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Discussion in 'TSLA Investor Discussions' started by schonelucht, Apr 3, 2017.
This will become immaterial as Model 3 and solar roof start volume production.
CFO left on good terms to accept a position in public service.
Tesla won't show "massive gains" until second half of linear part of s-curve ramp up of model 3, so 2H18 at the earliest. This isn't the problem though; the problem is retail investors focusing too much on eps for what is basically a pre-revenue (M3) venture capital investment.
I'm not at all sure about that. The monetization transactions have been going too slowly. They added more leases than they added securitized debt in Q1, which is going in the wrong direction. I don't think they can offload those revenue streams at will yet.
To quote myself:
I think we can loosely predict the future swings in NCIs and so forth based on this. Lease installs should drop every quarter going forward (since that's the stated intent) so the question is when the tax equity "flips" happen; when this happens the portion of the Hypothetical Liquidation at Book Value which belongs to SolarCity goes way up. (It's around the same time when the bizarre drops in HLBV based on tax assets end.) This time is typically 5 years out.
SolarCity leased installs were up, by quite a lot, every quarter until a certain point. When? As we approach the five year anniversary of that point, we should see more and more installs "flipping" to SolarCity and after the five-year anniversary of that point the tax equity investor nonsense should be minimal. We'll still have the cash equity investor stuff but that's much more straightforward and consistent.
OK, I'll do my own research
1Q 2015 -- 153 MW
2Q 2015 -- 189 MW
3Q 2015 -- 256 MW
4Q 2015 -- 272 MW
1Q 2016 -- 214 MW
2Q 2016 -- 201 MW
3Q 2016 -- 187 MW
Sooo. The leasing peak was almost certainly in 4Q 2015. We won't see the weird tax equity transactions from this straightening out until the end of 2020.
I hope the accounting change will obviate all of this sort of analysis. Might not.
yes I read that as well VA. Just find it extremely vague. Maybe you know the exact position? He worked at Google for 13 years or so....
I'd be more concerned if the replacement wasn't deepak.
Why do you assume they want to securitize the debt?
Tesla/SCTY managements may have a more favorable view of the asset quality and the strength of the borrower base (i.e. 700+ avg credit score) than potential investors in these leases. In that case, wouldn't they want to collect the cash flows themselves?
I have experience in M&A and also some experience in purchase accounting as part of M&A transactions, both on sell-side and buy-side.
This is likely a one-time adjustment, possibly related to valuation of identifiable intangible assets and/or goodwill. Note that the investor letter specifically points out this was a non-cash adjustment, so it may be a depreciation assumption or discount rate adjustment on lease payments or a write-down of Silevo goodwill et cetera. 10Q will include more detail.
The important point is: it is non-cash and very likely one-time, so I would expect it to not be an issue in future quarters.
8-9% cash flow for a company with 70% yoy growth. Math=unload it
Tesla is capital intensive. They want the cash now to build Gigafactories with, rather than getting it a decade down the road.
Other way to put it is: this cash flow stream is really not giving them a good ROI. *Maybe* 8%-9%. They can get much better ROI on the next Gigafactory.
I agree. Marginal ROIC is extremely high.