Why do you think it was a dumb idea? I bet it works. Q2 results were reported after the last equity raise. Q3 will be before the next equity raise. Are they equally important in your mind? Do you think they are equally important in Elons? I'd say you were half right.
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Why do you think it was a dumb idea? I bet it works. Q2 results were reported after the last equity raise. Q3 will be before the next equity raise. Are they equally important in your mind? Do you think they are equally important in Elons? I'd say you were half right.
dc_h
Active Member
I'm sticking with the end of quarter production ramp and not corporate revisionism. I'm sure primary focus was not deliveries in Q2, not out of some screw Q2 numbers, but due to focus on getting the plant running correctly. That was the burning fire in Q2. The burning fire in Q3 is deliveries, which will drive potential free cash flow and profit (maybe). Q4 should have no fire drills, just a focus on hitting ~25k deliveries again, AP software 8.1, raising additional funding, getting the capex moving full speed and starting to build test cars in earnest. Demand drivers in Q4 should be the new no SC option, to drive down a 24 month lease another $100, and the new AP software, if not AP 2.0 hardware. AP 2.0 would drive early 2012-13 buyers into the market. That seems more important than P100D.
We should also see early results in Taiwan, Korea and Mexico in Q4. If those markets can add a 1000 more sales, it will make 25,000 much easier. Taiwan and Korea Q4 sales probably have to happen in September.
**Interesting issue on the tracking site, they have not issues VIN's since before Labor Day. They could be at 160 or 161,000 at this point, but you can't tell.
We should also see early results in Taiwan, Korea and Mexico in Q4. If those markets can add a 1000 more sales, it will make 25,000 much easier. Taiwan and Korea Q4 sales probably have to happen in September.
**Interesting issue on the tracking site, they have not issues VIN's since before Labor Day. They could be at 160 or 161,000 at this point, but you can't tell.
They basically agreed to this through their continued statement to deliver around 50k in H2. But they couldn't deliver nearly 15k in Q1 or Q2. So, if Q2 was looking a bit better but to make H2 look really good with a great Q3, the only way to do that is to stuff Q2 sales into Q3 and make Q2 the victim. And it will pay off for the short term and help garner the stock sale. It's pretty straight forward and easy to see going by the "good production ramp caused slow sales" statement. They could have stopped production of all inventory and marketing cars and just built customers' cars. But that didn't happen. So, I still think this is the "chess play" going on. Hate the theory but it's been done before by many firms whether you believe me or not. I've seen software sales come in whereby a huge government or Fortune 100 order hits in Q3 and you don't want to have a crazy blow-out Q3 and then bad Q4, so you hold revenue recognition and other sales into Q4 to balance them out. Around DC, this kind of thing happens a lot. At one firm I was at in the 1990s, sales guys would come in and say "closed a $20M deal today for a site license at AT&T after I gave them an end-of-quarter deal". Other times, they'd be on the phone with customers on the last day of the quarter up through midnight trying to make number. Lot of shenanigans during the years that led up to the internet bubble bursting. There are a lot of young fans of Tesla and I bet few have worked in firms who have done this (including public companies). Yes folks, sales organizations sometimes look a lot more like Glenngary Glen Ross than Chipotle selling your favorite burritos.
This guy was asked if they could bring his November requested order into a September close.
https://teslamotorsclub.com/tmc/posts/1717465/
Vins - a 160,xxx was given on 9/5. About right in line with the 1000/wk again for MS. MX is softer. Was only 3000 MX Vins in August. Still not hitting a solid 2000/wk average when aggregated. This supports my theory. Like any theory, it is forward looking and is supported and protected by the Safe Harbor lifestyle guarantees afforded to any financial "analyst".
I will invent a business term here called "Sales Mounding". Pushing sales from one quarter to the next while pulling sales from the following quarter back into the target next quarter. Mounding of Q2 -> Q3 <- Q4 to create a really good Q3. Why would they want to pull these later in the year deliveries into Q3 if they are certain of doing 50k in H2? The goal seems not to be H2 sales but Q3 sales at this juncture. There is natural demand then there is pushed-demand and active selling. Let's see how this plays out.
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I've been through dot-bomb, and I have seen sales shenanigans, but that's a completely different sales model. Those industry sales are b2b and naturally come in fits and spurts. And they're usually paid on net-30 terms or longer. Your $20 million deal is a perfect example of that. It probably took months to start, secure, and then sign it. In those cases, the finance charges to carry the inventory and deliver product before payment can add up. It would make sense to delay recognition of the sale until the quarter when payment is likely to be received as well.
Tesla is currently in the retail business, and in retail you push unit volumes as cost efficiently as possible, because there just aren't many opportunities to sell in bulk (schipol airport being one example). The revenue is recognized only upon delivery, even though the parts have already been purchased. Screwing $250 million (~2500 cars) in revenue from one quarter to "mound" out Q3 sales is just costs too much in OpEx and finance charges to be a reasonable decision in any book.
Your theory has no legs. Please explain why some signature MX were air shipped to Europe towards the end of Q2? If I recall corretly, a lot of bears pounding on the table how Tesla is trying really hard to deliver in Q2. Using your Sales Mounding terminology, it was a hell a lot of Q2 <- Q3. Now, you changed your tune and are singing Q2 -> Q3 <- Q4. Nothing can be more delusional than this.
Oil - the company I spoke of was software. Essentially no inventory carry costs. But they faced blow-out quarters when things went very well and knew it better to smooth over the current deals into next quarter if pipeline was slack down the road. And yes, it was a silicon valley company. The CEO thought that it was going to grow to $5 Billion annual revenue. I think max it ever hit was $1 Billion before slowing, lipstick application and eventual buy-out 10 years later. But things were hot and stock focus was huge in the 1996-1998 period.
TMSE - how many airfreight? 5 to places like Denmark or something? I doubt it was much to really worry about factoring in. Let's see how it plays out. I am still looking for another tell that hasn't fully ripened yet regarding a statement made during Q2 ER Q&A.
TMSE - how many airfreight? 5 to places like Denmark or something? I doubt it was much to really worry about factoring in. Let's see how it plays out. I am still looking for another tell that hasn't fully ripened yet regarding a statement made during Q2 ER Q&A.
dennis
Model S Plaid
I've been an executive in 4 Silicon Valley tech companies - 1 hardware and 3 software. I saw what was done to push deals to the next quarter once the forecast made to WS for the current quarter was met. But I NEVER saw a company tank the current quarter and miss estimates in order to blow out the next quarter. It just doesn't happen, because high growth companies can't know with confidence what the next quarter will bring.
The other fallacy in your argument is that the SP is supported by WS's confidence or lack thereof in Tesla being able to deliver on the Model 3 production goals. In this environment it would be foolish to deliberately miss on 17,000 deliveries when you are forecasting 100,000+ deliveries in just 6 quarters.
The SCTY buyout announcement took the stock down hard. The quarterly sales number didn't budge it on 7/5. I think one was a surprise (SCTY) and was smoothly re-traced back to pre-announcement levels just prior to 7/3 quiet weekend announcement.
Did your firms have this much market valuation held and managed by large funds who must maintain their holdings? And did your firms have this much focus? This is a whole new animal versus the pretty well known software/hardware firms. ORCL was involved in some interesting activities in early 1990s during the database battles. Quite a few others got into share price support maneuvers. Was a wild time. Heck, even now... ORCL Stock: Oracle Sued for Allegedly Adjusting Sales Figures Tesla's future has needed the stock and bond injections since 2013. Price support is very much a talking point, I presume, in the board room.
TSLA can know what Q3 will be due to the 8000 or more deliverable MX confirmed reservations plus the backlog of MS confirmed reservations and the inventory lay-out they had. They discounted a bunch of P90DL to move then and introduced 2-year leases and the P100DL for the speedy guys. They knew/know/will create deliveries enough to have a blow-out Q3. It is pretty obvious. Cheer them on - they are looking to bring in Model 3 orders now into MS 60, Q4 reservation delays into Q3 as deliveries and more. It appears to be capable of doing 22k in Q3. But does it cannibalize Q4? Do you know what the deliverable MX list will look like in Q4? Do you know that the 5-seat configuration is delayed until 2017? Could they use that as an excuse to lower Q4 guidance after the stock sale saying there are 10k cars that cannot be delivered or something like that? From the outside, we cannot know what number of 5-seat arrangement MX reservations there are. But some have posted here that they have been called and offered 1/2 price options upgrades to 6-7 seat and SAS to close deals now. It's interesting to watch all this play out.
Model 3 was a perfect play in the game too. Over 5-6 quarters from delivery. Good showing on 3/31 evening. Lots of reservations by anyone who wanted to do a fully refundable reservation item. They basically got a 373,000 line item leads list to call to offer Model 60 later in the summer. Plus, the carrot on the stick is now 4 quarters away and WS has a long view so they will support and wait out Model 3 into Q3/Q4 next year. But they will be looking for any cracks in the story. The one thing Wall Street hates more than being wrong. That is not being in the game and taking fees for share and bond running, hedges and other banking fees for companies needing funds. I can't see the next round being less than $4 Billion. Hence the Musk email, the tickler saying "GAAP profitable" and all that.
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dc_h
Active Member
++++++++++++
The stock would be 230 now if they delivered 17,000 in q2 and the market believed 80,000. Bottom line, it was the ramp.
Bonaire, I appreciate your skepticism and analysis, but not conspiriricy nonsense.
dennis
Model S Plaid
Yeah, 3 of the 4 were WS high-fliers. The last was an Internet SW company that went public during the bubble at $4.50 and went to $231 before crashing.
I'm still waiting for your existence proof of a company that deliberately tanked the current quarter in order to blow out the next quarter, since that is your conspiracy theory about Tesla's Q2/Q3. I don't know of one, do you?
Oil - Q1, 2016. Well manipulated market and firms were able to take advantage. WPX, APC, etc. That was much bigger in scale than even TSLA is in the current term. Some drillers had to keep pumping but others shut wells and held off until Q2. Overall, control is in the futures markets but ever since 2014, there has been a lot of what appears "larger forces" controlling things. Commodities may react to hold back sales if they are not under contract until better market conditions occur or deals allow them to create higher sales.
I'll think about possible examples of specific companies doing sale packing and may have an answer tomorrow. I have to think GMCR was one of them - in that their stock history was very vaunted, pumped and manipulated thinking everyone was going to get a Keurig. Maybe SODA to some degree. They do fall into the seasonal products area with winter holiday periods being a time where extra sales may have occurred.
I'll go with an initial look at the q3/q4 window of 2014 for GMCR. They manufactured a good Q4 2014 and ramped pps to 150 not too long before serious negative results and a drop to 40, final buyout at 90.
Keurig Green Mountain Inc (GMCR) Earnings
I'll think about possible examples of specific companies doing sale packing and may have an answer tomorrow. I have to think GMCR was one of them - in that their stock history was very vaunted, pumped and manipulated thinking everyone was going to get a Keurig. Maybe SODA to some degree. They do fall into the seasonal products area with winter holiday periods being a time where extra sales may have occurred.
I'll go with an initial look at the q3/q4 window of 2014 for GMCR. They manufactured a good Q4 2014 and ramped pps to 150 not too long before serious negative results and a drop to 40, final buyout at 90.
Keurig Green Mountain Inc (GMCR) Earnings
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dennis
Model S Plaid
Are any of those a deliberate miss vs. the guidance for the current quarter that they gave less than 2 months previously? That's the part I find hard to believe about your Q2 Tesla conjecture.
GMCR engineering profits is one thing, we're talking about exaggerating a loss here in TSLA's case. You won't be able to find an example of any public company deliberately compounding a loss in a quarter just to show a profit in the next one, because that's just a dumb idea.
On top of that, you're now lumping Elon with Nostradamus, because you're saying that he predicted that the stocks wouldn't tank further from the poor Q2. So since the stock won't drop anymore after the SCTY merger drop, why not just make the loss bigger and sandbag Q3?! Or maybe Elon is a master market manipulator, and was able to keep the bad Q2 from tanking the stock with his silver tongue? If that worked so well, why couldn't he stop the stock from dropping after the SCTY merger announcement? Don't you see how crazy that sounds?!
Krugerrand
Meow
If one can't meet one goal for impedance reasons, pacing to push harder at the next goal is a natural human behavior. Even mice move in fits and starts.
Because tax and incentives changes effective from July 1st, Tesla promised certain owners to deliver before that date.
That could be an answer IF they had full control of pacing and weren't behind already -like in a production constrained situation. AND IF there wasn't a secondary consideration - meeting production guidance.
If a mouse was starving, it wouldn't starve further today so that it could feast tomorrow - you don't know what will happen tomorrow!
In addition, bionaire has contended that tsla is now demand constrained, which would fall outside of Tesla's ability to "pace" at will.
When Tesla reported much larger production than deliveries in Q2 the reigning conspiracy theory was that there were no buyers for these vehicles and they were just being dumped into inventory.
Now that that theory is debunked as both production and deliveries continue to grow, the new conspiracy theory is that Tesla held back Q2 deliveries to inflate Q3 numbers.
Honestly, this is getting into tinfoil hat territory.
Now that that theory is debunked as both production and deliveries continue to grow, the new conspiracy theory is that Tesla held back Q2 deliveries to inflate Q3 numbers.
Honestly, this is getting into tinfoil hat territory.
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