Just because "Feature Complete" is delayed doesn't mean there won't be more revenue released. For example, they could release responding to stop signs/lights to recognize a little more. Or Autopark. Or just retrofitting HW3 in cars should allow some release.
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Shall TSLA be added to S&P500? (out of main)
- Thread starter Fact Checking
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Just because "Feature Complete" is delayed doesn't mean there won't be more revenue released. For example, they could release responding to stop signs/lights to recognize a little more. Or Autopark. Or just retrofitting HW3 in cars should allow some release.
thought this was an interesting post to add to the discussion. Not quite sure it will change the math for S&P 500 addition since it sounds like Tesla will have to be "signifcantly profitable" according to The Accountant just to realize these.
Will be interesting if Tesla can squeeze out just enough GAAP profit in Q1 and be able to take these. Might be a stretch for Q1 eligibility, but something to keep an eye out for.
Will be interesting if Tesla can squeeze out just enough GAAP profit in Q1 and be able to take these. Might be a stretch for Q1 eligibility, but something to keep an eye out for.
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It’s worth reiterating that the S&P committee usually take a few months to get around to adding even a mega cap stock after it meets their consideration criteria. My own base case is Tesla meets S&P criteria in quarter ending June 2020 (Q2) Reports on it in July. Then added to S&P in September.
Buckminster
Well-Known Member
Doggydogworld
Active Member
Geez. Tesla will bank that deferred FSD revenue for a good quarter, not waste it on Q2.
I don't really see how you can recognize any revenue for features still in beta. Are any of the older FSD features out of beta, yet, according to the manual?
I don't really see how you can recognize any revenue for features still in beta. Are any of the older FSD features out of beta, yet, according to the manual?
Everything is Beta:
From Model 3 Manual
Note: The AUTO setting is currently in BETA [wipres]
Note: Traffic-Aware Cruise Control is a BETA feature.
Note: Autosteer is a BETA feature
Note: Navigate on Autopilot is a BETA feature and is not available in all market regions
Warning: Summon is a BETA feature.
Warning: Smart Summon is a BETA feature.
It seems Macy's just got thrown out of S&P500. How does this system work, does it mean that there is a spot open on the list for another company to qualify?
It was replaced with Carrier Global.-
From the rules Doc https://us.spindices.com/documents/methodologies/methodology-sp-us-indices.pdf
mblakele
FSD Beta (99)
This seems to be a good summary:
Macy's to drop from S&P 500 to small-cap index
(Reuters) - Macy's Inc (M.N) will be removed from the benchmark S&P 500 stock index .SPX, the S&P Dow Jones Indices said on Tuesday, as coronavirus-induced store closures compound the retail sector's struggles with a shift to online shopping.
The company’s shares have plunged more than 70% so far this year, leaving Macy’s with a market value of $1.52 billion as of Tuesday’s close, according to Refinitiv IBES data.
“Macy’s has a market capitalization more representative of the small-cap market space,” S&P said, adding that the company would become part of the S&P small-cap 600 index, effective April 6.
[...]
Macy’s will be replaced in the S&P 500 by air conditioning company Carrier Global Corp CARR_w.N.
Carrier was spun out last month by United Technologies in a bid to shed assets to complete its merger with Raytheon Co (RTN.N).
That deal is expected to close on April 3.
Raytheon will be replaced in the S&P 500 by United Technologies’ elevator unit Otis Worldwide Corp OTIS_w.N, according to a statement from the S&P Dow Jones Indices.
The company’s shares have plunged more than 70% so far this year, leaving Macy’s with a market value of $1.52 billion as of Tuesday’s close, according to Refinitiv IBES data.
“Macy’s has a market capitalization more representative of the small-cap market space,” S&P said, adding that the company would become part of the S&P small-cap 600 index, effective April 6.
[...]
Macy’s will be replaced in the S&P 500 by air conditioning company Carrier Global Corp CARR_w.N.
Carrier was spun out last month by United Technologies in a bid to shed assets to complete its merger with Raytheon Co (RTN.N).
That deal is expected to close on April 3.
Raytheon will be replaced in the S&P 500 by United Technologies’ elevator unit Otis Worldwide Corp OTIS_w.N, according to a statement from the S&P Dow Jones Indices.
EVNow
Well-Known Member
To get to 4 quarter profitability after Q2 - Tesla needs this quarter to be no worse than 248M loss and Q2 to be profitable. May not be that easy.
OTOH, does S&P inclusion really matter - now that SP has broken out ?
OTOH, does S&P inclusion really matter - now that SP has broken out ?
Artful Dodger
"Neko no me"
adiggs
Well-Known Member
In my opinion, yes it matters. Inclusion in the S&P 500 index will bring a whole pile of new owners into the company, both the index funds and also other funds that compare themselves to the index. This additional pile of new owners will also bring scrutiny to the company - the company itself, as well as trading shenanigans (as well as deeper pockets to take advantage of things like the MMD).
The net result I believe will be less volatility, and a less manipulable share price. I also think there will be an initial spike in the share price, but the primary benefit will be a less manipulable share price.
Judging from the lack of posts on this thread, I guess everyone's of the opinion that Q1 S&P500 inclusion is now off the table? How about Q2?
My thinking is that Q3 is off the table as well (due to model Y tooling costs being amortized affecting GAAP losses in Q1 and Q2):
Prediction Thread - "You Called It"
We don't have to worry about demand, since all the cars produced will eventually get sold, it's the fact that we've lost almost 7 weeks of production (~50k cars), while still paying people's salaries (opex), that's the pain point.
So if Q4 is the most likely time to be GAAP profitable over 4 quarters, does that push S&P inclusion into Mar '21?
My thinking is that Q3 is off the table as well (due to model Y tooling costs being amortized affecting GAAP losses in Q1 and Q2):
Prediction Thread - "You Called It"
We don't have to worry about demand, since all the cars produced will eventually get sold, it's the fact that we've lost almost 7 weeks of production (~50k cars), while still paying people's salaries (opex), that's the pain point.
So if Q4 is the most likely time to be GAAP profitable over 4 quarters, does that push S&P inclusion into Mar '21?
I assume from "Q1 is off the table" that you are referring to inclusion based on performance in that quarter. Since it is no longer Q1 and Tesla wasn't added, it's certainly off the table, if you meant it the other way.
If Tesla somehow manages a big GAAP profit (~$260M from memory) from Q1, it will be included during Q2, except that I read somewhere that I can't find any more that S&P said they weren't going to adjust the indexes until COVID dust settles. In any case I think this is unlikely.
Any profit at all for Q2 that makes up any loss that happens in Q1 would guarantee inclusion. In fact it would have to be a big loss in Q1 before that mattered; the important thing is just that the most recent quarter has to be a profit. Still, with COVID, I find it unlikely that Q2 will be GAAP profitable.
Q3 resulting in a profit would depend on just how bad Q1 and Q2 are. My belief is that with Fremont back on line and Model Y shipping, it's quite likely that it would be enough, hence inclusion in about the November timeframe.
Failing that, almost certain inclusion after Q4, around Feb next year.
Yes, I meant Q1 was off the table, based on the quarter's performance - with 20k more cars produced than delivered, that's a cost-of-goods of roughly $400M! That's too much of a shortfall for the revenue from ~90k sales to cover.
I think we agree with the other 3 quarters, except that I'm _certain_ that Q2 won't be GAAP profitable. OPEX is about $1B per quarter, so revenue has to be at least $5B to generate enough gross profit to cover that. With an entire month's production being offline, there's just not enough supply to generate that revenue. Throw in model Y ramping costs, and there's no silver lining left, even with regulatory credits.
TheTalkingMule
Distributed Energy Enthusiast
A lot of zombie companies are laying off huge chunks of employees and the fossil industry alone should see tons of failures over the next few weeks/months.
Does the departure of these companies move up the S&P inclusion timeline at all? The 1Q profit makes this a lock for whenever S&P resumes normal operations. End of May perhaps?
Does the departure of these companies move up the S&P inclusion timeline at all? The 1Q profit makes this a lock for whenever S&P resumes normal operations. End of May perhaps?
Tesla needs (and any company) needs a profit in the most recent quarter (will need to be Q2) for inclusion to happen
TheTalkingMule
Distributed Energy Enthusiast
That's what I'm wondering here. Will S&P want to avoid looking even more foolish and jump in before 2Q earnings? GAAP profit in 1Q technically makes TSLA eligible, no?
If they wait past June then they're waiting til what......November? TSLA market cap could be sniffing at $200B by then, and that makes for an awkward inclusion ceremony. "America's most valuable industrial company and largest automotive manufacturer in the world is just now being included?"
No, it doesn't because the last 4 quarters don't sum up to be profitable. We need Q2 to be profitable for TSLA to qualify.
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