I agree with the gist of your argument, but just wanted to point out that I don't think you can calculate the ASP like that. I'm still not 100% on how the revenue recognition works, but I'm pretty sure only 68% of Teslas sold in Q3 fully hit the revenue line (thanks to 32% being subject to lease accounting). I think only the first month's payment + tax credit hits revenue for the other 32% of Teslas sold. I'm not sure how previously-sold lease accounting cars hit the revenue line in Q3--maybe just the 3 months of payments for each of them?
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andrewt3000
Member
I have seen this movie before...
In the .com bust many payment providers were going out of business, and everyone thought paypal was doomed. they survived and sold to ebay for $1.5B. (see Max Levchin interview in Founders at Work for an insightful summary)
Starting in late 2011... solyandra, a123, and fisker went bankrupt. mitt romney called tesla a loser. many of my friends.. some that are brokers and run funds... shorted tesla because they saw it as easy money... the next company to fold in the green energy sector. we all know how 2013 ended.
now you have sun edison going bankrupt... and solar city has not done well in 2016... they have plummeted from 55 to under 20. the net metering decision in nevada was a disaster...... Their financing is cause for concern... But I expect, as most people here do.... this trend will repeat itself. M3 and TE are likely to explode and take Tesla to the next level.
But I am very uncertain about the short term... I think today's SC/Tesla call will reassure the tesla bulls that this plan makes sense... but I doubt it will have much effect on the shorts or the SP. If the ER, and the roof announcement didn't have an effect.. what could they possibly say. So my question is... what will be the effect when the SC deal closes? Will the shorts double down? Or will they scale back because Tesla is less vulnerable than SC?
In the .com bust many payment providers were going out of business, and everyone thought paypal was doomed. they survived and sold to ebay for $1.5B. (see Max Levchin interview in Founders at Work for an insightful summary)
Starting in late 2011... solyandra, a123, and fisker went bankrupt. mitt romney called tesla a loser. many of my friends.. some that are brokers and run funds... shorted tesla because they saw it as easy money... the next company to fold in the green energy sector. we all know how 2013 ended.
now you have sun edison going bankrupt... and solar city has not done well in 2016... they have plummeted from 55 to under 20. the net metering decision in nevada was a disaster...... Their financing is cause for concern... But I expect, as most people here do.... this trend will repeat itself. M3 and TE are likely to explode and take Tesla to the next level.
But I am very uncertain about the short term... I think today's SC/Tesla call will reassure the tesla bulls that this plan makes sense... but I doubt it will have much effect on the shorts or the SP. If the ER, and the roof announcement didn't have an effect.. what could they possibly say. So my question is... what will be the effect when the SC deal closes? Will the shorts double down? Or will they scale back because Tesla is less vulnerable than SC?
Are you saying that this is a new strategy for 2016?
That in October in 2015, they were not doing this, that the focus in October was US production and sales.
If they weren't doing this in 2015, then the difference in US sales makes sense.
If they were, then not so much.
This is a fear-based election selloff; not limited the TSLA. The VIX is up 20%! High beta stocks get hit the hardest.
Yup!!! The SCTY is generally priced in. Trump fear is the issue here. No one thinks he can win. Just remember no one really knows how many closet Trump supporters are out there.
Ulmo
Active Member
Oh ... I never started my macro screen this morning. Wrong side of bed and all. Lo and behold, I switched the ticker from SCTY to SPY, and the graph remained identical. Tick for tick. I was in one hour timespan.
I am not getting into politics, but just in terms of impact on the share price, Election Betting Odds shows HRC/Trump at 72.2/26.5. So the betting markets think the election is now in play much more so than a week ago.
OK, I give up, what on earth could have possibly triggered a Dislike on this post? If it's wrong please tell me where the error is so I can learn more about revenue recognition.
You are missing the point. It is NOT a new strategy. Look up 2015 Q4 deliveries vs. production. As I mentioned, you'll see that deliveries were about 3K cars higher than production. The reason, as I explained is allocation of the production in a way which allows for all cars built within a given quarter to be delivered during the same quarter, in spite of the the global average transit time of 4-5 weeks. This allocation of production invariably results in light deliveries in October and November and great majority of deliveries concentrated in December.
The same pattern of deliveries last month, together with other data, signals exactly the same pattern of deliveries for the current quarter overall - they will deliver about 3K more than produce.
This makes sense to do on a couple of points. The first one mentioned by @techmaven and @Papafox upthread is to minimize delivery of cars with AP 2.0 hardware before the software catch up in December. Second to maximize revenues in Q4, as 2017Q1 will see significant contribution from TE. This will allow to record two profitable quarters on top of 2016Q2, decimating the current bear case.
EDIT: This might also be a reason that Musk indicated that there will be no capital raise required for M3 ramp. This is what Jason Wheeler is demonstrating since 2016Q1: disciplined and skillful management of revenues and expenses to optimize matching of the timing for both.
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Runarbt
Active Member
racer26
Active Member
I suppose that's one way to frame it - SCTY < 18.70 implies the market thinks the merger fails and thus that's the intrinsic value of SCTY on its own.
I believe the longs who believe the merger will succeed (and really, I can't see why it wouldn't, unless they can drive TSLA to 170 [and I think the mega-holders like Fidelity simply won't allow it - they have too much to lose]) won't allow SCTY to remain under 18.70 for more than a few minutes at a time, as they have a guaranteed return, so long as the merger happens.
Mod note:
Posts moved to Snippiness. Stop talking about other posters.
Posts moved to Snippiness. Stop talking about other posters.
Comic relief - maybe Elon is a vegetarian and just doesn't like steak
But he likes the 'sizzle' of vegetable stir fry?
Yes, comic relief on an otherwise dismal day for longs.
TSLA and SCTY charts look like DOW, NASDAQ and S&P500. Tesla and SolarCity often follow the indexes, but multiplied.
Also, many solar companies are near or at 52 week lows, and Tesla is buying a solar co. So seems pretty normal to see this type of reaction. Solar = bad in Wall St eyes.
Also, many solar companies are near or at 52 week lows, and Tesla is buying a solar co. So seems pretty normal to see this type of reaction. Solar = bad in Wall St eyes.
Bob Lutz to the rescue
Lutz: Tesla's stock will go nowhere but south
Edit: Every time he blatantly lies about Tesla on CNBC it usually signals his employees are ready to take some profits of the table.
Lutz: Tesla's stock will go nowhere but south
Edit: Every time he blatantly lies about Tesla on CNBC it usually signals his employees are ready to take some profits of the table.
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MartinAustin
Active Member
All my stocks are off their lows in the same synchronised-swimming sort of manner... I think today's action with TSLA is just the macro situation.
Things that don't help -
Inside EVs getting mis-interpreted
Bob Lutz continuing to get coverage on CNBC even though it is clear now he does not understand the business
Motor Trend Bolt comparison? Probably not a factor.
Solar City acquisition still probably the biggest drag IMO.
Interestingly... MBLY up today :|
Things that don't help -
Inside EVs getting mis-interpreted
Bob Lutz continuing to get coverage on CNBC even though it is clear now he does not understand the business
Motor Trend Bolt comparison? Probably not a factor.
Solar City acquisition still probably the biggest drag IMO.
Interestingly... MBLY up today :|
Wow, looks like it's not just Elon wondering why he's not getting enough credit for the words and actions. Bob holds the same opinion for GM.
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