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I know longs are not all in. I still plan to add. Some of my friends had zero position now start to seriously look at it. The guy behind me this morning in the reservation line said he regret didn't buy during recent pullback, now he is looking for opportunity to buy a large chunk.
dc_h
Active Member
I think they will start 3 from Fremont for employees, but will have second plant in China started by the time the public starts getting cars. Maybe in Tilburg too. China batteries can come from Japan directly, parts suppliers are plentiful and electronics can be done by Foxconn. GF will supply Fremont and Panasonic can handle China. This could allow ramp to over 500,000 in 2018. Assuming a Sport coupe, CUV they could sell more than a million by 2020.
Cash flow is cash flow. Why would it not count?
In contrast, the $40k sig deposits will count as revenue, but will not count as cash flow because they counted towards cash flow when the deposits were originally made.
Because the deposit is considered as liability. Therefore not "free cash flow". FCF is the metric people usually look at. Of course they can use "cash flow from core operations", but it is their own custom made metric and is less accepted by investors in general.
I still think they get close to break even cash flow not counting the deposits...
dc_h
Active Member
If you take 40,000 off revenue for X sigs, why wouldn't you count the new deposits. I assume it's cash and a liability. You are counting sales as a negative because they had deposits and deposits because they are future sales. I think sales are good and deposits are good.
Regarding the strategy behind sight unseen reservations, I think it is a great way to gauge ( show off ) the brand's value.
Tesla is already more than just a car company ( i.e. Tesla Energy ) and the more they establish themselves the more likely they will be to enter more and more industries. In each venture, the brand power displayed today will be leveraged to generate sales and demand larger margins. Investors should take note of this.
Tesla is already more than just a car company ( i.e. Tesla Energy ) and the more they establish themselves the more likely they will be to enter more and more industries. In each venture, the brand power displayed today will be leveraged to generate sales and demand larger margins. Investors should take note of this.
The 40k for sig X was counted as both asset as in cash and liability as in deposit for the past two years or so. If you count that as revenue, it was counted the time of reservation. So when delivered, you are realizing sale price - 40k of revenue this quarter. But in the meantime, you freed up 40k of liability. It's a time displacement.
Disclaimer: I'm not a CPA, everything is my understanding after reading stuff on the internet.
Causalien
Prime 8 ball Oracle
I reserved. It was just another day for everyone else, but a watershed moment for people who jumped for the idea of a better future.
Flip side to this, I can no longer be an objective voice in TSLA stock movements since I am now emotionally invested in the product.
Flip side to this, I can no longer be an objective voice in TSLA stock movements since I am now emotionally invested in the product.
Hogfighter
Professional Lurker
Congrats, Causalien. You've officially joined the 'biased' club. So can we no longer count on the Crystal Ball?
chickensevil
Active Member
Probably mostly search engine bots and the like. There are a TON of web crawlers
Playing catch up, so if someone answered this sorry. The trailing stop goes as a trigger at the ask price (high number) whereas what you see is the "market" number which is really just the mid number between bid and ask. So the trigger doesn't hit based on the market price coming down. This is a good thing because there are many times the buy price will tank off while the ask stays solid for a bit causing a pretty wide spread between the two (opposite happens as the price goes up, bid slowly goes up while the ask jumps much faster)
What ultimately should happen is that the stop will sell right as soon as someone else puts out an asking price at that same amount. This can cause you to be forced to sell slightly lower than your limit if someone says they will sell at 80 (hitting your 80 trigger) and then someone else IMMEDIATELY sets a 75 ask, you have already triggered your order and now it goes at that lower price.
The way around that is a stop limit order, but if your limit order goes in and the price is collapsing too fast noone will buy your limit and you will just never sell and be stuck holding the bag.
Playing catch up, so if someone answered this sorry. The trailing stop goes as a trigger at the ask price (high number) whereas what you see is the "market" number which is really just the mid number between bid and ask. So the trigger doesn't hit based on the market price coming down. This is a good thing because there are many times the buy price will tank off while the ask stays solid for a bit causing a pretty wide spread between the two (opposite happens as the price goes up, bid slowly goes up while the ask jumps much faster)
What ultimately should happen is that the stop will sell right as soon as someone else puts out an asking price at that same amount. This can cause you to be forced to sell slightly lower than your limit if someone says they will sell at 80 (hitting your 80 trigger) and then someone else IMMEDIATELY sets a 75 ask, you have already triggered your order and now it goes at that lower price.
The way around that is a stop limit order, but if your limit order goes in and the price is collapsing too fast noone will buy your limit and you will just never sell and be stuck holding the bag.
jhm
Well-Known Member
Technically customer deposits do contribute to free cash flow, but issuing debt or equity to fund capital expwnditures would not. It may not be sufficient to reach positive free cash flow, but it does move in the right direction.
Free Cash Flow (FCF) Definition | Investopedia
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You are right about the asset and liability when a deposit is taken, but wrong on revenue. Revenue is counted when product is sold, or delivered in this case. I am an accountant and former CPA. Unfortunately I am a bit rusty on the cash flow side of things so I could be wrong about how that works, but I know how revenue is counted, and it's counted at the time of delivery. Deposit timing is completely irrelevant to when revenue is booked, at least for Tesla, but actually that is true of most companies.
Free cash flow is looked at as a proxy for earnings, due to the habit of so many companies to be incredibly dishonest with their earnings.
Tesla's actually got very honest earning statements, so I don't need to look at free cash flow.
Cash flow (period) is a different matter. You can have a high-earning company and if it runs out of cash flow, the banks can hold them up for ransom by demanding high interest rates; they go bankrupt if they don't get the cash. This happened to lots of companies, including profitable ones, in 2008. The huge number of deposits should eliminate worries about cash flow for a while.
Insurance companies have extremely low free cash flow, because nearly all their premiums are committed to future payouts on claims. They receive the premiums first, and pay out much later, however... so they often have very good cash flow. The premiums which they hold, without paying interest, until there is a claim, are called "float" and it's considered a valuable form of capital -- they can invest it in whatever they want until it's needed for claims.
Tesla has "float" from its reservation payments. A lot of float. Float is incredibly cheap capital -- better than borrowing at interest, better than diluting the stock.
Tesla's actually got very honest earning statements, so I don't need to look at free cash flow.
Cash flow (period) is a different matter. You can have a high-earning company and if it runs out of cash flow, the banks can hold them up for ransom by demanding high interest rates; they go bankrupt if they don't get the cash. This happened to lots of companies, including profitable ones, in 2008. The huge number of deposits should eliminate worries about cash flow for a while.
Insurance companies have extremely low free cash flow, because nearly all their premiums are committed to future payouts on claims. They receive the premiums first, and pay out much later, however... so they often have very good cash flow. The premiums which they hold, without paying interest, until there is a claim, are called "float" and it's considered a valuable form of capital -- they can invest it in whatever they want until it's needed for claims.
Tesla has "float" from its reservation payments. A lot of float. Float is incredibly cheap capital -- better than borrowing at interest, better than diluting the stock.
Woa - wait up. Accounting terminology foul.
You don't have to take $40K off the >> Revenues << for Sig. Model X.
In a Tesla standard normal cash sale (with no Tesla affiliated lending partner and Residual Value Guarantee GAAP Lease Accounting nonsense sent to confuse everybody)........
Revenue for a Model X is the whole amount on the Sales Invoice. Nothing to deduct from Revenues owing to the deposit.
The $40K prepayment is just cash flow that is not received in that quarter - because its already been deposited in a previous quarter.
40 x Model 3 reservations at $1K a pop definitely repatriate the cash flow to exactly the place on the accounts that the $40K came from. The reservation account. This cash (bizarre but true) both adds to the bank account balance (of course) but is recorded as a liability - no different from a bank loan because its owed back to the customer until it isn't - either when its refunded at the customers request or when the car is delivered. After that of course Tesla no longer has the liability and if it sold the car in return for the cash it keeps the cash.
The $40k will be revenue for sure. I am also quite sure it will not count towards cash flow, because cash flow is literally cash flow. So the $40k counted as cash flow when the deposit was received, and will not count as cash flow at the time of sale.
This is why there is a statement of cash flows, because cash does not typically match revenue and expenses exactly, due to financing, deposits, etc...
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