Good question, I don’t believe the GM targets. For one, they calculate GM more favorably than legacy automakers due to the dealership model. Secondly, I believe they understate the warranty reserve at the time the cars are sold, and then bury warranty claims in the “services and other” segment.
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The coming Tesla cash cow and the short burn of the century
- Thread starter DaveT
- Start date
jelloslug
Active Member
You keep saying "losses, losses, losses" but you have no understanding of where the money is going. Looking at the bottom line only is like trying to drive by looking in the rear view mirror. You know exactly what has happened but you have no idea how you got there.
bdy0627
Active Member
We'll see. Historically, shorts have run for the hills when the stock nears ATH country. We don't hear a peep from shorts at that point. You guys virtually always come here when the stock is down.
K_Dizzle
Member
Ok I’ll bite. Why do you think replacing Elon with a more experienced manufacturer will help with margins. What is that they can bring to the table that Elon isint capable of figuring out?
bdy0627
Active Member
This guy is basically stating that he does not find Tesla management believable. That's his opinion. Mine would be that we should probably just stop wasting time with this discussion. The only antidote to his opinion is what will ultimately be revealed in Q3 and Q4. That's it. He will very clearly be either proven right or wrong. It's black and white. Place your bets.
I’m referring to GAAP losses and cash burn, both increasing as cars sold increases.
jelloslug
Active Member
I’ve also seen this several times in the case of longs where their company goes bankrupt, SunEdison being the most recent.
Stay classy. Anyway, there’s still billions to go for GF 1 & 2. I’m not sure about M3, except it’s incredibly inefficient. Perhaps they spent a lot of capex on automation that was later ripped out?
Tesla doesn’t put R&D in GM for one. On the warranty, I can’t really quantify it except that I believe it’s one reason why “service & other” losses have continued to increase. A lot of this is free service work.
They need someone like Alan Mulally who saved Ford after Bill Ford nearly ran it into the ground. I should note that while this is an example of what I think Tesla should do, for the sake of my investment position, I hope Elon never leaves.
jelloslug
Active Member
That would be a disaster. Tesla is decades away from being about to withstand a CEO that is focused on shareholder profits only.
What does that have to do with not having dealers?
If you are having a hard time quantifying things, you may want to read this: US Automaker Warranty Report
Tesla is setting aside far more per car (accruals) which are seen as an expense, but their warranty costs were less than both GM and Ford.
I don't understand why you guys are giving this troll attention. He keeps saying the sane nonsense over and over.
Back on topic. I see some factors which would make for a "squeeze of the century," but am unsure of their effect.
Dusaniwsky’s; 40.5M shares shorted out of estimated available 47M, 6.5M left. How do these figures compare to other shorted companies? How about past short squeezes?
Do you think that the motivation of average shareholder (the Tesla dream) will exacerbate a squeeze? Personally, i think i would not sell at $400 if we got there in a soon. I would need 'an offer i can't refuse' to sell it all. Well, maybe a quarter or so to lock in the profits. If people aren't selling, how does a short cover their position?
How long does a short squeeze last? VW's seemed to last about a month and a half. Over that time stock went up 180%. In 2013 Tesla went up 160% i believe.
How would one know when we're at the top? Naturally its impossible to predict, but are there factors we could watch for? Would all 40.5M shares need to be bought back? Or would the smart ones hold out until the squeeze ends and price comes down?
Back on topic. I see some factors which would make for a "squeeze of the century," but am unsure of their effect.
Dusaniwsky’s; 40.5M shares shorted out of estimated available 47M, 6.5M left. How do these figures compare to other shorted companies? How about past short squeezes?
Do you think that the motivation of average shareholder (the Tesla dream) will exacerbate a squeeze? Personally, i think i would not sell at $400 if we got there in a soon. I would need 'an offer i can't refuse' to sell it all. Well, maybe a quarter or so to lock in the profits. If people aren't selling, how does a short cover their position?
How long does a short squeeze last? VW's seemed to last about a month and a half. Over that time stock went up 180%. In 2013 Tesla went up 160% i believe.
How would one know when we're at the top? Naturally its impossible to predict, but are there factors we could watch for? Would all 40.5M shares need to be bought back? Or would the smart ones hold out until the squeeze ends and price comes down?
I have heard a similar sentiment on every single one of my prior short plays without exception. Don’t look at the financials, big things are right around the corner, can’t see the forest for the trees, rear view mirror, etc.
I’ll counter by saying not looking at the financials is like driving on autopilot and a big red fire truck just entered the lane in front of you.
Shorting comes with strings attached ... daily interest, deadline to return (buy), margin account with funds that cover possible raise in prices.
If the prices raises more than there is funds in margin acount, the position is closed automaticaly i.e. shares are bought with that money.
Shorter does not have any say in this. He may only add more money in the margin account to warrant for higer possible buying price.
Shorting landscape is a nasty one, do not compare with buy and hold vacations.
If you really believe that you totally misunderstand the accounting implications of the use of dealerships vs direct distribution. Secondly, you misunderstand the warranty cost structure of Tesla vs legacy, specifically the owner service centers and the use of direct diagnostics on a car by car basis prior to service calls. You could actually make some decent points were you actually to analyze the P&L. You are making vague accusations of potentially fraudulent inancial statements and grossly incorrect inferences about cost accounting.
Once again, you claim to be a CPA. if that were true you would not make such ignorant claims without any support. You would have specific numbers and comparisons with other automakers. You don’t.
I actually thoughts initially that you might be serious. Of course you’re not. Given your apparent ignorance of financial analysis I suspect you are not even an active market participant at all. I suggest you study some basic GAAP policy statements on lease accounting, income recognition, use of contingent liabilities laity covering uncertain future events (specifically manufacturer warranty and liability reserves). I do not list the references because if you’re a CPA you know exactly where they are. If you do not understand accounting quite well you will not understand them anyway, just as you do not understand the financial statements of Tesla, assuming you have read them at all.
For all, I do not intend to be rude, but there these assertions become more and more wildly inaccurate.
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