Is Tesla TOAST ?

[thriftyandboringinohio]

Re: Is Tesla TOAST ?

GRG55 your sense of humor is delightful. Let's run some numbers.

In 2017, the U.S. sold about 6.3 million cars (that excludes light trucks like pickups, SUVs and vans). Divide that by four and we get 1.75 million cars per quarter.
Tesla produced 83,000 cars last quarter. That is a 5% market share.
I expect to see lots of glowing reports bragging about Tesla's rate of production growth, because most people don't understand how easy it is to double almost-nothing to create still-almost-nothing.

[jk]

Re: Is Tesla TOAST ?

i understand that tesla got its "profit" via accounting shenanigans- e.g. capitalizing labor costs.

[thriftyandboringinohio]

Re: Is Tesla TOAST ?

i understand that tesla got its "profit" via accounting shenanigans- e.g. capitalizing labor costs.

Accounting for a manufacturing company can be phonied up in countless ways, at least over a month or a quarter or a single year. Of course eventually the truth comes out, but you can make one or two reporting periods shine brightly.

Delay the processing of returned goods and cancelled orders. Ship units you know darn well are wrong and will come back soon, even horribly wrong like partially assembled and non-functional. Get careless with you records for rework and count the same unit as "produced" three times. Hold the books open and count units you shipped on the 32nd and 33rd of the month. Hold scrap units and returned units in a warehouse and count the inventory as goods sold and goods shipped. Ship units back and forth between two plants and count them as shipped every time they touch one of the loading docks. Hold the 401K contributions of employees for 60 days and show it as cash on hand. Stop paying suppliers for 60 days. The possibilities are endless...

[dcarrigg]

Re: Is Tesla TOAST ?

Notably absent was any update on the Q3 preorders numbers. And the Q2 numbers were a joke. There have been years' worth of pent-up demand. Luxury cars have traditionally made up about 5-7% of US market-share, about the same as vans. They've been at about 6% lately. Cadillac and Lexus figures for 2017 were down to about 1% and 1.5% respectively. BMW was down to about 1.5%. Mercedes was up to around 2%. Tesla made up about a quarter of a percent. Now it's poised to bump. Question is, how much market share is there to eat up? We're at the peak of a business cycle. During the recession, even with incentives, the luxury segment dropped to the high 4%s. It hasn't bounced back to the 7%s yet, even in this recovery. Maybe it will for 2018. But $50k+ new cars are some of the easiest fat to trim when things go topsy-turvy...

[jk]

Re: Is Tesla TOAST ?

this link, amusingly titled "q3 results secured," explains some evidence of accounting fraud:
http://adventuresincapitalism.com/20...sults-secured/

[dcarrigg]

Re: Is Tesla TOAST ?

Huh. Always thought a big Q/Q achilles heel was the lack of dealer network and corresponding high SG&A bar to clear. But what are the odds that the overall SG&A costs went down Q/Q even as they sold double the cars? I mean, typically, when you're selling big honking things like cars that have to be moved/registered/delivered/etc/etc you can't move double the number for less money. They reported overall operating expenses down too. More to the point, given their PR track record, if they did discover/invent some miraculous way to achieve this, what are the odds they wouldn't be screaming about it from the rooftops? I mean, how do you achieve SG&A rates lower than Honda without a dealer network? Tesla's gross margin and sg&a costs have tracked each other since its inception. Suddenly they take off like a shot in opposite directions? If the books aren't illegally cooked, you'd at least expect them to have shifted expenses out of the sg&a category and into cost of sales. But that dropped from 81% per unit to 74% per unit too. I mean, sg&a and sales costs per unit can drop with scale. Fine. But for operations costs to be cheaper this quarter to do double the numbers of the last quarter? That's some goddamn magic right there.

[GRG55]

Re: Is Tesla TOAST ?

If it looks like an accounting fraud, swims like an accounting fraud and quacks like an accounting fraud, it's probably an accounting fraud. ;-)

[jk]

Re: Is Tesla TOAST ?

[GRG55]

Re: Is Tesla TOAST ?

[jk]

Re: Is Tesla TOAST ?

someone's tweet:
More



My worst single stock investment mistakes had one thing in common: I didn’t pay enough attention to the bond market. Well, here is Tesla, showing a remarkable divergence between the two...












fwiw i bought some jan 2020 tsla puts when the stock rallied a few weeks ago on some news i've forgotten.

[santafe2]

Re: Is Tesla TOAST ?

I don't think I can get to my original Tesla is toast post but in that post I warned that Elon's solar company, Solar City was much worse than Tesla. I was in the business so it wasn't too difficult to put my stamp on that prediction. Elon strong armed Tesla investors to take that dead company under its masthead some time ago. Tesla is dead but no one knows when. Maybe the petulant child president is so pissed off at GM he kills the rebates to punish them or Elon charms him enough to keep the rebate in play. You can't time these things.

Buffett stepped in, in 2008 and gave moribund GE another decade of life. They were days from going under. Apparently they've pissed off the godfather of American capitalism now and they can finally die.

Einstein famously said, "God doesn't play dice.", but Hawking has warned us that god shoots craps a trillion times a second. So who knows when?

[dcarrigg]

Re: Is Tesla TOAST ?

Total aside, but this post reminded me of it. I was talking with someone the other day who said the common wisdom: The thing about corporations is the bad ones die, unlike governments, which last forever. Thing is, the average government is what? 35 years old? How long in the tooth is the average S&P 500 company? Maybe 20? Truth is one doesn't last so much longer than the other. The US Constitution, like JP Morgan Chase or the Bank of New York Mellon or Molson Coors or Colgate Palmolive, just happens to be particularly old and in a country full of more recently acquired pieces, so it sounds more plausible. Harder to buy the creative destruction in business but not in government argument across the pond when you're in a 500 year old brewery in a country with a 50 year old constitution or something. Big things change very fast, and with little warning.

[vt]

Re: Is Tesla TOAST ?

Actually things have been changed via amendments to the Constitution. The framers made it not too easy in order to have broad agreement.

There is also the option of a Constitutional Convention, which seems to be a goal of some on the right. In fact they are only a few states away, but will not likely get enough to reach their goal.

Such a convention could open up a lot of doors most don't want to go through.

[dcarrigg]

Re: Is Tesla TOAST ?

Actually things have been changed via amendments to the Constitution. The framers made it not too easy in order to have broad agreement.

There is also the option of a Constitutional Convention, which seems to be a goal of some on the right. In fact they are only a few states away, but will not likely get enough to reach their goal.

Such a convention could open up a lot of doors most don't want to go through.

A one-party convention to re-write the constitution would be a very, very bad idea indeed.

[Southernguy]

Re: Is Tesla TOAST ?

From some time I have been making my mind around Tesla. Resumed: Tesla is not toast. On the contrary, Tesla is, probably a buy. Big automakers which have been long dragging their feet regarding ev's adoption are facing extinction by Tesla and some other ev players. And this has deep implication for oil future prices as well.
https://www.youtube.com/watch?v=aUC6...fA38rc0zAK%3A6
Written article by Ross Tessian: https://seekingalpha.com/article/422...-beyond?page=7

Make your bets....please

I don't think I can get to my original Tesla is toast post but in that post I warned that Elon's solar company, Solar City was much worse than Tesla. I was in the business so it wasn't too difficult to put my stamp on that prediction. Elon strong armed Tesla investors to take that dead company under its masthead some time ago. Tesla is dead but no one knows when. Maybe the petulant child president is so pissed off at GM he kills the rebates to punish them or Elon charms him enough to keep the rebate in play. You can't time these things.

Buffett stepped in, in 2008 and gave moribund GE another decade of life. They were days from going under. Apparently they've pissed off the godfather of American capitalism now and they can finally die.

Einstein famously said, "God doesn't play dice.", but Hawking has warned us that god shoots craps a trillion times a second. So who knows when?