bdy0627
Active Member
I thought he said that sometime in November/December/January. Maybe it was the earnings call in early February.He sees a clear path out of production hell is most revealing,
While before that was not the case
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I thought he said that sometime in November/December/January. Maybe it was the earnings call in early February.He sees a clear path out of production hell is most revealing,
While before that was not the case
IMO, it would be in the long-term interests of the UAW and its members for it to play nice with Tesla but the UAW doesn't seem to have learned that lesson yet.
Moody’s is a very conservative institution. They have to incorporate risks in their valuations. Risks still exists for Tesla in ramping up their model 3 deliveries. Risks exist in possible early recalls for model 3. These levels of risk don’t exist for many other industries as they do for automobile production.
Agree with it or not, Tesla is a high risk company, in particular due to it being financially aggressive utilizing debt now to achieve hyper growth. It’s fun to rag on Moody’s, but they don’t assume that Tesla will meet its stated objectives without unforeseen setbacks.
As investors, we are certainly free to disagree and believe Tesla will not run into cash crunch issues by meeting or coming close to their deliveries and profit margins for model 3. And like investors, Moody’s doesn’t always get it right, no one does.
What is the possibility of a different union being created? United EV Workers, or United Tesla Workers. I'd say the UAW's interest is in opposition to those of the Tesla factory workers.IMO, it would be in the long-term interests of the UAW and its members for it to play nice with Tesla but the UAW doesn't seem to have learned that lesson yet.
Great article by @Trent Eady on Model 3 profitability:
In Ten Months, Tesla Could Prove Its Critics Wrong About The Model 3 -- Here's The Math - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha
Of course Tesla has real risk in production, recalls, large fire, supplier interruption, competition, recession, etc. Any little thing can interrupt production. Tesla does have certain possibilities to run into unforeseen setbacks. Nobody should under estimate those risks.
But we are talking about a bond-default risk, what is the chance that Tesla bankrupt and default on it's bond? It's near zero.
If you look at the past defaults, look at what the major shareholders did before default. They either sold their shares or bought CDS (default insurance), or they put money into a hedge fund which short their own stock. I have observed this in the past.
Think about what is the chance that Elon secretly bought Tesla CDS, then announce Tesla's bankruptcy. Elon would rather die instead of cheating his supporters like that. That's why if the worst happens, Tesla will be sold to other companies instead of bankruptcy. People who don't understand this probably shouldn't invest in Tesla. Moody's either doesn't understand this, or wants to hurt Tesla at a critical moment. I can't tell which one.
On the other hand, let's look at those legacy car makers. They are selling record number of ICE cars with healthy margin. They have billions of cash (just like Citibank in 2007). So their bonds deserve high rating. Right? I say that's the wrong way to look at it. Car industry is going through a major transition, near the turning point. They are not in a good position to handle this transition. Let's look at this scenario: Someone bought bond from a legacy car maker. Moody's said it's very safe based on their cash reserve and healthy cashflow. Outlook stable. In two years, recession comes, the legacy car maker starts to accumulate debt, it's bond dropped price by a lot, the bond buyers can't sell. But it's fine, "everything will go back to normal after recession". Right at this time, the ownership cost of EV dropped below ICE cars. Everyone wants to buy EV with autonomous driving. Next year, the recession is over, the legacy car maker still can't sell it's cars, by year 5, it announced bankruptcy. What's the likely hood of this scenario to happen? I say the chance is quite real. This kind of scenarios happen all the time. Look at how many old phone companies were wiped out by smart phone. Look at how many publishing companies were wiped out by online media.
Did the author estimate how much Net Income will be reported for 4Q18?
An obligor is MORE VULNERABLE than the obligors rated 'BB', but the obligor currently has the capacity to meet its financial commitments. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments.
Someone in the M3 forum said their wife works at tesla and they did 760 M3’s in a day recently....either that’s an amazing leap regardless of sustainability or that poster should be banned. Hoping for the first option.
Both u and the Forbes author have obviously never seen the factory first hand.Moody's is a respected credit agency. When they downgraded TSLA debt, bond prices fell. You can't point at 2007/2008 and say "well, Moody's is worthless."
Moody's does make errors, but they still command market respect.
What In The World Is Tesla Doing? Bizarre Manufacturing Processes Produce Massive Cash Burn
Tesla does not have the capital to build the Model Y AND the Roadster AND the Semi. They've currently promised all three. Even if you believe Musk's "cash flow positive" statement (which you shouldn't), it's still insufficient.
I'm personally stunned by the TSLA stock price; it seems like they're in full crisis mode now. Between continued Model 3 quality issues, a borked production process, multiple impossible promises, autopilot problems, possible SEC violations, and continuing cash burned, Tesla is in trouble.
What is the possibility of a different union being created? United EV Workers, or United Tesla Workers. I'd say the UAW's interest is in opposition to those of the Tesla factory workers.
In early March the same poster said his inside source told him Tesla was shooting to build 3000 Model 3s that week.
In other words, total BS.
When Will Tesla Sustainably Produce 5,000 Model 3's Per Week?
The next day the same poster gave an update (look a bit further in the same thread) that they didn't come anywhere close to that goal... So still checks out. Doesn't mean it's true, but also doesn't mean they are just making stuff up.darn....what is wrong with people.