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That tent won't sleep 3 (count the hands/arms in the bottom pic).

Captain Ned wrote:

That tent won't sleep 3

Maybe not, but it looks to be fairly typical of what would be advertised as a "3 man" tent. I have no idea how the tent industry comes up with their numbers... maybe they use midgets?

We have a 12-man tent for our family of 3. I usually half whatever number is advertised.

Very good quarterly earnings report. The stock market likes it too. 70 jump which is around 20%. Revenue is slightly down year over year but profitability is way up.

Usacomp2k3 wrote:

Very good quarterly earnings report. The stock market likes it too. 70 jump which is around 20%. Revenue is slightly down year over year but profitability is way up.

I don't think it is a good quarterly report actually, so I'm in disagreement with the stock market for what its worth. There are two highlights: a surprise net-profit (I was very much not expecting this), as well as positive cash flow for a 2nd quarter in a row. There's no glossing over these two facts: profit + positive FCF is a good thing for sure. However, the small profit of $150 Million isn't enough to wipe out the $742 Million loss in Q1 2019, or the $389 Million loss in Q2 2019. (Tesla needs to post a $981 Million profit in Q4 2019 to break even this year). So overall net-profit numbers are still in the toilet this year.

Where I have very pessimistic thoughts however, is that revenue. Tesla sold +20% more cars, but made -8% as much revenue (!!). Clearly, the value of Tesla cars has plummeted over the past year. I know that Tesla lost its US Tax credit (or at least, its down to $1875 from $7500 from last year), which probably plays a role, but Tesla sold a significant number of cars overseas this past quarter. So the US-Tax Credit has no effect on oversea-pricing. Why is Tesla unable to maintain their prices? +20% more cars should be +20% more revenue in a logical world. To see a revenue drop while growing suggests well... demand problem. Tesla doesn't seem to be able to command as high prices as before.

CapEx, the investment into equipment, is also down severely from last year. I keep looking at that number: Gigafactory 3 has a bunch of nifty pictures, but where's the money coming from? Building a factory of that size should be seen as a sizable +CapEx investment, but its not really showing up. Now I'm not a conspiracy theorist, I really do trust the 10Q data. My current assumption is that Tesla has cut-back on other CapEx spending to make the Gigafactory 3 possible.

Think about the future projects of Tesla: Model Y, Project Semi, Tesla Truck, Roadster... as well as the Model S refresh and Model Y refresh. These all require factory equipment, these all will require money to build and process the equipment. Its already going to be severely expensive to build the Gigafactory 3, let alone these other projects. So why is CapEx flat?

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On the one hand, Tesla-bulls probably will spin the story as "Renewed focus and cost cutting". Which wouldn't be wrong. On the other hand, the cost-cutting is becoming obvious, with more-and-more complaints about shoddy service. But if the customers are happy with shoddy service, maybe its good for Tesla to take advantage of the euphoria of its fanbase? The long-term sustainability of this profit is in question IMO, it can only last as long as Tesla owners are willing to put up with these cost-cutting measures.

dragontamer5788 wrote:

Usacomp2k3 wrote:

Very good quarterly earnings report. The stock market likes it too. 70 jump which is around 20%. Revenue is slightly down year over year but profitability is way up.

Where I have very pessimistic thoughts however, is that revenue. Tesla sold +20% more cars, but made -8% as much revenue (!!). Clearly, the value of Tesla cars has plummeted over the past year. I know that Tesla lost its US Tax credit (or at least, its down to $1875 from $7500 from last year), which probably plays a role, but Tesla sold a significant number of cars overseas this past quarter. So the US-Tax Credit has no effect on oversea-pricing. Why is Tesla unable to maintain their prices? +20% more cars should be +20% more revenue in a logical world. To see a revenue drop while growing suggests well... demand problem. Tesla doesn't seem to be able to command as high prices as before.

CapEx, the investment into equipment, is also down severely from last year. I keep looking at that number: Gigafactory 3 has a bunch of nifty pictures, but where's the money coming from? Building a factory of that size should be seen as a sizable +CapEx investment, but its not really showing up. Now I'm not a conspiracy theorist, I really do trust the 10Q data. My current assumption is that Tesla has cut-back on other CapEx spending to make the Gigafactory 3 possible.

Revenue is down due to what the industry calls "unfavorable mix". It means you sold a bunch of cheaper or lower content (fewer options) vehicles compared to last quarter/year.

The capital expenditure being down is typical "belt tightening", i.e. we're running out of money folks, spend only on things required to keep the company in business.

Tesla is still basically a money pit. You can always play accounting games to defer costs and pull ahead revenue to produce a quarter or two of profits, but to show profit and positive cash flow on a consistent basis is another thing altogether.

Speaking of accounting games, that profit number is almost *ENTIRELY* composed of forex accounting "gains" and deferred revenue from all those pre-sold features.

In the former case, Tesla didn't actually make any *REAL* Forex profit. In order for that to happen, their holdings of other currencies would have to have appreciated against its native currency (USD). That didn't happen. The Euro actually declined, for example(which is the biggie here, for TSLA). Thus the only way this makes sense if its various foreign subsidiaries over in Europe have Euro-denominated liabilities which are now proportionally worth less (because of the aforementioned EUR declined vis-a-bis USD).

The problem here is that those liabilities are actually with Tesla itself, and this is thus just "balancing" the books. It's not real, it's just accounting. Tesla didn't make any money, it just owes itself less money because of the currency it owes that money in is, due to the vicissitudes of the international finance, currently worth less than another currency (Tesla's native currency--USD).

In the latter case, well, deferred revenue means that Tesla already received the payment--it was a "pre"-payment. In this situation, it was some feature that Tesla pre-sold but had not actually delivered yet. Thus, it was a liability for the exact same amount UNTIL delivery. Delivery happened (of "Car summon assist" or whatever it was), so now the liability goes *poof* and Tesla can book it as profit.

But, again, it received all that money months and years ago. It wasn't even held like in pseudo-escrow or whatever---Tesla could have "spent" it already(though, like all money, it is of course fungible and such a distinction is ...eh). So, again, it's not *REAL*, it's just balancing the books, accounting.

---

In reality, Tesla maybe broke even? Honestly, this filing does not look good. Reference the previous pages in which a Tesla shill constantly said there wasn't a demand problem (among ...other ...things). Yeah, uh--- Tesla is a third down in Norway, a third down in USA, and is now banking on China and its very recent strong subsidies to provide demand. The problem with that is it still firmly establishes the extreme dependency on those, which are generally expiring everywhere else.

And that's just demand, not financials. Because the profit margins still are extremely problematic.

Nice summary of financials:
https://www.youtube.com/watch?v=zMcnhirmcl4

And the upcoming China factory coming online soon:
https://www.youtube.com/watch?v=ImFEfa3s1UM

Lookin good, China factory getting ready to print money, and solar and energy segments are starting to grow rapidly as well, now that Model 3 production is stable and they can afford to shift some resources to those other areas.

The California blackouts may also be the perfect timing for Tesla to push in that direction, lots of people will be looking to buy such products in those relatively affluent parts of the nation.

I was expecting these positive results to happen next year, I'm surprised as well. But hey, sooner is fine as well, not gonna complain about shortsellers losing $1.5B dollars last week lol.

Another interesting development is the possibility of Fiat-Chrysler to use Tesla technology in the future:
https://www.businessinsider.com/fca-fia ... ssion=true

Would be a smart way for them to catch up to other manufacturers when it comes to European emission goals.

wierdo wrote:

Nice summary of financials:
https://www.youtube.com/watch?v=zMcnhirmcl4

I have a hard disagree on that. Just read the data from the horse's mouth: https://ir.tesla.com/static-files/4c1e9 ... 4200a9fa17

There's no reason to spend 40-minutes on a Youtube video when the raw data is easily accessible.

And the upcoming China factory coming online soon:
https://www.youtube.com/watch?v=ImFEfa3s1UM

Also information in the 10Q. You're now up to 1-full hour spent on watching Youtube videos, when you could have instead got a whole bunch of way more relevant information from the 10Q. The sooner you learn to skim through the financial data, the sooner you'll be able to get to the real news instead of simply consuming other people's opinions.

If I'm wrong on something, I'll own it as my own mistake. But there's a sense of pride in being able to form my own opinion on matters, even if it is wrong at times. Besides, I've been right on Q1 and Q2 this year so far, so I'm doing 2/3 (I was clearly mistaken on Q3 financials). I'm willing to bet that Tesla returns to its regularly scheduled losses come Q4, based on my readings here. For those tracking at home, my specific prediction would be a net-loss in the hundreds of millions.

dragontamer5788 wrote:

wierdo wrote:

Nice summary of financials:
https://www.youtube.com/watch?v=zMcnhirmcl4

I have a hard disagree on that. Just read the data from the horse's mouth: https://ir.tesla.com/static-files/4c1e9 ... 4200a9fa17

There's no reason to spend 40-minutes on a Youtube video when the raw data is easily accessible.

And the upcoming China factory coming online soon:
https://www.youtube.com/watch?v=ImFEfa3s1UM

Also information in the 10Q. You're now up to 1-full hour spent on watching Youtube videos, when you could have instead got a whole bunch of way more relevant information from the 10Q. The sooner you learn to skim through the financial data, the sooner you'll be able to get to the real news instead of simply consuming other people's opinions.



If I'm wrong on something, I'll own it as my own mistake. But there's a sense of pride in being able to form my own opinion on matters, even if it is wrong at times. Besides, I've been right on Q1 and Q2 this year so far, so I'm doing 2/3 (I was clearly mistaken on Q3 financials). I'm willing to bet that Tesla returns to its regularly scheduled losses come Q4, based on my readings here. For those tracking at home, my specific prediction would be a net-loss in the hundreds of millions.

Well, Tesla didn't have a 4Q loss, but it looks like they had to sell the furniture to do it. Revenue is down versus 2018. Oof. Hopefully China can save them, and they just cancel/stop production on anything with gull wing doors. They gotta pick a few key models and go all in on them.

roncat wrote:

Well, Tesla didn't have a 4Q loss, but it looks like they had to sell the furniture to do it. Revenue is down versus 2018. Oof. Hopefully China can save them, and they just cancel/stop production on anything with gull wing doors. They gotta pick a few key models and go all in on them.

No "oof" needed there, Wallstreet analysts are going nuts right now, they're starting to get it, finally catching up to what retail investors knew for much earlier with their more in-depth research.

Startups are all about growth and R&D reinvestment, shouldn't treat them like some GM or Ford incumbents with stagnant growth, or you'll miss out on another Amazon story. That's the mistake allot of Wall-street bears made and they're getting burned now.

Tesla continues to put it back into further growth, the competition is beginning to panic in a visible manner now, Ford is coming out with a literal clone of the Model Y, which is awesome, good for them.

Next they're building a new factory in Berlin, and they're at the point where they're becoming self-funded. The stock went from $180 to passing $750, so Wallstreet is finally pulling its head out of its behind to see the bigger picture. The stock is so high that lenders will likely convert loans to buy-back stock options at this point.

Tesla is now the second biggest auto manufacturer on the planet by market cap, passing VW and valued higher than Ford and GM combined. Only Toyota is ahead with their massive $200B market cap.

The market is coming around to the idea that Tesla is the trend-setter that's shifting mobility from its flip-phones to smartphones phase. Most importantly they are now beginning to understand that it's not just a "car" company, it's much more. Just like Amazon was not just an "online bookstore" business.

It's possible that Q1 can experience the usual seasonality and then pick back up in Q2-4, but not much of a concern financially now that Tesla's got a >$6B war chest of liquid assets, growing once again by almost a billion.

This short video sums it up nicely I think (second half):
https://cleantechnica.com/2020/02/03/ge ... n-soaring/

Other fun ones:

(ex-skeptic)"Jim Cramer: Tesla's recent run reminds him of how Amazon and Netflix found success"
https://www.youtube.com/watch?v=9t1kR43xctQ

"Tesla Q4 Earnings Analysis (crushed it!)"
https://www.youtube.com/watch?v=A1bbrUBmMF4

dragontamer5788 wrote:

I have a hard disagree on that. Just read the data from the horse's mouth: https://ir.tesla.com/static-files/4c1e9 ... 4200a9fa17

There's no reason to spend 40-minutes on a Youtube video when the raw data is easily accessible.
...
The sooner you learn to skim through the financial data, the sooner you'll be able to get to the real news instead of simply consuming other people's opinions.
...
I'm willing to bet that Tesla returns to its regularly scheduled losses come Q4, based on my readings here. For those tracking at home, my specific prediction would be a net-loss in the hundreds of millions.

Man what a difference six months make.

Tesla is now being included in the S&P 500, but they're struggling to figure out how to digest this now $427B behemoth in one sitting, so they're having a meeting of stakeholders to debate if they should do it in two phases instead, which is quite unusual.

The "raw data" vs "big picture" results in action:

https://www.youtube.com/watch?v=58kGdcF3xV0


https://www.youtube.com/watch?v=d1oBvFTPz_Y

Tesla stock went from $150 to almost $2500 - before the recent 1to5 stock split - within a year, Q3 2020 was solid, and the upcoming Q4 is expected to be a record blowout quarter.

Like I said, it's hard to catch the next Amazon when looking at the surface level like most of Wallstreet tends to do, a result of their shallow "shotgun" approach to research.

Retail investors, on the other hand, prefer picking a handful of promising stocks and then go deep into their fundamentals against the backdrop of converging market/social/technological trends.

Example, this discussion with a mining expert on related disruptions behind the scenes:

https://www.youtube.com/watch?v=eyI9nnvHbno