Concerned about TSLA financial health, reconsidering ordering new MS

[Buggle]

I understand your point, however buying a car is making a bet on the viability of the company and their ongoing operations, which includes availability of parts, service and ongoing investment in their software/hardware platforms.

Many had the same concerns about Amazon in the first decade, where they were focused on building infrastructure and scale, which required massive investments and no sign of profitability for years. However, the Amazon capital investment strategy/structure seemed well thought out and there was a level of transparency. With Elon, he is a visionary, but has the scale of the company and his other ventures outgrown his financial management capabilities? When there is significant turnover in the financial ranks the the CEO has issues with the SEC, it does require some pause.

I will likely buy the car, but buying it is a bet that the company will be viable and thriving for years to come -- which is why I posed the question to others to get additional views.

I think this is all completely irrelevant. If Tesla goes bankrupt either they will shed debt, restructure, and continue on, or shed debt, get bought out, and continue on. All this stuff about them ceasing to exist isn't happening.

Worst thing that'll ever happen to us is we may have to pay for the in car LTE, streaming service, or the OTA updates under new overlords.

 

[jeffro01]

Theres nothing about the current financial situation that would persuade me from purchasing another Tesla. The current FUD is being driven hard by third party interests that still want to kill this company.

That being said, their business practices are shady and corrupt enough to make me think twice about buying another Tesla...

Jeff

 

[CarlK]

I think this is all completely irrelevant. If Tesla goes bankrupt either they will shed debt, restructure, and continue on, or shed debt, get bought out, and continue on. All this stuff about them ceasing to exist isn't happening.

Worst thing that'll ever happen to us is we may have to pay for the in car LTE, streaming service, or the OTA updates under new overlords.

I'm sure the Chinese or even Europeans would love to buy the company just to get Elon.

 

[Watts_Up]

That being said, their business practices are shady and corrupt enough to make me think twice about buying another Tesla...

This can even be the case for some respectful organizations

2019 college admissions bribery scandal​

 

[neroden]

Tesla's financial health is excellent. Service is getting better and better. Tesla has enough cars on the road that they'll be supported forever by someone. Google offered to buy the company before; if the stock price drops enough, they will do so again.

You've been listening to fraudulent claims about Tesla's finances, which are a topic I dig into in detail with great regularity.

Go ahead, get the Tesla.

You may not have run *capital-intensive* large businesses, so your experience may be misleading you. Tesla's cash flow is generally substantially better than its GAAP profit because a lot of expenses are depreciation -- i.e. it was paid years ago. Q1 cashflow featured an inventory buildup to stabilize the pipeline of deliveries and parts for service, which will have to happen again in Q2 and probably part of Q3, but will then be done.

Since it's an economies-of-scale business where SG&A and R&D stay more or less fixed, Tesla does need to be producing more cars than it did in Q1 in order to be sustainably profitable. However, evidence is that they're getting there; supplier bottlenecks bollixed them up in Q1, but these are reported to be resolved.

I got my Model S six years ago. At the time, Tesla was only producing 20,000 cars a year, so if they went under, there might have been a serious question as to whether aftermarket service would be available. (Now, with about three quarters of a million Teslas on the road, there's no question; they will be serviced.)

Tesla was in actual serious financial difficulties at least three times since I got my car (right around when I got my car, when Model X was released and they couldn't get it to work right, and when they couldn't get the Model 3 production up to speed). And yet I've had no trouble maintaining and servicing my car (apart from some communications issues). Now, by comparison, Tesla is in a fine position; nothing to worry about. (They're even fixing the communications issues.)

 

[CarlK]

Coty Willard who's a fund manager and used to have financial shows on Fox business and CNBC. This is what he says he found out recently. All those FUD about Tesla's problem were unfounded and likely created by shorts. He went to buy a Model 3 and TSLA after the research. He was a known long time TSLA bear. That adds extra credibility to his story.

Read this, you’ll buy TSLA and a Tesla

 

[argon2018]

My 2016 MS 90D (refreshed fascia and AP 1.0) lease is up in about eight weeks and with the recent Model S/X upgrade announcement, I was thinking of upgrading to a 2019 MS Performance (with free Ludicrous mode for current owners/lessees). Instead of leasing my next Tesla, I was planning on buying, given AP 2.0 hardware and recent drivetrain and range upgrades, it would be worth keeping.

However, Tesla's recent $702M loss and a similar or larger loss expected for next quarter has me really concerned about their viability. Taking into consideration $2B cash on hand, means that a capital raise is right around the corner. That leads to dilution of stock, loss of confidence in the company and uncertainty/disarray ahead in the next 18 months.

I run large businesses and am vary familiar with capital markets, so maybe I am overthinking the situation? I don't want to be the owner of a $130k car that's depreciated significantly, then 18 months later wondering if the company is viable for the long term or hoping that APPL buys them out (which in the long term may not be too bad).

I have to decide what to do in the next two weeks. Do I order my new MS or purchase or do I lease a BMW M550i Sport and see where Tesla is in 3 years, in hopes to come back to the brand? Would love your thoughts.

you leased Tesla when they were in a far worse position than now.. they will get profitable after this quarter..

Tesla will explode in a few years.. 1K per share mark my words

 

[Midnight Star]

My response to a similar question in another thread Imo the brand, service & support will continue, somehow

To the OP: I can understand why you may be concerned, give the noise out there, but this video helped me put it into context:



The reality imo is if Tesla is no longer able to operate as an independent entity, others will step in and buy them out, as they have tried to do previously.

There are also plenty of examples in car making history of independent marques that got into trouble, being rescued and going on to succeed as part of a broader group. Auto majors and big tech would fight over Tesla for sure (and the winner would continue to provide support for your purchase )

 

[Midnight Star]

Oops - the video is here:

 

[TradingInvest]

To OP: buy the product you like the most, don't worry too much. Life is short, enjoy it when you can.

I followed Tesla for many years, this company will be around for a long long time. Worst case they get 3~5% dilution to raise extra cash as an insurance. They can buy those shares back down the road. Apple has been buying back around 50% of their float. Apple used to have debt problems long time ago.

The Shanghai Gigafactory is coming, those who keep saying it's a hoax don't know that they are talking about. This factory will dramatically reduce cost for Chinese market. Those who think the Shanghai produced Tesla cars will have a demand issue don't understand that market.

 

[Zero CO2]

My 2016 MS 90D (refreshed fascia and AP 1.0) lease is up in about eight weeks and with the recent Model S/X upgrade announcement, I was thinking of upgrading to a 2019 MS Performance (with free Ludicrous mode for current owners/lessees). Instead of leasing my next Tesla, I was planning on buying, given AP 2.0 hardware and recent drivetrain and range upgrades, it would be worth keeping.

However, Tesla's recent $702M loss and a similar or larger loss expected for next quarter has me really concerned about their viability. Taking into consideration $2B cash on hand, means that a capital raise is right around the corner. That leads to dilution of stock, loss of confidence in the company and uncertainty/disarray ahead in the next 18 months.

I run large businesses and am vary familiar with capital markets, so maybe I am overthinking the situation? I don't want to be the owner of a $130k car that's depreciated significantly, then 18 months later wondering if the company is viable for the long term or hoping that APPL buys them out (which in the long term may not be too bad).

I have to decide what to do in the next two weeks. Do I order my new MS or purchase or do I lease a BMW M550i Sport and see where Tesla is in 3 years, in hopes to come back to the brand? Would love your thoughts.

the real question is will BMW still be around in 3 years .... i know they will but they might be in a worlds of hurt

 

[MXWing]

I run large businesses

None that have the desirability of a Tesla apparently.

If you did, you would also not care about cash burn as long as your revenue was growing.