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2017Q1 results

Discussion in 'TSLA Investor Discussions' started by schonelucht, Apr 3, 2017.

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  1. luvb2b

    luvb2b Member

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    who's the muppet here, me or goldman?

    in the back of my mind i wonder if lightning can strike me twice in this stock? it feels like the same thing all over again, with my lonely voice in the wilderness crying out "we're making money folks!"

    for those unfamiliar with my history with this name, see: Thinking about Q1 2013 earnings
     
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  2. neroden

    neroden Model S Owner and Frustrated Tesla Fan

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    I'm pretty sure your revenue-side model is right, luvb2b. Of course the question is, as always, *costs*. If the revenue is matched with a big increase in SG&A, there might not be profits.
     
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  3. EinSV

    EinSV Active Member

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    That thread is a nice read!

    I haven't had much time to dig into revenue projections, but do I understand you correctly that you have included $150M in automotive revenue for EAP and/or reg credits? I have been skeptical that Tesla will recognize all of the EAP revenue in Q1, but with reg credits in the mix that assumption doesn't seem unreasonable to me.

    The other item that jumped out was the 27%/73% vehicle lease/sales split, based on the assumption that the percentage of lease vehicles would be decreasing due to the phase-out of the RVG. I don't actually have an opinion on what the right split would be, but just wanted to make sure you were factoring in that only 25% of Q4 vehicles were subject to lease accounting. From the Feb. 22 8-K: "Deliveries subject to lease accounting dropped to 25% of total deliveries, down from 32% in Q3 2016, and down from 42% in Q4 last year." Tesla - Current Report

    Thanks for pulling all of this together -- very helpful!
     
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  4. luvb2b

    luvb2b Member

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    adding in that zev/ap revenue is the only way i could get margins to meet guidance - esp the gaap minus nongaap gap of 5%.

    that 27/73 mix is for my base case. as you point out they were at 25% in q4 and 32% in q3. i didn't want to get overly optimistic and put in less than 25%. but my hunch is that it will be 25% or less due to the coming reduction in the us ev tax credit.

    you're welcome.

     
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  5. Bgarret

    Bgarret Model 3 ownin' Michigan scofflaw

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    #45 Bgarret, Apr 11, 2017
    Last edited: Apr 11, 2017
    I remember that post well. I had been researching Tesla and stumbled on TMC. Got options approval and placed my first options trades on the morning of May 8, 2013 mainly based on that post. Bought:

    10 June 22 65's
    10 June 22 70's
    20 June 22 75's

    This is what I paid for them:

    $1,667.64 $2,385.28 $2,417.64

    About $6,500 invested.

    Boarded a plane from Phoenix to Portland, Oregon, with a stopover in Salt Lake City. Tesla announced earnings as we were taxiing down the runway, me hitting refresh like a madman. Saw the results, and by the time I landed in Portland, knew the options had paid off well. Called up Tesla in Portland for a test drive. Joined TMC on May 10th, 2013. Sold the 40 contracts off over the next 8 days for $54,400. (Sounds like the character Joel in Risky Business and his presentation for Future Enterprisers...)

    Cheers Luvb2b...you are no muppet, sir. (Edit: or ma'am) Owe you a Scotch, or a fancy drink with an umbrella when you head back to the beach. Elon says it is stormy in shortsville, maybe lightning can strike twice. I'm no weather man, but I'm carrying around my one-iron and some loose change in case there's another chance to ride the lightning.
     
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  6. luvb2b

    luvb2b Member

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    thank you. i am often the muppet, but that was one time i was not.

    i had done a lot of work on this name back then and had a lot of help from the community too in finishing out my thoughts.

    2013 was a very special time because the high cost to borrow shares was crushing the call premiums making them inordinately cheap. we don't have that same edge now so it will cost a lot more to play and the payouts won't be so fantastic either. that's my guess anyway.

     
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  7. DaveT

    DaveT Searcher of green pastures

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    @luvb2b I'm so curious to find out how much you made on TSLA in 2013, and also the structures of your trades during that time.
     
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  8. DaveT

    DaveT Searcher of green pastures

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    I love seeing real examples of trades like this. @Bgarret thanks for sharing!
     
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  9. luvb2b

    luvb2b Member

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    imagine that may 2013 $40c were there to do at a nickel. in size. on your other question let's just say i am happy.

    now we are getting sidetracked with nostalgia in a thread about the next report. my mistake this year was not starting this work two weeks sooner in late march as i did back then.

     
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  10. Bgarret

    Bgarret Model 3 ownin' Michigan scofflaw

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    Liked the story, don't usually share trades, and there are a boatload that are the inverse of the one I posted.

    Posting trades is a little like Facebook (or so I imagine, not a participant in FB). You can make it as pretty or as drama filled as you want, but it's not reality. Using the proceeds of some good trades to go to Hamilton or tour Europe with the family....that's reality. Posting trades is like shouting "Scoreboard!" In a game of solitaire.

    Getting back to work, I will dust off my Model and check some numbers to see if I can be of service.
     
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  11. DaveT

    DaveT Searcher of green pastures

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    I definitely agree there's a higher priority in what we do in our lives with relationships. For me, hearing trade stories is more for learning.

    Personally, I rarely share my trades or the size of my position... mostly because I think it becomes a distraction for me. I prefer to keep focused. But I do realize that sometimes other folks might benefit from me being more transparent, so perhaps I should share more.
     
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  12. DaveT

    DaveT Searcher of green pastures

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    Thanks @luvb2b. Geez, it's tough putting my head around those numbers. I mean I can work the numbers... ie., every $10 above $40 would be 200x return. So, if one cashed out at $70 that would be a 600x return. So, $10k would return $6M. But kind of hard to wrap my head around it. And I'd be surprised if anyone who bought at 5c actually had the patience/endurance to wait until $70.
     
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  13. luvb2b

    luvb2b Member

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    so there's a real problem. @brian45011 has posted this
    Tesla - Prospectus Filed Pursuant to Rule 424

    which discusses a bit how to combine solarcity financials with tesla. i have to spend time to understand but if this is accurate it's going to undercut profitability by a whole lot. my revenue numbers haven't made adjustments for this either. getting late for me but there's a section in the 10k that shows the full year combined proforma financials. put the two together would see a front half back half 2016 evolution of how the combination works. getting late so pausing here.

    really?
     
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  14. DaveT

    DaveT Searcher of green pastures

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    Wow. I really need to meet you in person and hear this story.
     
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  15. kenliles

    kenliles Active Member

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    Uh... be surprised then.
    Hand up here
    And through $100 on some others a little further out.
    And $150 on some a little further than that-all through expiration;
    Albeit with perspiration
    :cool:
     
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  16. DaveT

    DaveT Searcher of green pastures

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    Don't forget to read pages 152-154 regarding reasons behind the pro forma adjustments.

    And on page 154, "The pro forma adjustments reflect the elimination of historical purchases and sales between Tesla and SolarCity. The historical loss from operations of Tesla included revenue of $8 million and $6 million for sales of energy products to SolarCity for the year ended December 31, 2015 and the six months ended June 30, 2016. As SolarCity generally sells these products as part of its leasing arrangement, the impact to SolarCity’s cost of revenues in the corresponding periods was immaterial."

    $6M in first half of 2016 is not much, probably TE products with low margin anyway.
     
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  17. DaveT

    DaveT Searcher of green pastures

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    Alright, I am surprised. Did you really buy at 5c and with more than just a couple thousand dollars?
     
  18. kenliles

    kenliles Active Member

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    I did;
    but you also have to factor in some substantial losses prior. It wasn't clear which ER would trigger the squeeze. So lots of previous buys went poof. It took persistent rolling spreads for many months before it hit. A lot of guess work, a lot of faith in Musk, and a lot of research and understanding, and a lot of good cohort community work- much by @luvb2b. Many others as well
    Still hold the stock layer today, but of course having added -

    As @Bgarret so wisely says, there are huge counter losses in other places like GTAT for example.
    Today I just use long stock and some LEAPS. The big risk days are over for this hombre.
     
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  19. DaveT

    DaveT Searcher of green pastures

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    Thanks @kenliles
     
  20. neroden

    neroden Model S Owner and Frustrated Tesla Fan

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    A major aspect of it is the sheer stupidity of GAAP. Notice note (i) to the balance sheet: large amounts of "deferred revenue" liability vaporized into thin air because it has no performance obligations associated with it. Why wasn't that booked as profit originally? It will be under the new rules.

    I honestly don't know what effect SCTY will have on GAAP earnings prior to the upcoming accounting change, because current GAAP is smoking something.

    It would be more useful to predict cashflow, but that's even more obscure; it largely depends on the degree to which the sales staff is cut. One interesting point is that for 2014 and 2015, inventories were growing (draining cash), and in 2016 they were shrinking (producing cash). Anyway, SCTY Q4 cash flow from operations was outflow of $82,957,000, which is still a drain, but a significantly smaller one than in previous quarters.

    *Leased* panel costs, however, show up in cash spent on *investing*. I'm not sure if you can match these up perfectly with their financing ("proceeds from investments by noncontrolling subsidiaries" mostly, plus "proceeds from issuance of solar asset-backed notes"), but they seem to at least be close to matching up. We want the financing to exceed the leases so as to make sure there isn't anything left being financed directly by SolarCity. The key question here, of course, is the spread on the interest rates, which is totally obscured by the nature of the accounting scheme. I'm sure they had a positive spread when they originally leased the panels... but some of the refinancing might have lost that.
     

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