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So glad I own TSLA!!!

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  • Mar 19th, 2024 12:54 am
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Deal Fanatic
Nov 9, 2013
5846 posts
7401 upvotes
Edmonton, AB
alanbrenton wrote: How long does a couple hundred million dollars buy Tesla? They are about to turn cash positive from financing activities, correct?
From what I've been reading the "couple hundred million" is payable in 2020.

I think as of late their burn rate has been 200 - 400 million (edited) per quarter as of late. They do a fair amount of window dressing with their financials, but the upcoming Q1 financials provide some insight into this.

There's also a rumour that Deutsche Bank, their ABL provider (and recent ABL extender) requires them to have 1.25 Billion of cash (edited) on hand at any given time as a term for the ABL.
Last edited by treva84 on Apr 8th, 2019 3:07 pm, edited 2 times in total.
Buy quality. Keep calm and go long (and note to self STOP SELLING).
Deal Fanatic
Nov 9, 2013
5846 posts
7401 upvotes
Edmonton, AB
treva84 wrote: From what I've been reading the "couple hundred million" is payable in 2020.

I think as of late their burn rate has been 200 - 400 million per quarter as of late. They do a fair amount of window dressing with their financials, but the upcoming Q1 financials provide some insight into this.

There's also a rumour that Deutsche Bank, their ABL provider (and recent ABL extender) requires them to have 1.5 Billion of cash on hand at any given time as a term for the ABL.
Buy quality. Keep calm and go long (and note to self STOP SELLING).
Deal Addict
Sep 2, 2004
3130 posts
2282 upvotes
I don't know why I find this thread so interesting but I do. I almost always in when there are new posts to read them. Even when I pass a Tesla on the street I think about the posts and the questions around their financial stability.

I wonder if RFD's TSLA bulls are still buying these days. I feel like we haven't heard of any recently, but I could be wrong. Total return for TSLA is -18% in the past 3 months, -8% over 1Y, and +7% over 3Y. More than 10 straight years of net losses and still trading at 10x book value...is there still room to run up?
Deal Fanatic
Nov 9, 2013
5846 posts
7401 upvotes
Edmonton, AB
@Capt. I'm in the same boat. I have no financial vested interest but at the same time I can't help myself.

Also further reading re Q1 19 cash position - a more in depth, somewhat speculative analysis - https://www.perseid-capital.com/blog/20 ... -analysis/

TLDR - Tesla has rough cash position of ~ 1.8 - 2.3 B at the end of Q1 2019
Buy quality. Keep calm and go long (and note to self STOP SELLING).
Deal Addict
User avatar
Jan 19, 2007
1451 posts
811 upvotes
Torontario
treva84 wrote:
I think this missed to account for a lot of Capex expenses that Tesla already committed to
* Retooling for Model Y - comes from where?
* Retooling Model S and X - with the new motors and simpler dash like in M3 - comes from where?

I personally see FCF being extremely negative to fund all this work + the Opex listed above.
Deal Fanatic
Nov 24, 2013
6478 posts
3339 upvotes
Kingston, ON
Bb0231 wrote:
$500MM seems unlikely, but the reasoning presented is abysmal. Presumably it costs less to buy the credits from Tesla than it would be to "pay the fine." If it wasn't P&L favourable for FCA to buy the credits from Tesla, what would the point be? Therefore, comparing the volume of the deal to FCA's profit figure makes no sense, as the deal should net at least slightly favourable to FCA's bottom line.
Deal Addict
Nov 8, 2017
3109 posts
1299 upvotes
Mike15 wrote: $500MM seems unlikely, but the reasoning presented is abysmal. Presumably it costs less to buy the credits from Tesla than it would be to "pay the fine." If it wasn't P&L favourable for FCA to buy the credits from Tesla, what would the point be? Therefore, comparing the volume of the deal to FCA's profit figure makes no sense, as the deal should net at least slightly favourable to FCA's bottom line.
As long as the amount concerned, payment for pooling with Tesla or fines imposed by EU, exceeds FCA's gross profit from EU, FCA's EU operation becomes unsustainable.
Deal Fanatic
Nov 24, 2013
6478 posts
3339 upvotes
Kingston, ON
Bb0231 wrote: As long as the amount concerned, payment for pooling with Tesla or fines imposed by EU, exceeds FCA's gross profit from EU, FCA's EU operation becomes unsustainable.
You're misunderstanding me, and possibly how accounting works.

x= Profit FCA would have made if the EU had no emissions penalty
y= Penalty FCA would owe
z= Payment to Tesla in lieu of penalty

If (x-z) is < (x-y), FCA is increasing its bottom line profit from the arrangement with Tesla, not jeopardizing it. Let's run with the numbers above and assume x, FCA's profit from EU operations before emissions penalties, is $800MM, z is $500MM, and y is nominally higher than z, say $505MM.

x-z = $300MM profit
x-y = $295MM profit

Paying the penalty or buying the credits is an income statement transaction that goes into determining what the final profit is. You and the tweet you quoted seem to be assume otherwise.
Deal Addict
Nov 8, 2017
3109 posts
1299 upvotes
Mike15 wrote: You're misunderstanding me, and possibly how accounting works.

x= Profit FCA would have made if the EU had no emissions penalty
y= Penalty FCA would owe
z= Payment to Tesla in lieu of penalty

If (x-z) is < (x-y), FCA is increasing its bottom line profit from the arrangement with Tesla, not jeopardizing it. Let's run with the numbers above and assume x, FCA's profit from EU operations before emissions penalties, is $800MM, z is $500MM, and y is nominally higher than z, say $505MM.

x-z = $300MM profit
x-y = $295MM profit

Paying the penalty or buying the credits is an income statement transaction that goes into determining what the final profit is. You and the tweet you quoted seem to be assume otherwise.
Why don't you leave aside all your make-up numbers and check how much FCA was making in Europe last year?
How difficult is it for you to accept Reality???

There's no assumption from me or the tweet I quoted, they're simply Facts!
Deal Expert
User avatar
Apr 21, 2004
58618 posts
24555 upvotes
treva84 wrote: Why stop at the moon when you can go to Mars?
Lol. That's right. To infiniti and beyond.
Deal Fanatic
Apr 5, 2016
6116 posts
4613 upvotes
Calgary/Vancouver
Capt. wrote: I don't know why I find this thread so interesting but I do. I almost always in when there are new posts to read them. Even when I pass a Tesla on the street I think about the posts and the questions around their financial stability.

I wonder if RFD's TSLA bulls are still buying these days. I feel like we haven't heard of any recently, but I could be wrong. Total return for TSLA is -18% in the past 3 months, -8% over 1Y, and +7% over 3Y. More than 10 straight years of net losses and still trading at 10x book value...is there still room to run up?
I just went in today to swing trade for a small amount. $260-270 is like the floor for the past couple years then it shoots back up to $330ish. Someone is propping it up so might as well go with the flow.
Deal Guru
Aug 17, 2008
10943 posts
13445 upvotes
No axe on the stock, but I found this an interesting read.

For the full article, click on the link.

https://www.latimes.com/business/autos/ ... story.html

Coles Notes version

The $TslaQ Phenomenon

Few corporate leaders have developed as loyal a following as Elon Musk’s, thanks in part to his freewheeling Twitter feed. Few have attracted as many skeptics as Musk has too; of 173 million Tesla shares, about 17% are held by short sellers. The latter have found a way to connect via the Twitter hashtag $TslaQ — and the mostly anonymous posters don’t confine themselves to merely griping online. Contributors divide up research duties, such as using commercial databases to track Tesla-loaded ships or doing reconnaissance, sometimes from airplanes or drones.
Answer not a fool according to his folly, lest thou also be like unto him = Never argue with an idiot, they'll only bring you down to their level & beat you with experience
Deal Guru
User avatar
Sep 8, 2007
10938 posts
14389 upvotes
Way Out of GTA
MrMom wrote: No axe on the stock, but I found this an interesting read.

For the full article, click on the link.

https://www.latimes.com/business/autos/ ... story.html

Coles Notes version

The $TslaQ Phenomenon

Few corporate leaders have developed as loyal a following as Elon Musk’s, thanks in part to his freewheeling Twitter feed. Few have attracted as many skeptics as Musk has too; of 173 million Tesla shares, about 17% are held by short sellers. The latter have found a way to connect via the Twitter hashtag $TslaQ — and the mostly anonymous posters don’t confine themselves to merely griping online. Contributors divide up research duties, such as using commercial databases to track Tesla-loaded ships or doing reconnaissance, sometimes from airplanes or drones.
While many don’t like Tesla due to Elon, I don’t like it more due to his supporters and fanboys. Fanboys who should be getting their solar roof installed any day now....
Deal Fanatic
Nov 9, 2013
5846 posts
7401 upvotes
Edmonton, AB
cartfan123 wrote: While many don’t like Tesla due to Elon, I don’t like it more due to his supporters and fanboys. Fanboys who should be getting their solar roof installed any day now....
I totally agree.

Markets need diversity of thought and opinion to be efficient. When everyone starts to think the same and act the same you get bubbles (see crypto as a recent example). I think Tesla stock is another current example of a bubble, where amongst bulls group think, willful suspension of disbelief and the narrative that Tesla is saving the world are all being valued over the fundamentals.

With that being said, you can also make the same argument about the bears, where they all believe that Tesla is a rolling bankruptcy, barely held together quarter by quarter with duct tape. They also believe everything Elon does is fraudulent with malicious intent and he only exists to personally profit of unsophisticated investors who buy into his bull narrative. I suppose the difference is the bears focus on the numbers, while the bulls focus on the story.
Buy quality. Keep calm and go long (and note to self STOP SELLING).
Deal Expert
User avatar
Apr 21, 2004
58618 posts
24555 upvotes
Maybe many of the Tesla fans (whether or not they own one the cars) have loaded their portfolio with TSLA shares.

So they have to keep defending the company even if it's a moot point.

I've got two friends with Model S'es and they are open to both criticisms and praises. They likely don't own any TSLA stock lol so they're more open-minded.

Can't wait for TSLA's mc to reach $360 so I can start buying put options in a jiffy. Mr. Musks says that mc is doable.
Deal Addict
User avatar
Sep 8, 2014
1911 posts
2367 upvotes
Toronto, ON
I don't own any stock in TSLA directly, nor do I care to do so. However, owning their product (Model S) for 4+ years has been one of the very best purchases ever, and that opinion comes from my wife, a non-car person who loves owning and driving her Model S, and could not imagine going back to any gas powered car, premium vendor or no (she traded away her Mercedes for the Tesla).

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