My Dec 31st article on SA to short or dump TSLA when it was trading at 242.
What To Expect For Teslas Critical Q4 Results And Beyond - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
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My Dec 31st article on SA to short or dump TSLA when it was trading at 242.
What To Expect For Teslas Critical Q4 Results And Beyond - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha
McMuggets
Member
Wow, wild day and emotions are running high between differing viewpoints. Three analysts hammering TSLA down within a week or so of the ER during a red market... gift gift gift! Woke up this morning to see $177 and was doubtful my $172 buy trigger point would be reached. Lo and behold, ended up with some additional shares to long-term core position. Again, could it go down from here? Heck yes. The technical chart is broken now, losses are mounting, people are bailing and running like crazy... actually from almost every stock. Put in another buy trigger at $160 (kind of hoping it doesn't get there, but kind of wanting it to get there.... ). So it goes to show I am not some perma-bull... short term bearish, but long term TSLA is going to rocket. If the ER is remotely good, these prices won't last.
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And actually as I finished that post...we are bouncing back to $176.
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And actually as I finished that post...we are bouncing back to $176.
FredTMC
Model S VIN #4925
Oil up 6%. Markets bouncing now.
If markets finish off their lows, we could see some covering on TSLA into the close
If markets finish off their lows, we could see some covering on TSLA into the close
Whether or not they have deliberately engineered a cash flow positive Q4 I do not know, and can not know.
What I do know is that it is eminently possible and I have provided an explanation for others to consider.
They were definitely cash flow positive from Operations in Q4. That I think is a given with a better than 99% probability as a result of just selling radically more Model S in one quarter than ever before. They apparently did quite a bit of hiring but they sure as heck did not increase their headcount by 40~50% in Q4 vs Q3 to make up for the extra revenues, or actually any more than 3~5%.
The exceptional cash outlay in Q4 is the same exceptional cash outlay from Q3: CapEx on MX production equipment. So the question is, did the bank balance go up or down in the quarter. Frankly they can make it go up just by pulling in some of their revolving credit line - IMO it's not that unlikely they used it to cash-flow circa 2000 units to Denmark. At the end of Q3 the revolving credit line was at $0.00 balance. If they have some good excuse for it exiting Q4 at $600Million drawn down, then there's a cash flow positive quarter right there without lifting a finger.
It's not that hard and I have provided a long list of more attractive ways to do it than pulling in funds on credit.
Picked up some more shares at ~$174 this morning. I like how things are set up heading into ER - low expectations, downside already known, upside not completely known.
Side note: noise in this thread ramping up much better than Model X. Already on 3400 posts one month in, or 100 posts/day, doubling 2015's rate of 50 posts/day.
Side note: noise in this thread ramping up much better than Model X. Already on 3400 posts one month in, or 100 posts/day, doubling 2015's rate of 50 posts/day.
+1
I think maintaining a level head about the prospects for the stock is extremely valuable right now.
There is definitely a place for a macro-oveview. No place whatsoever for mud-slinging accusations of false motive.
The Blue Owl
Endangerous Herbivore
Yeah, mine too. I confess I got a few $160 weekly puts yesterday, so I'm a bit ashamed of myself. But then I switched them to $180 calls when we were around $173. TSLA better run now, or I will have to work into my 80s. (Just kidding.)
Several posts moved to snippiness. I know emotions run high when the stock is low, but please try to keep cool.
This is exactly what I have sought to demonstrate, what I have said, and I agree with your synopsis absolutely. Nothing more, nothing less.
The next piece of the puzzle is whether the business has sought to act on that possibility. That is more speculative.
If I was going to project my own gut feel on that speculation I would suggest that this is a very close call. They would need to balance priorities of expressing a FCF positive Q4 or Q1 and I suspect they would prioritize a confident FCF positive Q1 rather than for example pulling hard on the credit line in Q4.
Nevertheless what we will see in Q4 is a reversal of the plummeting negative cash flow trend. Certainly sufficient to destroy any short thesis that is baying for Tesla to shed $400-$500 Million of net cash flow per quarter until it runs out of cash.
jesselivenomore
Member
Hm. I am going to ignore the threat of physical assault since the mods should take care of that.
So without addressing anyone in particular:
I believe we all know when the term "cash flow" is used by members here, and analysts on the street, it is referring to free cash flow - cashflow from operations plus cap ex.
In other words, a measurement of if a business can sustain itself without further financing activities. This is separate from net cash flow which is simply the change in cash balance from quarter to quarter. For example, Q3 2015 Tesla was technically cash flow(net) positive since they pulled in over $750M from a secondary offering, increasing their cash balance to $1.4B from $1.1B in Q2. Of course, no one in their right mind would call that "cash flow positive" since we know it was a result of financing activities, and indeed free cash flow from operations and cap ex was negative $600M.
Given the above, in a completely hypothetically scenario, if someone were to post a giant graphic titled Tesla Free Cash Flow with little green bars photoshopped at the end, and then proceed to justify the little green bars with "they can draw on a revolving line of credit", this hypothetical person is either woefully ignorant of the definition of free cash flow, or being intentionally deceptive. And the case of ignorance would be highly unlikely given the idea of "cash flow positive" is so intuitive, even to a novice investor - if Tesla issued a secondary tomorrow because it thinks it is running low on cash, NO ONE would celebrate that and call it "cash flow positive" when the cash balance increases.
I am not saying anyone would do anything like this in this forum. Just a hypothetical situation to watch out for in the future.
So without addressing anyone in particular:
I believe we all know when the term "cash flow" is used by members here, and analysts on the street, it is referring to free cash flow - cashflow from operations plus cap ex.
In other words, a measurement of if a business can sustain itself without further financing activities. This is separate from net cash flow which is simply the change in cash balance from quarter to quarter. For example, Q3 2015 Tesla was technically cash flow(net) positive since they pulled in over $750M from a secondary offering, increasing their cash balance to $1.4B from $1.1B in Q2. Of course, no one in their right mind would call that "cash flow positive" since we know it was a result of financing activities, and indeed free cash flow from operations and cap ex was negative $600M.
Given the above, in a completely hypothetically scenario, if someone were to post a giant graphic titled Tesla Free Cash Flow with little green bars photoshopped at the end, and then proceed to justify the little green bars with "they can draw on a revolving line of credit", this hypothetical person is either woefully ignorant of the definition of free cash flow, or being intentionally deceptive. And the case of ignorance would be highly unlikely given the idea of "cash flow positive" is so intuitive, even to a novice investor - if Tesla issued a secondary tomorrow because it thinks it is running low on cash, NO ONE would celebrate that and call it "cash flow positive" when the cash balance increases.
I am not saying anyone would do anything like this in this forum. Just a hypothetical situation to watch out for in the future.
Tesla is crashing back to earth like every massively unprofitable bubble stock. Delude yourselves at your own risk. All stocks ultimately return to their fundamental valuation. The value of an auto company that makes money is maybe 1.0x revenue. The value of an auto company losing tons of money is...
What is Tesla's fundamental valuation? Your thoughts seemed to trail off before you were able to provide any cogent analysis.
Breaking down 180 is depressing, but can we stop become delusional about a surprise positive eps in Q4? Q3 letter estimated 500m of CapEx in Q4. Even with 0 RND and SG&A, 0, they need to sell over 18k cars with GM of 27% to reach break even on non-GAAP. How many they sold?
dreamingof3
Member
Just when you think the selling is over it pulls a u turn off of 176 back to 173. threatening new lows again. SMH
Runarbt
Active Member
We know hos many New cars, but not how many CPO cars. And neither how many powerpacks and powerwalls they sold.
The guidande is to "aspire for positive cash flow" in Q1, not Q4. They said this well into Q4 at last CC, so they had visibility.
Tesla is not playing games with the shorts and analysts and the market, why would they?
They are not going to be cash flow positive in Q4, probably not in Q1 either. However the negative trend could stop already in Q4, I think that depends on X and GF spending.
Tesla is not playing games with the shorts and analysts and the market, why would they?
They are not going to be cash flow positive in Q4, probably not in Q1 either. However the negative trend could stop already in Q4, I think that depends on X and GF spending.
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