better approach would be to trade. I’ve been buying & selling for the last couple years and likely have a lot more to show for it than those who simply held.

As I’ve said before, TSLA is a short-term trader’s dream come true. Its price spikes up on good/down on bad news and the option premiums are high. Couldn’t ask for anything better.

Agreed. In addition, there are some very distinctive patterns to the way the stock moves, such as the mandatory morning dip, the mid afternoon peak, and the final hour decline.

However, I don't know how to play the Q2 earnings. We know it'll be bad, but I'm not sure what the near term "support" and "resistance" points should be for day trading. Therefore I'll probably be sitting this one out. What I do know is that if the stock crashes more than 5% from the bad Q2 earnings report, I will be using all my dry powder on calls.

 

[30seconds]

Bunch of nothing-itis. Asking for a discount to push for profitability in a given quarter is a long, long way from being bankrupt.

Furthermore the suppliers have nothing to gain and everything to loose from Tesla going under.

 

[CuriousSunbird]

Just wondering. Were you bearish on AMZN in late 90s and early aughts as well?

If you were, was your argument that they would go bankrupt based on cash flow problems?

No I was not.

Obviously Amazon's leverage, working capital and purchase commitments are that time were in a much safer position than Tesla is now.

 

[mongo]

The refund would show as income in the quarter returned. Tesla could return it later by paying slightly higher prices.

The report could also be negative spin on a simple request for lower parts prices. After the bizarre NYP article anything seems possible.

Yeah, the way the article reads it could be that

• All suppliers are considered important to profitability
  
• At least one supplier is being asked for refunds on a long running project
• Tesla is seeking price reductions from many suppliers

Not rare to reduce sales price on modules due to competition during span of supply contract, or have annual reductions baked into original contract. Tesla may have had generous terms (for the supplier) based on original S/X uncertainty and is seeking to correct that based on historical volumes...

 

[generalenthu]

The Reddit conversation on this at the moment is pretty good.

Looks like wsj updated the article with opinion from "automotive consultants", that the suppliers might go out of business if they yield to Tesla.

r/teslamotors - [WSJ] Tesla Asks Suppliers for Cash Back to Help Turn a Profit

 

[CuriousSunbird]

I’m torn on this. On the one hand: ya, this is a Tesla enthusiast forum. Kinda a weird place to be for someone who hates them.

On the other hand, some exposure to people with apparently genuine opposing views is beneficial, even if it does raise our blood pressure sometimes.

I don't think many of the shorts - at least that I know - hate Tesla (after all, it's just a corporation/stock). We just think it's misplaced.

If you are a short, I think this is one of the smarter places to go. Where else can you hear the long arguments so conveniently assembled? SA used to be good but now there are few sensible/numerate longs left.

 

[CuriousSunbird]

It should also be reasonable to think that a forum named www. teslamotorsclub .com would be a place where enthusiasts go, and haters do not.

I for one do not go over to the Honda Civic Owners forums and post crappy things. (in part because I used to own one)

But imagine a Subaru driver visiting Buick forums and taking issue with the stuff that was posted there. Doesn't make sense.

If you do not like Tesla, or want the company to fail, what are you posting here for? It won't work.

Well, I slightly disagree on that.

If you're talking about the forums about the cars it makes sense. But if it's a forum about investing in the stock it should be a place for debate.

 

[CuriousSunbird]

Ah, so a full refund, not a temporary moving of cash? (Article is paywalled)
Thanks!

Here's the text:

Mod: It's against the terms of service to post copyrighted content. There's a reason it's behind a paywall. Content deleted. --ggr.

 

[Jovian]

User on reddit @alteredego suggested Tesla should just post the memo because the wsj won't. Might not be in same language that wsj is suggesting.

 

[CuriousSunbird]

User on reddit @alteredego suggested Tesla should just post the memo because the wsj won't. Might not be in same language that wsj is suggesting.

More transparency is almost always good.

 

[generalenthu]

User on reddit @alteredego suggested Tesla should just post the memo because the wsj won't. Might not be in same language that wsj is suggesting.

It sets bad precedent / expectation, to start posting internal contract snippets to refute speculation.

 

[bdy0627]

This comment on Reddit struck me as the most honest and intuitive about the latest negative articles coming out about Tesla:
"Why is there so much Tesla news? If they are going to fail, why not just let them?"
Answer: Because there is a ton of $$$ at stake.

 

[Dan Detweiler]

Here's the text:

Mod: copyright content deleted. --ggr./QUOTE]
Yet another example of "make a story where there isn't one." No doubt it will be successful in keeping the price down where the shorts want it. Timing us perfect. Sunday right before trading Monday morning to boost that FUD level to start the week on a negative note. They write a new one (or more) every week and manage to get the same results.

Sickening

Dan