But he writes "specifically for ROW". Seems like "Rest Of World" would be general, not specific. Screw it, I give up. It is very annoying when people think we can read their minds.
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Dan Detweiler
Active Member
K_Dizzle
Member
Fred thinks he’s Elon Musk
Aaaaaand Casey Neistat defending Elon on Youtube (he elaborated on the (very deep) discussion about social media and misery-by-comparison that Elon talked about):
Not so expert as most, but how do you think rising interest rates affect bond prices? Does that factor in to your analysis?
Current bonds obviously are not cheap. That's why you won't see any information about.
They point 2025 bonds which are universally 8.5% for B3+.
So if your bonds are 5.5% in 2025 any investors software will automatically derate it in 8.5 or 100$->88$.
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jhm
Well-Known Member
Are you familiar with Altman Z-score and other credit models. These models are based on the idea tha equity is a residual claim on enterprise value after debt is paid. This makes equity essentially a call option with strike determined by the level of debt. From that insight, most credit models include some component relating to the market cap of the firm.
Bond trading is affected by ratings. Ratings are determined in no small part by stock volatility.
Bonds for 2025 are tanking because the time of free money is coming to it's natural end. Bonds value is determined by no small part by actual and expected inflation rates.
If they ever get financial problems Tesla will start selling IP and you will see "cooperation projects". So far all this "they need to borrow now and it's bad" is just some delusional nonsense.
"I am not a racist and I have a black friend". We got you. You don't hate Tesla and just a paid troll.
jhm
Well-Known Member
All corporate bonds are related to the value of equity. Convertible bonds are more strongly sensitive to stock prices than straight bonds.
Fact Checking
Well-Known Member
Yes, it was guided, the Q2 update letter included the following guidance about a significant increase in Model 3 gross margins:
"Model 3 gross margin turned slightly positive in Q2, expecting roughly 15% in Q3"
The level of rework matters: if the Electrek leak of about 40 minutes of "light" rework per Model 3 at the end of Q2 is accurate, then the labor cost was trivial: less than $50 per unit, or less than ~0.09% of ASP/margin. (There was a subsequent leak that reported that in August the level of rework got reduced significantly, which should help Q3 already.)
If you are mass-manufacturing $9,900 cars then every $100 of rework is 1% off the (razor thin) margins, which hurts big time. If you are mass-manufacturing $55k-$60k ASP luxury sedans then there's a lot more room to perform finishing touches - and customers expect no less.
@Lycanthrope Please give us a sign if you are OK! How will you survive this?! /s
RobStark
Well-Known Member
The averaged reworked car took an average of 37 minutes to repair.
We can logically assume as time goes on Tesla will get better, reducing the number of cars reworked and the time spent on each car repairing.
Tesla surges after Morgan Stanley becomes the second Wall Street bank to drop coverage of the stock (TSLA)
Those who say Tesla will run out of demand either don't understand the situation, or are trying to spread fear.
Next year Tesla will start to sell Model 3 globally. This car is so much better than the gasoline cars, the only scenario to run out of demand is that the public don't understand the advantage of Model 3. That's unlikely to happen because every week another 5000 families get the car and they will start to tell their friends an coworkers. There are lots of advantages in addition to saving gas and more driving fun... for example, do you know 2 people can sleep in the car with plenty of space? They don't even need to move the driver's seat forward. It would be fun for someone to travel the country with zero cost on gasoline and hotel.
The cost difference for RWD and P3D is not that big. The margin on P3D must be really high. In the worst case weak demand scenario, Tesla can drop the P3D price and get huge demand on the car, but still earn $20k on each car. I don't think Tesla will need to do this, just to show "running out of demand" is FUD.
What they really should talk about is that gasoline cars will run out of demand in a few years.
Next year Tesla will start to sell Model 3 globally. This car is so much better than the gasoline cars, the only scenario to run out of demand is that the public don't understand the advantage of Model 3. That's unlikely to happen because every week another 5000 families get the car and they will start to tell their friends an coworkers. There are lots of advantages in addition to saving gas and more driving fun... for example, do you know 2 people can sleep in the car with plenty of space? They don't even need to move the driver's seat forward. It would be fun for someone to travel the country with zero cost on gasoline and hotel.
The cost difference for RWD and P3D is not that big. The margin on P3D must be really high. In the worst case weak demand scenario, Tesla can drop the P3D price and get huge demand on the car, but still earn $20k on each car. I don't think Tesla will need to do this, just to show "running out of demand" is FUD.
What they really should talk about is that gasoline cars will run out of demand in a few years.
jhm
Well-Known Member
Just to be clear any bond rating is going to consider the debt to equity ratio. The stock price is in the denominator of that ratio. So bond ratings will depend on part on the stock price level, not just the volatility of the stock.
Please accept my sincere apologies ahead of time.
I do understand this is really taking the "thinking by analogy" thing way too far.
I know, I know, first principles, right.
So I know it's crazy, but I am gonna go out on a limb here....
Last night I was looking at the data and its just nuts!
Here's the thing on these Purple Squirrels:
See this for example:
Purple squirrel - Wikipedia
Well it turns out there are purple who are extraordinarily well-qualified!
In fact, it seems that, at least in some peculiar way, Elon himself may be an actual Purple Squirrel!
(As defined in the above Wiki link.)
How does this tie into todays Market Action?
Its all about those who are stuck in the old squirrel thinking, and how they fail to recognize the new squirrel innovations and their potential for the future of the species. So much ignorance and denial. So much envy and revenge fantasy on Wall Nut street! And why?
Is it just because these purple won't borrow any more "mouse nuts," and say they will be self sufficient with fruits of their own production from here on out? Or is it because those incumbent grays and browns know that in the long run the new squirrel adaptations will win out, and they will lose their squirrelly status. Some of them actually seem to recognize that the Purple squirrels may be required survival of the species.
Many of the rodents from Wall Nut Street are shouting into the leaves and trying to short the nut stash to see if they can starve these purple before they get any further. What they don't know, or won't recognize, or are sure to deny, is this: what these purple are doing is KNOWN far and wide, in the forests, the savannah, the mountains, islands and prairies. Everywhere there are creatures who want what these purple are producing! More and more every day. The demand (and supply) is growing.
Patience will bring prosperity to those who hold. Its not about words, and images, its about the results.
The Purple squirrel has shown, and is clearly continually showing what new squirrel thinking really means for a sustainable future.
RobStark
Well-Known Member
It is usually written RoW but that has been used more than a couple of times on TMC er teslamotorsclub.com
I'd like to see at least some of the Model 3 "day one line waiters" who are holding out for the SR (short range) version get access to the full $7500 tax credit in the US. Many may not be able to take the full $7500, but I'm sure they'd appreciate being able to take at least $5000 or $6000. Perhaps Tesla could deliver two or three thousand SR cars in December, a nice Christmas gift for some.
In general, I think Tesla needs to always remember to reward those who are willing to physically wait in line for new Tesla products, even when this may reduce margins somewhat. This feeds a virtuous cycle, making it easier for Tesla to create buzz around future product launches. Apple does this to great effect. "Loyalty begets loyalty."
Personally, I am thankful that, with our Day One (2016/03/31 during the "reveal") Model 3 reservation, we were able to order our AWD Model 3 this past June. By allowing us to order a few months before taking delivery, Tesla enabled us to save a few thousand dollars by locking in lower prices on the dual-motor upgrade, non-black paint, destination and document fees, and future cellular network fees. I would say that our initial two-year "loan" of $1000 to Tesla, and our subsequent three-month $2500 "loan", are paying off in spades.
Sort of tying this into "market action", building the Tesla brand by demonstrating loyalty to customers will help the share price over the long run. My wife is very happy with Tesla, and this makes it easy for me to obtain her support whenever I feel ready to buy TSLA shares (as I did yesterday).
Tesla needs to redesign their battery pack to get costs down for the standard range version, so it's going to be later than most people expect. They might get a few out in Q1 (like less than 1% of production). In Q2, maybe like 10% of production. And that's probably optimistic. I think it's going to take a while to ramp, much longer than most expect.
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