TSLA Market Action: 2018 Investor Roundtable

[adaptabl]

Did anyone catch Ron Baron on CNBC this morning saying they wouldn’t make the SR version for a year?

They have to if they hope to keep finding buyers. The LR RWD market is saturated and the AWD market is close to being saturated.

I think they know this:

“Our Q3 Model 3 deliveries were limited to higher-priced variants, cash/loan transactions, and North American customers only. There remain significant opportunities to grow the addressable market for Model 3 by introducing leasing, standard battery and other lower-priced variants of the car, and by starting international deliveries.”

 

[farzyness]

This is incorrect. This is the first delivery report in a while that does not mention financial guidance or the reservation list.

Q2 Deliveries Report:

We also reaffirm our guidance for positive GAAP net income and cash flow in Q3 and Q4

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000
​

Q1 Deliveries Report:

Net Model 3 reservations remained stable through Q1.

laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.​

Net working capital is at negative 2.6 billion.

They had 2.2B in cash at the start of the quarter. However, Accounts Payable - Accounts Receivable was -2.5B. All of these are included in net working capital.

Another way to look at it:

2.2B in cash
- 3B accounts payable
+ 500M accounts recievable
- 300M due in November
- 500M minimum cash balance
- 900M due in March
- 1.2B in committed CapEx
= 3.2B cash needed before Jan 1st



They need 1.4B in unrestricted cash in the bank on January 1st in order to be in compliance with their ABL agreement (900M March debt + 500M minimum cash balance)

So one day of deliveries for a company that's hiring at 50% growth YoY is going to decide if it's going bankrupt or not?

This is the funniest post I've seen all day!

 

[Ellec]

This is incorrect. This is the first delivery report in a while that does not mention financial guidance or the reservation list.

Q2 Deliveries Report:

We also reaffirm our guidance for positive GAAP net income and cash flow in Q3 and Q4

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000
​

Q1 Deliveries Report:

Net Model 3 reservations remained stable through Q1.

laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.​

Net working capital is at negative 2.6 billion.

They had 2.2B in cash at the start of the quarter. However, Accounts Payable - Accounts Receivable was -2.5B. All of these are included in net working capital.

Another way to look at it:

2.2B in cash
- 3B accounts payable
+ 500M accounts recievable
- 300M due in November
- 500M minimum cash balance
- 900M due in March
- 1.2B in committed CapEx
= 3.2B cash needed before Jan 1st



They need 1.4B in unrestricted cash in the bank on January 1st in order to be in compliance with their ABL agreement (900M March debt + 500M minimum cash balance)

They'll have close to 4B by then.

 

[FirebirdAlpha]

So one day of deliveries for a company that's hiring at 50% growth YoY is going to decide if it's going bankrupt or not?

This is the funniest post I've seen all day!

No, it's that they were "close to profit" on the last day of the quarter.

Because it implies they're nowhere close to cash flow positive. And they need cash.

 

[gora321]

Well shortes have been prepared for good news.
This caused dip as I saw in europe. They must have agreed timing to execute such volume in a minute.

Their strategy is to press when there are positive facts with SP and FUD and to make us miserable, to give up!
I will never give up! Never!
Please be focused on facts. There are no negative facts!
Market irrationality or difference between value of the stock and SP is increasing.

 

[RobStark]

Tesla doesn't take reservations in North America anymore.

That metric is no longer relevant.

 

[Fact Checking]

Here's the list of Model 3 Average Sales Price (ASP) figures, per quarter:

Q1/2018  $55,925
Q2/2018  $55,424
Q3/2018  $60,332
Q4/2018  $62,200 (est.)

So, ASP has been increasing steadily, as Tesla ran out of demand in the U.S., selling cheaper and cheaper optioned cars ... wait a minute.

 

[andrewt3000]

This is incorrect. This is the first delivery report in a while that does not mention financial guidance or the reservation list.

Q2 Deliveries Report:

We also reaffirm our guidance for positive GAAP net income and cash flow in Q3 and Q4

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000
​

Q1 Deliveries Report:

Net Model 3 reservations remained stable through Q1.

laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.​

Yeh you're right... they do sometimes give guidance. But still... This is wild speculation.. It could just as easily mean what I suspect... they will be close to profitability.

 

[farzyness]

No, it's that they were "close to profit" on the last day of the quarter.

Because it implies they're nowhere close to cash flow positive. And they need cash.

Or - they are cash flow positive and they will report it during their earnings report.

Utilizing nonsensical trends to justify Tesla not being cash-flow positive is not smart.

 

[Thekiwi]

Things I'm going to be watching for in Q4 (signs of confidence about their capital position - e.g. "non-critical" investments / that which isn't essential to their core profit-making business at present):

* Increased rate of supercharger deployment?
* Increased hiring at Giga 2?
* Increased Giga 2 output (solar deliveries)?
* Increased rate of solar roof development on Giga 1?

I would add "an increase in Powerpack and Powerwall deliveries", but it's Panasonic that's really the limiter on those.

Things I'm looking forward to in Q4:

* Eurospec unveiling
* Model Y unveiling? We know they don't plan to start tooling until (Q2?) next year, but they have to unveil (and collect reservation money ) at some point before that. A positive Q3 report would be just the momentum they need going into that.

I would hope Model Y is unveiled as close to launch as possible - or at least at a time when all variants of Model 3 (including right hand drive) are shipping globally. There will undoubtedly be some who would forego a model 3 order and instead wait for the model y.

 

[Tslynk67]

This is incorrect. This is the first delivery report in a while that does not mention financial guidance or the reservation list.

Q2 Deliveries Report:

We also reaffirm our guidance for positive GAAP net income and cash flow in Q3 and Q4

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000
​

Q1 Deliveries Report:

Net Model 3 reservations remained stable through Q1.

laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.​

Net working capital is at negative 2.6 billion.

They had 2.2B in cash at the start of the quarter. However, Accounts Payable - Accounts Receivable was -2.5B. All of these are included in net working capital.

Another way to look at it:

2.2B in cash
- 3B accounts payable
+ 500M accounts recievable
- 300M due in November
- 500M minimum cash balance
- 900M due in March
- 1.2B in committed CapEx
= 3.2B cash needed before Jan 1st



They need 1.4B in unrestricted cash in the bank on January 1st in order to be in compliance with their ABL agreement (900M March debt + 500M minimum cash balance)

Given that they have sales of around $6b for Q3 with a margin of 25-30% on $2b, let's say $500m, of this and 15% (probably higher due to the specs of the M3's they've been shifting) on $4b, so $600m, with these figures likely to be higher in Q4, I don't see an issue.

And they'd hardly guide for profitability in a quarter where they're profitable, would they?

But I've had enough of your B.S., congratulations, you're the first on my ignore list!

EDIT: this was in response to F*ckTurdAlpha, sorry, he/she/it pissed me off with that totally crap!

 

[SGordB]

By end of 2018, Tesla will be 1st, 2nd and 3rd for USA EVs.
Wow! Absolutely incredible. Way to go Tesla!

View attachment 340118

Don't be fooled by the layout of the chart. They hit 1-2-3 in June, then again in Aug and Sept. This time it's sustainable.

 

[Ulmo]

View attachment 340102 View attachment 340103 View attachment 340104 View attachment 340105
$73,310 + interest from financing (let’s say $1,500) + garage adaptation ($1,000 low end) + no-rinse wash setup plus initial ceramic coating detail ($400) plus sundries idk $500 = $76,710, so my $75K estimate is low. If you want an ugly one that might kill you going around normal hill roads in a 4-or-more-exception event (rain, oil slick, frozen patch, distraction by dog or baby, sun hits your eyes, unexpected bad sneeze, or phone or hot coffee falls off the mount into your lap), sure, knock off paint plus all whell drive and save $6,500+tax, and if you don’t want full self driving or assistance features, take off even more, and it’s basically a $59K artpiece in the driveway that you toy with on church day which has nothing to do with a single-car owning commuter like I was talking about.

I clarify that the above was in response to people being stigmatized by owning ICE in 3-5 years.

Right now, the Model 3 with Dual Motor, premium white interior, a nice exterior color, and some automated driving features, is a very compelling and fun car to drive that has reasonable safety (best ever) and much much cleaner for our air and environment that a lot of people can afford and want to drive and own, so many are buying it. While that’s not all the majority of the masses of the people, it is a high number, and more than fills Tesla’s demand for their ramp capacity.l, and demand is going up. It’s not only ok for many to buy Model 3, but great, and no mass majority population stigma is necessary to spur that demand for Tesla’s currently small percent of the car market, however, life’s need for clean air is definitely one of the top vital obvious demand factors in all those aggregate Tesla buying decisions.

I think stigma will be a bigger role in 15-20 years.

Furthermore, I think the Tesla Pickup is similarly compelling but diversifies into an even more interested and demanding yet different market segment that would love the Tesla Pickup; my $2,000 TSLA stock price price target included Tesla Pickup and Tesla Semi. Many pickup buyers love the environment, go fishing, have land in the hills and mud, and pay $75K to $150K for pickups already. Listening to the TMC staff that say Tesla Pickup is “unnecessary “ is not just folly, but could make Tesla a small fraction of the success it could be if it does pickup, does it as soon as possible, and does it well.

Diversification is always great in such successful businesses and market segments.

Having said all that, I think there’s ample market for Model 3, Y, Pickup, and Semi, as well as PowerWall and PowerPack, for Tesla to continue doing very well, like they did last quarter with demand far exceeding Tesla’s capacity yet exceeding growth goals.

 

[Ludalicious]

Well shortes have been prepared for good news.
This caused dip as I saw in europe. They must have agreed timing to execute such volume in a minute.

View attachment 340124
Their strategy is to press when there are positive facts with SP and FUD and to make us miserable, to give up!
I will never give up! Never!
Please be focused on facts. There are no negative facts!
Market irrationality or difference between value of the stock and SP is increasing.

I wouldnt be so fast though. Tesla maybe selling large amounts of cars. However that may not mean anything if they are negative cashflow after the surge. Those numbers are all that matters and are yet to be seen.

 

[Fact Checking]

Q2 Deliveries Report:
Q1 Deliveries Report:

You left out all of the 2016 and 2017 delivery reports:

2016/Q1: EDGAR Filing Documents for 0001564590-16-015857
2016/Q2: EDGAR Filing Documents for 0001564590-16-021035
2016/Q3: EDGAR Filing Documents for 0001564590-16-025573
2016/Q4: EDGAR Filing Documents for 0001564590-17-000024
2017/Q1: EDGAR Filing Documents for 0001564590-17-005875
2017/Q2: EDGAR Filing Documents for 0001564590-17-013176
2017/Q3: EDGAR Filing Documents for 0001564590-17-019158
2017/Q4: EDGAR Filing Documents for 0001564590-18-000054
2018/Q1: EDGAR Filing Documents for 0001564590-18-007463
2018/Q2: EDGAR Filing Documents for 0001564590-18-016465
2018/Q3: EDGAR Filing Documents for 0001564590-18-023815

The vast majority of which did not include profit guidance or other financials. They are delivery reports. Delivery reports from other carmakers typically do not include financial guidance either.

2018 Q1 and Q2 delivery reports were special exceptions, as Tesla was ramping up extremely fast percentage wise, so they voluntarily added financial guidance to the delivery reports to guide market expectations.

The Q3 delivery report with record high production and record high deliveries is speaking for itself, there's no need for extra guidance in it. You'll have to wait another ~4 weeks to see the Q3 financial report, there's no special treatment for shorts.

 

[oneday]

Looks like there’ll be a battle for $300 towards close.

Edit: something something Sparta.

Edit 2: Something something irrational longer than you can stay solvent.

Edit 3: Today was definitely a win for the bears.
Something something lost the battle but not the war.

 

[oneday]

It’s nothing new. But the ability of the press to publish outright falsities w/r/t Tesla is ludicrous. I don’t know how to link news articles from my TD news feed so I’m including a screenshot.

 

[sub]

This is incorrect. This is the first delivery report in a while that does not mention financial guidance or the reservation list.

Q2 Deliveries Report:

We also reaffirm our guidance for positive GAAP net income and cash flow in Q3 and Q4

The remaining net Model 3 reservations count at the end of Q2 still stood at roughly 420,000
​

Q1 Deliveries Report:

Net Model 3 reservations remained stable through Q1.

laying the groundwork for Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow.​

Net working capital is at negative 2.6 billion.

They had 2.2B in cash at the start of the quarter. However, Accounts Payable - Accounts Receivable was -2.5B. All of these are included in net working capital.

Another way to look at it:

2.2B in cash
- 3B accounts payable
+ 500M accounts recievable
- 300M due in November
- 500M minimum cash balance
- 900M due in March
- 1.2B in committed CapEx
= 3.2B cash needed before Jan 1st



They need 1.4B in unrestricted cash in the bank on January 1st in order to be in compliance with their ABL agreement (900M March debt + 500M minimum cash balance)

The denial is strong in this one. Let me ask a question since I’m not big into the number crunching/accounting, where do “finished goods” fall into this math?

 

[ZenMan]

Looks like there’ll be a battle for $300 towards close.

And IB shows nearly 1m shares still available to sell short. So even though we have been hit repeatedly by 50K share dumps throughout the day, looks like there are still ample shares to continue.

 

[Leo9]

Daily chart looks extremely ugly with that big bearish engulfing. Lower low all day.