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How Does Bloomberg's Cory Johnson get Away with Being so Anti-Tesla?

mdevp

Member
Sep 30, 2014
538
87
nj

jbdoom

Member
Mar 18, 2015
10
0
NYC
the same way any news channel gets away with not being objective. bloomberg isn't that much different then say the folks on CNBC..
 

McMuggets

Member
Dec 28, 2014
458
303
North America
Cory Johnson also tweets his Tesla hate all the time. Over time you see the history he has with Tesla and you start seeing a systematic pattern. He also uses his words to make things sound worse than they are. Consider it a gift that allows you to purchase shares for a lower price.
 

Johan

Ex got M3 in the divorce, waiting for EU Model Y!
Feb 9, 2012
7,473
9,545
Drammen, Norway
"News" networks only exist anymore to fill the time in between commercials with "content" or are tools by which to effect and shape public thinking (Fox news) by political entities (by this I mean special interest, the only real political force in the US).
 

Johan

Ex got M3 in the divorce, waiting for EU Model Y!
Feb 9, 2012
7,473
9,545
Drammen, Norway
Well, whatever you think of him, two of his latest TSLA tweets have been spot on imho:

Cory Johnson on Twitter:

Cory Johnson on Twitter:

How can any serious analyst keep lowering EPS etc. for months without adjusting price targets?

And if PTs were touched, there were only cosmetic adjustments.

Uhm, because valuation of a stock is about more than a myopic view on short term earnings (next quarter)? But in your world I suppose investing to grow = burning cash (implied that could have been extracted from the business to create the holy grail of positive EPS).
 

Electroman

Supporting Member
Aug 18, 2012
6,142
6,225
TX
TFTF and others bears pretend as if they don't understand some basic things like:

- spending for infrastructure for growth is the right thing to do for an young company like Tesla. So keep parroting that Tesla will be bankrupt in two quarters might be a great click bait, but investors - as you can see the run today - are rightly ignoring that nonsense.

- and every move and every EV that is announced or even imagined by any automaker does not automatically become a Tesla killer.

That is why the likes of TFTF, Anton W, LT, Cory J and others bears are now a laughing stock.

Nothing wrong in pointing out the stock is overvalued - and I think it is. But the reasons you guys are repeating over and over again just doesn't cut it

Not that they are ignorant, just being disingenuous and hoping you will pull some longs alone with you.
 

electracity

Active Member
Jun 8, 2015
4,028
2,531
60606
...........
Nothing wrong in pointing out the stock is overvalued - and I think it is. But the reasons you guys are repeating over and over again just doesn't cut it

Not that they are ignorant, just being disingenuous and hoping you will pull some longs alone with you.

If you think Tesla is overvalued, you are a bear.
 

tftf

Member
Sep 19, 2013
811
-60
Hop Sing Laundry
- spending for infrastructure for growth is the right thing to do for an young company like Tesla. So keep parroting that Tesla will be bankrupt in two quarters might be a great click bait, but investors - as you can see the run today - are rightly ignoring that .

Where did I write TSLA will go bankrupt in two quarters?

They won't as long as Wall Street provides them with new money (either more dilution or more debt, I doubt it's much of the latter going forward since they already securitized assets in mid-2015).

Tesla will need a lot of fresh money in 2016 imho to keep burning cash (or "investing heavily in the future", if you prefer a bullish term).

As soon as the heavy Model X cap-ex rounds are over, a lot of Model 3 R&D and then tooling will kick in by 2016-2018.

There is no free lunch in the car industry, it's constant heavy cap-ex, especially if TSLA wants to keep growing in the double digits.

Also note that Tesla only spent 10-20% (of the entire $2 bn raised in early 2014) on the actual GF project in Nevada (and the rest of that money is already gone, Tesla already raised new money in mid-2015). They will also need to raise more money to get to full GF output levels announced for 2020. Remember that cell production in the GF will only start in late 2016 (stationary cells) or 2017 (EV cells), that's the cap-ex intensive process. And knowing Tesla, these dates could very well slip again...

- - - Updated - - -

Uhm, because valuation of a stock is about more than a myopic view on short term earnings (next quarter)? But in your world I suppose investing to grow = burning cash (implied that could have been extracted from the business to create the holy grail of positive EPS).

It's not about one quarter. It's about many quarters in 2014 and 2015.
 
Last edited:

austinEV

Supporting Member
May 16, 2013
3,231
7,352
Austin
Where did I write TSLA will go bankrupt in 2 quarters?

They won't as long as Wall Street provides them with new money (dilution or debt, I doubt it's the latter going forward since they already securitized assets).

Tesla however will need a lot of fresh money in 2016 to keep burning cash (or "investing heavily in the future", if you prefer a bullish term).

As soon as the heavy Model X cap-ex rounds are over, a lot of Model 3 R&D and then tooling will kick in by 2016-2018.

There is no free lunch in the car industry, it's constant heavy cap-ex, especially if TSLA wants to keep growing in the double digits.

Also note that Tesla only spent 10-20% of the entire $2 bn raised in early 2014 on the actual GF project in Nevada (and the rest of that money is already gone, Tesla raised new money in mid-2015). They will need to raise more money to get to full GF output levels announced for 2020.

Even if you are right, so what? They are profitable on an operating basis. Do you accept the basic fact that if they stopped all investment in charging network, new models, new factory capacity they would be very profitable? They don't do that, and shouldn't, because they are building for future growth.

They are supposed to be spending the capital raised on this investment. If you want to argue it has been squandered, do that. They are not spending it on bonuses and CEO pay. The worst you can say, and here you can fill in the bear case, is that they spent too much on charger/service center infrastructure or the model X. That is your argument, explain that to us. But to just say they raised money and spent it is falling on deaf ears.

The GF money we care about most in the next few quarters comes from Panasonic anyway. So if you want to argue that Panasonic doesn't have the money to build out the equipment inside the building, or cannot raise it lets hear that.

If they are in fact squandering raised money on the *wrong* investments, then I would expect that the secondary underwriters would have harsh questions about that. Until that happens I expect the answers are good. The money being spent is on valuable investments, but maybe not the expected columns as you suggest. so what?

Sure they will raise capital and continue to do so. SO WHAT? Explain why investing other people's money in factories and other capacity is a bad thing?
 

Johan

Ex got M3 in the divorce, waiting for EU Model Y!
Feb 9, 2012
7,473
9,545
Drammen, Norway
I don't want to get too philosophical but let's take a much more basic view: Here's world GDP in the last centuries:

30f7fd9ace53e02ecc1e408c3dd75f54.jpg


How was all this wealth created? Quite a bit from population increase but most of it from real economic growth, that in turn is made possible by development of new and better technology and the steady and aggressive deployment of most of the wealth created in further growth, the latter in bullish terms known as investments.
 

Familial Rhino

Endangerous Herbivore
Feb 27, 2014
1,555
5,122
Toronto, ON
It's not about one quarter. It's about many quarters in 2014 and 2015.
And I, for one, think it's about many quarters in 2017 and beyond.

Really, that's all this argument is about. Will they make it through the next few years while they invest (you say "burn") cash like crazy to build the foundations for future growth? You seem to argue they won't, or even if they will, they will wake up to a world full of electric BMWs and Chevy Bolts in which Tesla won't be able to maintain margins. Whereas many of us think they will make it, that the world is a big enough place for all competent EV manufacturers, old or young, and that Tesla can maintain their margins because they will continue to out-innovate the competition.
 

McMuggets

Member
Dec 28, 2014
458
303
North America
Even if you are right, so what? They are profitable on an operating basis. Do you accept the basic fact that if they stopped all investment in charging network, new models, new factory capacity they would be very profitable? They don't do that, and shouldn't, because they are building for future growth.

They are supposed to be spending the capital raised on this investment. If you want to argue it has been squandered, do that. They are not spending it on bonuses and CEO pay. The worst you can say, and here you can fill in the bear case, is that they spent too much on charger/service center infrastructure or the model X. That is your argument, explain that to us. But to just say they raised money and spent it is falling on deaf ears.

The GF money we care about most in the next few quarters comes from Panasonic anyway. So if you want to argue that Panasonic doesn't have the money to build out the equipment inside the building, or cannot raise it lets hear that.

If they are in fact squandering raised money on the *wrong* investments, then I would expect that the secondary underwriters would have harsh questions about that. Until that happens I expect the answers are good. The money being spent is on valuable investments, but maybe not the expected columns as you suggest. so what?

Sure they will raise capital and continue to do so. SO WHAT? Explain why investing other people's money in factories and other capacity is a bad thing?


Fully agree with your comments here. People like Cory Johnson completely forget or discount the network of charging stations and the Gigafactory build as if these are worth $0. Tesla is trading their cash profits and them some for actual infrastructure and hard-assets, that would only cost more later on to build. Whenever I hear "Tesla is losing X dollars per car sold", it just goes to show media catch-phrases trump actual journalism in this day and age. I wonder how profitable any other car company would be if they were in charge of building and maintaining their own network of refuelling stations? What if they were also building their own energy factory to make the fuel used in their own cars?

Another thing that Tesla doubters forget to think about is that Tesla is going to be making more batteries for EV's and storage than the whole world currently produces. When VW moves to electrify their cars, as they've announced, by 2020.... they're going to have a tough time finding batteries arranged and configured in a way that is as reliable and cost-effective as Tesla's batteries. Ditto for any other car manufacturer trying to get into the EV game. Tesla will have lithium mines locked up (two deals signed for huge reserves in Nevada already, more to come likely) as well as the worlds biggest factory to produce these batteries. Even if the Model 3 didn't sell well, I'm sure VW etc. would love to buy some Tesla batteries for their Jetta Electric.
 

AB4EJ

Member
Feb 25, 2015
771
377
Tuscaloosa, AL
Tesla spending on building infrastructure and investing in new plant equipment certainly shouldn't count against them; however, my impression is that their warranty costs must be quite high due to all the motor change-outs and high-end service (although one could argue that the customer good will is more than worth the cost of the service - still, warranty costs are probably still too high).

What is the bottom line? That Tesla is a risky stock to own? Maybe so; but I also bought a lot of GM stock in the period 1976 - 1986, which all eventually became worthless.
 

Drax7

Active Member
May 18, 2013
2,073
4,695
Florida
"News" networks only exist anymore to fill the time in between commercials with "content" or are tools by which to effect and shape public thinking (Fox news) by political entities (by this I mean special interest, the only real political force in the US).

strongly disagree with your political views , so stop
 

McMuggets

Member
Dec 28, 2014
458
303
North America
Tesla spending on building infrastructure and investing in new plant equipment certainly shouldn't count against them; however, my impression is that their warranty costs must be quite high due to all the motor change-outs and high-end service (although one could argue that the customer good will is more than worth the cost of the service - still, warranty costs are probably still too high).

What is the bottom line? That Tesla is a risky stock to own? Maybe so; but I also bought a lot of GM stock in the period 1976 - 1986, which all eventually became worthless.

Check page 3 of the follow shareholder letter for Q3 2015:

http://files.shareholder.com/downloads/ABEA-4CW8X0/261108236x0x858516/F50A9FAF-BA73-4263-8E16-DE1FAC0BABDF/Q3_15_Shareholder_Letter.pdf


Here you will read that warranty reserves are in line with their estimates and they are doing fine with that. As well their service revenue increased to $84M and margins increased to 9%. Basically, warranty and service are a non-issue. Notably, they are selling more of their pre-owned cars than they are adding... thus they have 17% less pre-owned cars to sell now since demand has been so high.
 

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