Let's assume Tesla achieves profitability during Q1 2018 ER - what happens?

[farzyness]

I can't really describe it, but my gut is telling me that Tesla is going to drop a massive bomb in the upcoming ER and announce that they've reached profitability as of the release of the Earning's Report, essentially making every claim that Tesla cannot become profitable with the Model 3 completely null and void. From what I'm seeing they are currently guiding for this to happen in Q3/Q4. What does the group think will happen to the stock price if this were the case? Massive short squeeze? Strong uptick? Nothing?

I know that as investors and analysts, it's always important to temper the gut, but something tells me that May 2018 will be March 2013, 5 years later, especially with the amount of garbage and miss-information that's being thrown at Tesla in its current state.

Am I taking crazy pills?

 

[TheTalkingMule]

Yes.

 

[bdy0627]

I can't really describe it, but my gut is telling me that Tesla is going to drop a massive bomb in the upcoming ER and announce that they've reached profitability as of the release of the Earning's Report, essentially making every claim that Tesla cannot become profitable with the Model 3 completely null and void. From what I'm seeing they are currently guiding for this to happen in Q3/Q4. What does the group think will happen to the stock price if this were the case? Massive short squeeze? Strong uptick? Nothing?

I know that as investors and analysts, it's always important to temper the gut, but something tells me that May 2018 will be March 2013, 5 years later, especially with the amount of garbage and miss-information that's being thrown at Tesla in its current state.

Am I taking crazy pills?

Not going to happen. For the best answer to this, take a look at the thread on Q12018 Earnings by @luvb2b

 

[defc0n]

There is a 0% chance of this happening.

 

[neroden]

I can't really describe it, but my gut is telling me that Tesla is going to drop a massive bomb in the upcoming ER and announce that they've reached profitability as of the release of the Earning's Report, essentially making every claim that Tesla cannot become profitable with the Model 3 completely null and void. From what I'm seeing they are currently guiding for this to happen in Q3/Q4. What does the group think will happen to the stock price if this were the case? Massive short squeeze? Strong uptick? Nothing?

(a) I really don't think this is going to happen. My numbers say profit doesn't arrive until Q3 (possibly Q2 if things go really well).
(b) Because there's a large accounting change in Q1, the short-sellers will claim that any profit is just due to the accounting change and ignore it.

How's that for a wet blanket? ;-)

 

[justvisiting]

I can't really describe it, but my gut is telling me that Tesla is going to drop a massive bomb in the upcoming ER and announce that they've reached profitability as of the release of the Earning's Report, essentially making every claim that Tesla cannot become profitable with the Model 3 completely null and void. From what I'm seeing they are currently guiding for this to happen in Q3/Q4. What does the group think will happen to the stock price if this were the case? Massive short squeeze? Strong uptick? Nothing?

I know that as investors and analysts, it's always important to temper the gut, but something tells me that May 2018 will be March 2013, 5 years later, especially with the amount of garbage and miss-information that's being thrown at Tesla in its current state.

Am I taking crazy pills?

you should probably let someone else handle your money.

 

[Yggdrasill]

Expect a significant loss in Q1. I'm more hopeful about Q2, but wouldn't bet on it.

 

[Zythryn]

Tesla has been burning tons of cash.
Getting the production line in order, overtime, continuing to expand service centers, super chargers, factory and warehousing.

There is zero chance they will be profitable barring some accounting change which wouldn’t be meaningful.

 

[farzyness]

So it appears people misunderstood what I attempted to explain - apologies.

There's a certain Model 3 production threshold that will make Tesla cash-flow positive (i.e. achieving profitability), meaning that every car built after this threshold will be sold at a 'profit', not a loss. My gut is telling me that the threshold will be crossed sometime in the coming days, setting up nicely for an announcement in time for the ER. So for example, if that threshold is 2,500 Model 3s a week and that threshold is crossed say on Friday of this week, every week thereafter will imply that Tesla is profitable.

If this were the case, I foresee Tesla using this bit of information as the leading point for the ER, essentially guaranteeing profitability in Q3, maybe Q2.

 

[schonelucht]

So it appears people misunderstood what I attempted to explain - apologies.

Tesla cash-flow positive (i.e. achieving profitability)

Profitability and cash flow positive are two totally different concepts.

meaning that every car built after this threshold will be sold at a 'profit', not a loss. My gut is telling me that the threshold will be crossed sometime in the coming days, setting up nicely for an announcement in time for the ER.

Giving allowance for your very basic confusion between fundamental concepts, I still think your gut feeling is totally off base. Please run some real numbers based on past 10-Qs and let us know what your really mean.

 

[farzyness]

Apologies for attempting to run an idea thru a public forum.

 

[TradingInvest]

Both Q1 and Q2 of 2018 will see huge losses. That's how the ramp works in capital intensive business.

 

[Krugerrand]

So it appears people misunderstood what I attempted to explain - apologies.

There's a certain Model 3 production threshold that will make Tesla cash-flow positive (i.e. achieving profitability), meaning that every car built after this threshold will be sold at a 'profit', not a loss. My gut is telling me that the threshold will be crossed sometime in the coming days, setting up nicely for an announcement in time for the ER. So for example, if that threshold is 2,500 Model 3s a week and that threshold is crossed say on Friday of this week, every week thereafter will imply that Tesla is profitable.

If this were the case, I foresee Tesla using this bit of information as the leading point for the ER, essentially guaranteeing profitability in Q3, maybe Q2.

The threshold for profitability is 5k/wk according to Elon. He told the world that months ago. Granted he could be off a bit; 4367/wk or 5122/wk. But he wouldn’t be off by 2500/wk.

 

[ShortSeller]

Mark me down for a loss of $1B+ on the quarter.

 

[omgwtfbyobbq]

Mark me down for a loss of $1B+ on the quarter.

What makes you think losses would increase by 50% compared to last quarter even after they increased sales by 50%?

 

[EVMeister]

What makes you think losses would increase by 50% compared to last quarter even after they increased sales by 50%?

He's a "glass half empty" kind of guy. Or perhaps a "that glass could smash and then there'd be nothing left" kind of guy.