Hi, I’m a short seller

[seattlite2004]

Here ya go, no need to argue the short side anymore, Bloomberg has done a nice summary. Cute animation too. FUD machine is kicking into high gear now, shorts scared?

Tesla Doesn’t Burn Fuel, It Burns Cash

 

[eye.surgeon]

When I see multiple legitimate major financial news organizations questioning Musk's claim that there is no pending cash shortage, it makes me suspect now is a great time to short Tesla.

Love my car last 3.5 yrs, but always bemused (and recently alarmed) by the chaotic finances of the company. I wouldn't buy another Tesla in this environment. I want to see positive cash flow first before I buy something that will require many years of warranty and service infrastructure. Just ask Fisker Karma owners how that goes.

 

[bambam4171]

When I see multiple legitimate major financial news organizations questioning Musk's claim that there is no pending cash shortage, it makes me suspect now is a great time to short Tesla.

Love my car last 3.5 yrs, but always bemused (and recently alarmed) by the chaotic finances of the company. I wouldn't buy another Tesla in this environment. I want to see positive cash flow first before I buy something that will require many years of warranty and service infrastructure. Just ask Fisker Karma owners how that goes.

Come on, comparing Tesla to Fisker? That is a bit like comparing Salieri to Mozart. In German there is a saying: Er hat sich Mühe gegeben. Basically meaning he really tried but was nowhere up to the task.

We all know Tesla will never go under, if need be Silicon Valley will put it back on the track. No matter how many billions of short money are betting against it, there are too many people with too much money and an extremely loyal customer base that will keep it rolling.

 

[eye.surgeon]

That's an optimistic, some would say unrealistic, view and I sincerely hope you are right.

 

[cpa]

I have seen so many financial statements over the past forty years that I rarely look at one these days. I start developing nervous tics much like Herbert Lom every time Peter Sellers would wander into his office.

Here is my question: If Elon Musk were to announce tomorrow that Tesla Motors were liquidating, thus changing its balance sheet to fair value instead of historical costs, what would the liquidation balance sheet look like? I bet the total liquidating value of its recorded tangible and intangible assets plus the value of its unrecorded intangible assets clearly surpasses its debt obligations, if we assume a willing buyer with unlimited cash who wants all of Tesla's assets.

It is not clear just how much this liquidating value of Tesla Motors is. But I would guess that the future value of these assets plus the added time value as Tesla marches inexorably onward is much greater than the current market price for its stock.

 

[anticitizen13.7]

When I see multiple legitimate major financial news organizations questioning Musk's claim that there is no pending cash shortage, it makes me suspect now is a great time to short Tesla.

No, the time to short Tesla (which I don’t advise) is when the momentum traders are pushing the stock sky high, and the media is acting like Elon can do no wrong. Summer of 2014 and Summer of 2017 are two examples.

Short term trading requires one to be capable of going against prevailing sentiment in the markets. Most people are emotionally incapable of doing it, because they get scared at the wrong time and become roadkill for bot traders. This is why many Bulls here at TMC have gotten destroyed, and many Bears destroyed even worse.

I avoid actively trading. I believe that the only people who can successfully do it consistently are those with psychopathic tendencies.

 

[TaoJones]

I avoid actively trading. I believe that the only people who can successfully do it consistently are those with psychopathic tendencies.

*mutters something about chianti, fava beans, it putting the lotion on its skin, and about sensible options plays being a great alternative to traditional "active" trading*

 

[mongo]

I have seen so many financial statements over the past forty years that I rarely look at one these days. I start developing nervous tics much like Herbert Lom every time Peter Sellers would wander into his office.

Here is my question: If Elon Musk were to announce tomorrow that Tesla Motors were liquidating, thus changing its balance sheet to fair value instead of historical costs, what would the liquidation balance sheet look like? I bet the total liquidating value of its recorded tangible and intangible assets plus the value of its unrecorded intangible assets clearly surpasses its debt obligations, if we assume a willing buyer with unlimited cash who wants all of Tesla's assets.

It is not clear just how much this liquidating value of Tesla Motors is. But I would guess that the future value of these assets plus the added time value as Tesla marches inexorably onward is much greater than the current market price for its stock.

Based on the 2017 year end statement, there was 4.27 billion in shareholder equity (all tangible) so with 167 million shares, that comes out to around $25 a share, if all the assets are liquidated at 100% declared value and all expenses paid. You can run other percentages/ IP valuation from there.
TIL: the equity line is why the asset and liability totals are the same (because it is the difference).

 

[Unpilot]

I buy and hold...I'm a long for sure.

I'm 62 my son is 22 daughter 14 ( I know but it is so worth having them)

We either get this right...or leave them a hellish place to try and scrape out a living.

Pure financial analysis seems to me to miss the point entirely.

 

[cpa]

Based on the 2017 year end statement, there was 4.27 billion in shareholder equity (all tangible) so with 167 million shares, that comes out to around $25 a share, if all the assets are liquidated at 100% declared value and all expenses paid. You can run other percentages/ IP valuation from there.
TIL: the equity line is why the asset and liability totals are the same (because it is the difference).

Mongo, thank you. Not sure if your response answers my question, though; and I don't know what IP value is.

Does this year-end statement value all of Tesla's assets at net realizable value instead of GAAP historical costs less accumulated depreciation? And I am positive that any off balance sheet intangible assets are not accounted for, and I wonder just how much those would be worth to a prospective buyer.

 

[mongo]

Mongo, thank you. Not sure if your response answers my question, though; and I don't know what IP value is.

Does this year-end statement value all of Tesla's assets at net realizable value instead of GAAP historical costs less accumulated depreciation? And I am positive that any off balance sheet intangible assets are not accounted for, and I wonder just how much those would be worth to a prospective buyer.

I wasn't sure if it addressed your question either, but I figured it could at least include a link to the raw data. I am out my depth here regarding the accounting practices. My mom was an accountant and worked with the CPAs, I'm just an engineer.

 

[Electroman]

@danahull - is that really your article?

Bulls and neutral observers turning bearish is par for the course. But this has very cheesey graphics to start with, fit for an yellow journal. Every sentence drips with exaggeration and FUD. I am not questioning the main theme of the article that Tesla is spending a lot of cash that it needs to bring it in check, but the whole article including the headlines is so clickbaity and does not rise above Seeking Alpha quality.

I expected much better from Dana.

This is more like what we would expect from Dana Hull. Reasoned, fact based, no hyperbole and no dramatization. This one is a video.

Tesla Doesn't Burn Fuel, It Burns Cash

 

[rocketlow49]

What’s “Supercharger Revenue” on a vehicle with a lifetime of free supercharging? I may have barely passed the CPA (hung over), but to me that’s a lifetime of expenses paid by Tesla.
But to be fair, I recognize the Supercharger network as a “moat” for now.

I see the Supercharger as a lifetime marketing investment in more ways than one way. I think you can figure out what I am talking about. The return on this investment would have likely to be predicted to be positive by their team for them to invest so heavily.

 

[rocketlow49]

Hello All: As my name suggests, I have made a bet against Tesla via long dated put options. I look forward to a healthy discussion from all sides.

Your argument is mostly logical throughout this thread. However as you may have already seen and know, SP for stocks especially for TSLA does not always follow logic. Tesla is a cultish brand. People like cheering for the underdog. Wanting the underdog to win is illogical. The only way for Tesla to fail is if people stop becoming fans of the company. Hence why short sellers are investing so much time and money to get people to turn against Tesla. FUD and Fake news is their weapon. And any good news is spun around as negative.

As long as people believe in their mission, and they continue to churn out products that are loved, people will continue to cheer for their underdog. And that is how they will win in the long-run.

 

[Electroman]

Hence why short sellers are investing so much time and money to get people to turn against Tesla. FUD and Fake news is their weapon. And any good news is spun around as negative.

Buyers win when the company succeeds. They do whatever they can for them to win

Sellers win when the company succeeds. They do whatever they can for them to win

Shorters win when the company fails and fails miserably. They do whatever they can for them to win

For them to win, the tools in their arsenal are: lies, fake news, fake law suits, bandying with other outfits that want the company to die such as UAW, Auto dealers, Greenie haters, Oil lobby, Kotch brothers.

Today's hit piece in CNN is about Cobalt and Congo. Front page with a catchy Gif to boot.

 

[mongo]

Shorters win when the company fails and fails miserably. They do whatever they can for them to win

True for underwater shorts that bought in long ago. Shorts from the $100 days need TSLA down so low that it would likely fail.

However, short term shorts can profit from a correct determination that the SP is higher than is supportable. Shorting at $380 and closing anywhere below that would be profitable and not require Tesla to fail. (reversing the order of buy low sell high).

 

[bambam4171]

Today's hit piece in CNN is about Cobalt and Congo. Front page with a catchy Gif to boot.

I wonder why there is no Oil spill gif beside that. Should we propose some?

How about

or

or

Or maybe this one?

 

[mongo]

Today's hit piece in CNN is about Cobalt and Congo. Front page with a catchy Gif to boot.

Related to that:

So in the land of FUD and shade, "Is there such a thing as an ethical electric car?"
Carmakers and big tech struggle to keep batteries free from child labor
Which references the same 2016 Amnesty International report as this 2016 article:
Several automakers and battery makers accused of using cobalt sourced by child labor in Congo
The Amnesty report leaves Tesla out of the Cobalt issue due to getting batteries from Panasonic (who gets Cobalt from the Philippines). Slightly muddying the waters is Tesla later getting cells from Samsung (Hornsdale) along with a potential agreement (in 2015) with LG Chem (which I don't think went anywhere [per @ggr they may have been used in Roadster 3.0 pack]).
Earlier this year, Tesla was in talks to secure another non-DRC source of Cobalt.
Tesla Has Found Yet Another Safe Haven For Cobalt Mining

 

[Reality]

Bulls,

Inside EVs has model 3 deliveries for US during the month of April at 3,875.

The in transit number at the end of Q1 for M3 was 2,040.


Assuming inside EVs is correct.


How is this possible?


edited to replace NA with US, this doesnt include Canada

 

[Zythryn]

Bulls,

Inside EVs has model 3 deliveries for NA during the month of April at 3,875.

The in transit number at the end of Q1 for M3 was 2,040.


Assuming inside EVs is correct.


How is this possible?

Assuming they are correct, my first guess would be that the 4-5 days of downtime ran over. In addition, once it was up and running again, it wasn't running at full speed. Alternatively, we know a number of Canada invites went out, so it is possible many deliveries were routed there and Inside EV's missed those.
We should find out more tomorrow.