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Articles re Tesla—Fact or Fiction?
- Thread starter Robert.Boston
- Start date
Chickenlittle
Banned
The "battery expert" claims lithium ion batteries have to be replaced every three years. Question why, my roadster without battery loss after 4 years and my roadster with 2 mile loss after 2.5 years. Where does he get his information from?
EldestOyster
Member
Adm
Active Member
It would appear Professor Sadoway is a little bit disappointed/jealous. He probably feels his liquid metal battery deserves more attention than it's getting. He has been trashing Li ion batteries for some time now. It's funny how he trashes Li ion for cars too, but I guess he understands the success of Tesla Motors and Tesla Energy go hand in hand.
Matthew Debord implies that Tesla is no longer a high rising stock but is now the stock of a lowly auto company, starting to "plod" away at the unglamorous business of making cars in his For 3 months in 2015, Tesla did something we've almost never seen before. His message is that Tesla has twice bounced off 280 recently and all the good stuff for years ahead is already priced in so there's really no reason to hold the stock.
This is a common theme this week as the FUDsters launch a coordinated attack to keep Tesla from breaching the ATH.
If you Google the author's name and the word "Tesla", you realize he's also the author of the piece about the door handles not working on the Consumers Report Tesla, Consumers Report had one big problem with its new Tesla: They couldn't drive it.
This is a common theme this week as the FUDsters launch a coordinated attack to keep Tesla from breaching the ATH.
If you Google the author's name and the word "Tesla", you realize he's also the author of the piece about the door handles not working on the Consumers Report Tesla, Consumers Report had one big problem with its new Tesla: They couldn't drive it.
Hogfighter
Professional Lurker
jhm
Well-Known Member
If this is intended as FUD, I think it misses that objective. Low volatility on a company growing it's revenue 50% each year would be a splendid investment. Of course, saying that Tesla is just a boring automaker really dismisses how transformative Tesla is. But no matter, as long as Tesla keeps growing the top line by 50% while driving down costs, then they are on a path to well justified valuations. If some investors want to wait until Tesla is GAAP profitible for a while year, that's fine. Such investors will think themselves pretty smart to buy TSLA in 2020 for a mere $1000 per share.
Ok, here is an article which quotes the author's as well as Jim Cramer's concern that for a rapidly growing company with an uncertain future, Tesla has too much debt.
Tesla Will Need To Restructure - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
While much of the debt is convertible, it's true that the leverage is significant and unusual for a young and fast growing concern with a high level of earnings volatility. So the concern seems legit.
What do those of you who have followed the stock for a long time think?
I think the title is alarmist, since a reasonable base base case is that they can grow out of the debt load. But equally, there is significant risk here and assuming they can do that under all circumstances assumes the problem away.
Thoughts?
Tesla Will Need To Restructure - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
While much of the debt is convertible, it's true that the leverage is significant and unusual for a young and fast growing concern with a high level of earnings volatility. So the concern seems legit.
What do those of you who have followed the stock for a long time think?
I think the title is alarmist, since a reasonable base base case is that they can grow out of the debt load. But equally, there is significant risk here and assuming they can do that under all circumstances assumes the problem away.
Thoughts?
In my opinion this isn't a very worthwhile analysis. For starters the author picked 5 companies and out of the five its pretty easy to see that Tesla's debt to shareholder equity ratio is less than one and pretty much in the ballpark of another. Honestly I don't even know why he picked that ratio, I guess that Tesla could have raised equity instead of debt in order to keep that ratio down, but as a shareholder I would much rather take the very low interest debt instead of the dilution. The biggest problem I have is that he doesn't try/ do a very good job of/ doesn't know how to analyze 1.) Tesla's ability to service the debt levels or 2.) Understand Tesla's use of the debt.
His implication is that the cash from the debt was needed for ongoing operations and therefore Tesla would have few adjustments available if sales didn't grow 1400% (also wrong by the way). If the cash was used to invest in company's ability to grow (factories, superchargers, stores, service centers) then Tesla could slow/ stop this growth.
Anyways the easiest way to look at this is that Tesla holds about $1.9B in debt, has $1.5B in cash (from an asset perspective) and has about $250m a quarter in gross profit (and growing rapidly) vs. about $25m per quarter in debt expense (not growing rapidly). Of course they are operating at a loss as R&D and SG&A expenses are also very high, but these can be adjusted if growth fails in the coming years.
If the author wanted to take a look at the high risk/ high reward nature of Tesla's balance sheet leverage & high level of investment in growth vs. future Model S/ Model X sales then I would have found it to be a much more useful article.
Actually, their income is not volatile at all; it's pretty much directly proportional to their deliveries, and their delivery estimates are pretty accurate. They also forecast how much they intend to spend. So I don't give much credence to this article at all.
I think I found my all time favorite example of Tesla FUD. This Seeking Alpha "article" is based on imaginary data, and it's apparent immediately. In the second figure the author depicts the average price paid by customers as having ranged from $65K-$75K the past couple of years. Of course, anyone with a modest familiarity with Tesla knows the actual has been in the $100K neighborhood. The author does us the favor of making this explicitly obvious though, without digging through old reports, by having claimed an AVERAGE PRICE below the lowest cost Model S without any options.
Seeking Alpha is a blog site. They do not fact check articles. This is not an expression of disappointment in their fact checking... they literally do not fact check, and in no way dispute this. It's policy. It protects them from being legally accountable for imaginary rubbish.
Tesla's Insane Mode Of Below-Cost Pricing - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
Seeking Alpha is a blog site. They do not fact check articles. This is not an expression of disappointment in their fact checking... they literally do not fact check, and in no way dispute this. It's policy. It protects them from being legally accountable for imaginary rubbish.
Tesla's Insane Mode Of Below-Cost Pricing - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
Thanks for all your comments.
Cramer is a showman, and Seeking Alpha is a blog. Check.
I haven't heard a proper answer, though, to the key question raised, which was valid, about Tesla's leverage, unusual for a company in their position. I suspect it doesn't matter how you measure it, it's going to be pretty high. I suspect simply that they need the capital despite the higher risk, for the gigafactory, model 3, etc. At least (apparently) they have tried to hedge the down side of the converts.
Something to watch out for. If I find out more useful info I will post.
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30Seconds, thanks, yes, your last sentence outlines the analysis we should be looking for quite well. The key risk might be that a situation where refinancing is problematic would coincide (years 2019-2021) with a situation where Model 3 and/or the battery factory are not meeting demand or revenue expectations. At which point pulling back on investment and/or diluting shareholders would become the only options.
Cramer is a showman, and Seeking Alpha is a blog. Check.
I haven't heard a proper answer, though, to the key question raised, which was valid, about Tesla's leverage, unusual for a company in their position. I suspect it doesn't matter how you measure it, it's going to be pretty high. I suspect simply that they need the capital despite the higher risk, for the gigafactory, model 3, etc. At least (apparently) they have tried to hedge the down side of the converts.
Something to watch out for. If I find out more useful info I will post.
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30Seconds, thanks, yes, your last sentence outlines the analysis we should be looking for quite well. The key risk might be that a situation where refinancing is problematic would coincide (years 2019-2021) with a situation where Model 3 and/or the battery factory are not meeting demand or revenue expectations. At which point pulling back on investment and/or diluting shareholders would become the only options.
CALGARYARSENAL
Member
Anton's article tonight is a classic:
So Now We Learn Why Tesla's CFO Is Calling It Quits - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
So Now We Learn Why Tesla's CFO Is Calling It Quits - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
MitchJi
Trying to learn kindness, patience & forgiveness
This one is pretty bad.
Insight: Tesla burns cash, loses more than $4,000 on every car sold - Yahoo Finance
It's taking facts and twisting it for headlines.
Insight: Tesla burns cash, loses more than $4,000 on every car sold - Yahoo Finance
It's taking facts and twisting it for headlines.
Wow, simply unbelievable the number of jumps to conclusions this "article" makes. The comment section was even more antagonistic than normal as well. As a contrarian, it was somewhat nice to see that there are still plenty of people who believe Tesla will be bankrupt soon, but the ignorance of many of the commentators regarding how long it takes to charge the car, the continued assumption that you have to charge at a charging station vs. charging at home, the continued assumption that only "green" environmental type people would ever even consider purchasing such a car, and the belief that simple physics dooms Tesla... I mean the ignorance is staggering. And I say that with a bit of trepidation because the moment you start calling other people ignorant is the moment your own ignorance sneaks up on you. But seriously, the assumptions many of the commentators make are so easily refuted with 5 - 10 minutes of internet research.
Like I said, I suppose its good because that means there are a lot of people who will eventually see the light if things go the way I expect, and then they will decide to buy the stock at a much higher price than it currently demands. This may take a while, but it really feels like the spring is tightening again. I think the spring is released at the end of Q1 when the Model X ramp up surprises everyone, similar to Q1 2013, which I unfortunately was not a part of because I had barely heard of Tesla back then.
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