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Short-Term TSLA Price Movements - 2016

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SBenson

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May 22, 2014
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Benson
I disagree. IMO when they start producing the MX in quantity and if they hit guidance and when TE starts making a substantial contribution, and they get the capital they need I think we could see a new high.

OTOH if they continue to have production problems and don't have a good cash flows it will probably get ugly.

I agree with Mitch's view. The biggest problem facing TSLA right now is lack of credibility on execution. Show the numbers for a quarter or two, the stock will blow past ATH. Just mere verbal assurances that X is on track or it is finally fixed up won't buy much. Because they misused verbal credibility over last few quarters over X. Same with run-rates. It has to be actual deliveries, with real $s, then it's undeniable.
 

austinEV

Supporting Member
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May 16, 2013
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Can you explain to me the big difference between guiding for 85k and deliver 80k versus guiding for 75k and deliver 80k? I don't see it, it is just a number to Wall Street, what matters is how the company is growing.

About $10B in market cap. Otherwise, no difference. /grumble. I don't buy the "it motivates the team" argument. I think people are completely comfortable with the concept of internal vs public goals, and the fun of beating public goals.

Agreed. It's hard to argue that he isn't a fantastic salesman, so even if the quote is legend and not actually true, I was fine semi corroborating it.

(coffee spit take) Really? We are accepting the canard that Elon is a great salesman? Elon is a below average salesman. He has trouble staying on message, he isn't a good speaker, and frequently doesn't really regard the views of the audience-- favoring his own. If he successfully sells products and ideas, it is because those products and ideas are SO GOOD that they transcend his poor presentation. Elon is many things, but "Salesman" is not one of them.
 

SBenson

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May 22, 2014
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Benson
He's pushing capital markets like everything else. We know his goals, but none say anything about maximizing share price. If you consider his goal to switch to renewables and electric cars as soon as possible then keeping a high investment rate to support rapid / reckless growth is right on target.

Capital is to be used. There is little difference between 4% dilution or 5% to Musk.

It is not about 4% vs 5%. Market is already talking about 11% dilution:

Tesla Needs Billions to Meet Musk's Ludicrous Assembly Timeline

If the cards were played right, it would have been indeed 4 or 5% or much less as a matter of fact. Sometimes patience is a virtue. You can't come and ask market for more money when you are struggling with the current project. It's just not right. I am personally very disappointed with this poor play of cards. Julian and I have been crying off of rooftops that talking about accelerated plans and big expenses ahead of model X ramp success is an "unforced error". Nevertheless Tesla did exactly that!
 
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Familial Rhino

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Feb 27, 2014
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(coffee spit take) Really? We are accepting the canard that Elon is a great salesman? Elon is a below average salesman. He has trouble staying on message, he isn't a good speaker, and frequently doesn't really regard the views of the audience-- favoring his own. If he successfully sells products and ideas, it is because those products and ideas are SO GOOD that they transcend his poor presentation. Elon is many things, but "Salesman" is not one of them.
The canard is that his success is due to his salesmanship. That doesn't mean he can't be a good or great salesman.

His style is certainly not slick, but that hasn't stopped him from being effective. His stuttering delivery is endearing to many and comes across as genuine, which is a breath of fresh air in a communications world ruled by PR-speak. The most effective salesman is the one that sells the truth.
 

austinEV

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May 16, 2013
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The canard is that his success is due to his salesmanship. That doesn't mean he can't be a good or great salesman.

His style is certainly not slick, but that hasn't stopped him from being effective. The most effective salesman is the one that sells the truth.

We are saying the same thing. Any fool can sell a model S. His skill as a salesman isn't driving his companies. However, I still think he is below average, and that it doesn't matter.
 
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Johan

Ex got M3 in the divorce, waiting for EU Model Y!
Feb 9, 2012
7,501
9,967
Drammen, Norway
The canard is that his success is due to his salesmanship. That doesn't mean he can't be a good or great salesman.

His style is certainly not slick, but that hasn't stopped him from being effective. His stuttering delivery is endearing to many and comes across as genuine, which is a breath of fresh air in a communications world ruled by PR-speak. The most effective salesman is the one that sells the truth.

It's easy to be the best salesman when your product and service is as superior as Tesla's. A canard could sell it.
 
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MartinAustin

Active Member
Jul 21, 2013
2,792
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The most effective salesman is the one that sells the truth.

We are lucky that that is true!

Elon tells the truth so much it's as if he was cursed as a toddler and is unable to lie about anything.

Compare with the usual super-click CEO who does nothing except smooth over cracks and place shareholder happiness at the top of the priority list - usually involving a lot of lying by omission or flat-out lying.
 

brian45011

Active Member
Apr 28, 2011
2,016
6,608
Anyone have good explanation for the increases in Accts Receivable($150mil) and customer deposits($100 mil) in the 10Q, I believe on the earnings call Model 3 reservations were accts rec since there had to be credit card processing before TM had the cash so that number seems to jibe, But the net new $100 mil in customer deposits seems huge and would be very bullish if I'm understanding it. Is that like almost 20k new net deposits on S or X's sin Jan 1 on top of the existing $280mil already on the books? If so I'm a little surprised that number wasn't played up more. Also why lead time on the S are so short. And before Einsv chimes in, full disclosure I'm short TSLA, but happy to be enlightened with facts and numbers. cheers

Given your last sentence, I suspect you may know the answer. Tesla uses accrual accounting. Model 3 deposits made before midnight 3/31/16 are booked as a liability in Customer Deposits; the offsetting balance sheet asset entry appears as Accounts Receivable until the cash is received from the credit card companies. Guesstimating between the announcements made of the number of M3 deposits placed before the live reveal (135,000) and within the first 24 hours (200,000), an approximation would be about 150,000. Subtract from that increase ($150 million), X signature deliveries at $40,000/car from the deposit liability account and the reported values make sense.
 

kenliles

Active Member
Jun 7, 2012
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one of most 'under-sold' features of Tesla imo.

"
The state trooper that met us at the emergency room with the initial police report even had a look of disbelief on his face. He said to Bill, "We all thought we were rolling up on a fatality. I can't believe I'm standing here talking to you, buddy. You're lucky you were driving that car. That's really the only reason you are still here."
...
Then, before he put the cover back over the car, he pried out a wheel center cap. He handed it to me and said, "Have this made into a keychain or something, and keep it. We don't get cars that look like this and hear that the driver is still alive."

Tesla, we can't thank you enough for this miracle of engineering. We know your car, and the grace of God, are the reason he still here.
"


Still a complete family, thanks to our Tesla!
 
Jul 21, 2015
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Ft. Lauderdale, FL
To put things in perspective, hitting guidance for automotive deliveries this year will likely mean that Tesla will also be non-GAAP profitable.

With the advancement of Model 3 production goals, I'm not sure this is a likely outcome due to high CapEx spending. They've increased their initial $1.5B spending projection to about $2.25B for 2016. With only $216.9 million dedicated to CapEx in Q1, they still have over $2 billion to spend on capital expenditures for this year. That averages out to over $670 million per quarter, which is more than they've ever spent in a given quarter. I'd assume most of the remaining capital expenditures will be in the latter part of 2016, which will offset the huge revenue increase Tesla will see from the end of the year delivery push and TE ramp.
 

Fallenone

Active Member
Oct 13, 2015
1,988
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Reno, NV
With the advancement of Model 3 production goals, I'm not sure this is a likely outcome due to high CapEx spending. They've increased their initial $1.5B spending projection to about $2.25B for 2016. With only $216.9 million dedicated to CapEx in Q1, they still have over $2 billion to spend on capital expenditures for this year. That averages out to over $670 million per quarter, which is more than they've ever spent in a given quarter. I'd assume most of the remaining capital expenditures will be in the latter part of 2016, which will offset the huge revenue increase Tesla will see from the end of the year delivery push and TE ramp.
non-GAAP profitability is different from FCF. You can be non-GAAP profitable while FCF-
 

Familial Rhino

Endangerous Herbivore
Feb 27, 2014
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Toronto, ON
With the advancement of Model 3 production goals, I'm not sure this is a likely outcome due to high CapEx spending. They've increased their initial $1.5B spending projection to about $2.25B for 2016. With only $216.9 million dedicated to CapEx in Q1, they still have over $2 billion to spend on capital expenditures for this year. That averages out to over $670 million per quarter, which is more than they've ever spent in a given quarter. I'd assume most of the remaining capital expenditures will be in the latter part of 2016, which will offset the huge revenue increase Tesla will see from the end of the year delivery push and TE ramp.
I am not an accountant, so could someone please help me with a simple question.

My understanding is that gross profit is revenue minus the cost of goods sold. If we then also subtract the operating expenses, we get the net profit. Capital expenditures for a future model do not belong to either the cost of goods sold, nor operating expenses, right? So why would capex affect profitability? (I get that it would affect cash flow, but that is different.)
 

30seconds

Active Member
Feb 28, 2013
2,234
5,675
SF
It is not about 4% vs 5%. Market is already talking about 11% dilution:

Tesla Needs Billions to Meet Musk's Ludicrous Assembly Timeline

If the cards were played right, it would have been indeed 4 or 5% or much less as a matter of fact. Sometimes patience is a virtue. You can't come and ask market for more money when you are struggling with the current project. It's just not right. I am personally very disappointed with this poor play of cards. Julian and I have been crying off of rooftops that talking about accelerated plans and big expenses ahead of model X ramp success is an "unforced error". Nevertheless Tesla did exactly that!

You absolutely can ask the market for more money when you have a good use for it (rapid growth). That's the whole point of being a publicly traded company. You do not need to be at ATH or even above your last round, but that helps. Maximizing share value is not Tesla's goal.
 
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SBenson

Active Member
May 22, 2014
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Benson
You absolutely can ask the market for more money when you have a good use for it (rapid growth). That's the whole point of being a publicly traded company. You do not need to be at ATH or even above your last round, but that helps. Maximizing share value is not Tesla's goal.

We might as well throw this throw this thread into trashcan then. Now we all agree that Tesla wont do anything to protect the stock price, even when it is in it's best interests to do so. So whats the point of any discussion in the "short term" thread? And why are we all wasting our time here? An interesting thing to ponder.
 
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FredTMC

Model S VIN #4925
Dec 26, 2012
3,492
3,792
Orange County CA
With the advancement of Model 3 production goals, I'm not sure this is a likely outcome due to high CapEx spending. They've increased their initial $1.5B spending projection to about $2.25B for 2016. With only $216.9 million dedicated to CapEx in Q1, they still have over $2 billion to spend on capital expenditures for this year. That averages out to over $670 million per quarter, which is more than they've ever spent in a given quarter. I'd assume most of the remaining capital expenditures will be in the latter part of 2016, which will offset the huge revenue increase Tesla will see from the end of the year delivery push and TE ramp.

Yep. I think it's more likely to see a Q1 or Q2 non gap profit rather than 2H of year. Tesla can/will likely defer CapEx RAMP UP till 2H.
 
Jul 21, 2015
238
202
Ft. Lauderdale, FL
I am not an accountant, so could someone please help me with a simple question.

My understanding is that gross profit is revenue minus the cost of goods sold. If we then also subtract the operating expenses, we get the net profit. Capital expenditures for a future model do not belong to either the cost of goods sold, nor operating expenses, right? So why would capex affect profitability? (I get that it would affect cash flow, but that is different.)

Capital Expenditures are often included in Depreciation and Amortization, which is included in the income statement, which affects profitability. Highly capital intensive businesses, like Tesla, will see huge differences in EBITDA and EBIT. The former doesn't include CapEx, while the latter does.
 

Fallenone

Active Member
Oct 13, 2015
1,988
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Reno, NV
Capital Expenditures are often included in Depreciation and Amortization, which is included in the income statement, which affects profitability. Highly capital intensive businesses, like Tesla, will see huge differences in EBITDA and EBIT. The former doesn't include CapEx, while the latter does.
Yes but the amortization on most of the CapEx items for Tesla spans for more than 10 years or 40 quarters. So a $2B CapEx creates a burden of about $50M OpEx each quarter. And they can defer the majority of CapEx to H2, leaving more breathing room for Q2.
 

SBenson

Active Member
May 22, 2014
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Benson
Yep. I think it's more likely to see a Q1 or Q2 non gap profit rather than 2H of year. Tesla can/will likely defer CapEx RAMP UP till 2H.

Fred, This was addressed repeatedly in this thread. Capex doesn't impact EPS (or your word 'profit'), it impacts cash-flow. Opex impacts both EPS and cash-flow.

Only if you are expecting opex to go through the roof your argument holds. Opex include Sales, Administration, R&D. Are you thinking that these will go through the roof that they will overwhelm increased revenues AND increased margins on those revenues?

Personally I don't think so. Non-gaap positive eps is very much in the cards for Q3/Q4. FCF+ maybe not.
 
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