TSLA - Tesla Motors

[arcube]

I"m enjoying the popcorn  ;D

 

Have fun  ;)

[Dalal.Holdings]

Your "growth" metrics indicate revenue increased 15% in 2019 over 2018. The market is valuing a 15% growth rate (consistently declining) and 0% ROIC at 6x revenue and who knows what multiples on whatever cash flow metric you choose. Doesn't seem like a very appetizing proposition.

 

Not at all an appetizing proposition when you don't value what the Company has created in real value in terms of technology and left majority of competition in dust and continued market share gains.

 

If only if investing were as easy as computing avg ROIC over 10 years and just buying the companies with the highest ROIC...

[Dalal.Holdings]

Why do you think they keep on selling more cars and increasing revenues????????? Someone please answer this question.

 

Because it is a bunch of hippie soyboys falling for the fraud and risking their future to buy these high priced crappy toys!.. It's a commune and a cult.

 

There are no rational buyers for the product..just fad lovers...you get the drift. ; ). Whoever is shelling the amount of cash to buy one of these is just being a victim of fraud.

 

It's a fraud that keeps producing more technologically advanced vehicles that its customers love year after year! Most elaborate fraud in the history of the world!

 

I heard the Shanghai factory isn't real, just an illusion created by giant Green Screens.

[Guest jalebijim]

Why do you think they keep on selling more cars and increasing revenues????????? Someone please answer this question.

 

Because it is a bunch of hippie soyboys falling for the fraud and risking their future to buy these high priced crappy toys!.. It's a commune and a cult.

 

There are no rational buyers for the product..just fad lovers...you get the drift. ; ). Whoever is shelling the amount of cash to buy one of these is just being a victim of fraud.

 

It's a fraud that keeps producing more technologically advanced vehicles that its customers love year after year! Most elaborate fraud in the history of the world!

 

I heard the Shanghai factory isn't real, just an illusion created by giant Green Screens.

 

 

 

 

 

 

:) Yes, checkout this Deepfake china video. Amazing work done with complete fake Chinese officials and final production Chinese made 12,000 model 3 cars.

 

[jschembs]

 

 

"Why do you think they are now touting "units sold"? Because revenue isn't doing all that well."

 

Tesla revenue per year approximately.

2012 .4 billion

2013 2 billion

2014 3.2 billion

2015 4 billion

2016 7 billion

2017 12 billion

2018 22 billion

2019 25 billion

 

Now do invested capital.

 

$MMs Revenue Invest Cap Rev / IC

2012       413         580         0.71

2013       2,013 1,125 1.79

2014       3,198 2,832 1.13

2015       4,046 5,304 0.76

2016       7,000 15,844 0.44

2017       11,759 20,675 0.57

2018       21,461 21,098 1.02

2019       24,578 21,917 1.12

 

Since, 2012, ROIC has averaged -12%. Last year, when they achieved their highest levels of revenue and cash flow, ROIC was 0%. 0%.

 

Your "growth" metrics indicate revenue increased 15% in 2019 over 2018. The market is valuing a 15% growth rate (consistently declining) and 0% ROIC at 6x revenue and who knows what multiples on whatever cash flow metric you choose. Doesn't seem like a very appetizing proposition.

 

 

 

I am not a very intelligent person and have never made money on EBITDA, ROIC, IRR calculations and will never buy a stock based on a single esoteric measure.

 

Markets are very complex and using a single metric(EBITDA, ROIC) has never worked for me. If it did we could all do a screen of stocks with a ROIC and find companies increasing those and get rich. Simmons would not have needed supercomputers then.

 

Tesla revenue per year approximately and cars sold.

2012 .4 billion          2.65k

2013 2 billion            22.5k

2014 3.2 billion        32k

2015 4 billion            50k

2016 7 billion            75k

2017 12 billion          110k

2018 22 billion          250k

2019 25 billion          366k

 

 

 

Why do you think they keep on selling more cars and increasing revenues????????? Someone please answer this question.

 

I'm not suggesting you use a single metric, I'm just trying to help frame out the situation. This is an auto manufacturer. Auto manufacturing is very capital intensive, and even the most ruthless operators generate what would generally be considered for most investors inferior returns on invested capital.

 

Yes, they make very cool, aesthetically-pleasing cars. Yes, they've grown far more rapidly than any other auto manufacturers. But, growth is only part of the input to value. Elon Musk has NEVER shown an ability to profitably run any of the businesses he has been associated with, so it's always been curious to me he is given the benefit of that doubt, but alas here we are.

 

Getting back to the difficulties of being an auto manufacturer. There is no "exponential ramp" of production. He has already shown either ineptitude or deceit with respect to his understanding of NUMMI's capacity, claiming in 2016 they could produce 1 mm vehicles, now content on ~500k. To get to the production levels implied in any valuation model requires years and billions more of capital. I don't doubt his ability to raise billions more in capital, but that all puts a damper on the value of current equity, and calls into question how much value one should ascribe future growth on current equity.

[Dalal.Holdings]

Why do you think they keep on selling more cars and increasing revenues????????? Someone please answer this question.

 

Because it is a bunch of hippie soyboys falling for the fraud and risking their future to buy these high priced crappy toys!.. It's a commune and a cult.

 

There are no rational buyers for the product..just fad lovers...you get the drift. ; ). Whoever is shelling the amount of cash to buy one of these is just being a victim of fraud.

 

It's a fraud that keeps producing more technologically advanced vehicles that its customers love year after year! Most elaborate fraud in the history of the world!

 

I heard the Shanghai factory isn't real, just an illusion created by giant Green Screens.

 

 

 

 

 

 

:) Yes, checkout this Deepfake china video. Amazing work done with complete fake Chinese officials and final production Chinese made 12,000 model 3 cars.

 

 

Well TSLAQ used to say the Shanghai site was just going to be a puddle of mud and would never be complete in a year like "fraud Elon" said it would. So it must not exist. They got upset when a guy posted drone footage showing construction of the factory progressing rapidly too...

 

TSLAQ no longer brings up the Shanghai factory too often. Now it's the fact that they don't provide minute by minute cash figures on conference calls that indicates it's all a fraud...

 

The shorts' goalposts move so fast you can't even see them!

[Guest jalebijim]

 

 

 

 

 

 

 

"I'm just trying to help frame out the situation. This is an auto manufacturer. This is an auto manufacturer. Auto manufacturing is very capital intensive, and even the most ruthless operators generate what would generally be considered for most investors inferior returns on invested capital."

 

This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).

 

Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.

 

 

 

 

 

"Elon Musk has NEVER shown an ability to profitably run any of the businesses he has been associated with."

 

Wrong again. https://finance.yahoo.com/quote/PYPL?p=PYPL

 

 

 

 

 

"Getting back to the difficulties of being an auto manufacturer. There is no "exponential ramp" of production. He has already shown either ineptitude or deceit with respect to his understanding of NUMMI's capacity, claiming in 2016 they could produce 1 mm vehicles, now content on ~500k."

 

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

[jschembs]

 

 

 

 

 

 

 

"I'm just trying to help frame out the situation. This is an auto manufacturer. This is an auto manufacturer. Auto manufacturing is very capital intensive, and even the most ruthless operators generate what would generally be considered for most investors inferior returns on invested capital."

 

This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).

 

Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.

 

 

 

 

 

"Elon Musk has NEVER shown an ability to profitably run any of the businesses he has been associated with."

 

Wrong again. https://finance.yahoo.com/quote/PYPL?p=PYPL

 

 

 

 

 

"Getting back to the difficulties of being an auto manufacturer. There is no "exponential ramp" of production. He has already shown either ineptitude or deceit with respect to his understanding of NUMMI's capacity, claiming in 2016 they could produce 1 mm vehicles, now content on ~500k."

 

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

1. The razor / razor blade model you cite involves frequent, ongoing purchases of a lower-priced supplement to the original purchase. Not sure the connection to a software add-on. You think they're going to get people to keep paying for various software updates?

2. What on earth does PayPal's current financial position have to do with X.com?

3. How is it narcissistic to call out the fact he (in this instance, but I can cite many others) significantly overpromised and underdelivered?

[Guest jalebijim]

 

 

 

 

 

 

 

"I'm just trying to help frame out the situation. This is an auto manufacturer. This is an auto manufacturer. Auto manufacturing is very capital intensive, and even the most ruthless operators generate what would generally be considered for most investors inferior returns on invested capital."

 

This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).

 

Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.

 

 

 

 

 

"Elon Musk has NEVER shown an ability to profitably run any of the businesses he has been associated with."

 

Wrong again. https://finance.yahoo.com/quote/PYPL?p=PYPL

 

 

 

 

 

"Getting back to the difficulties of being an auto manufacturer. There is no "exponential ramp" of production. He has already shown either ineptitude or deceit with respect to his understanding of NUMMI's capacity, claiming in 2016 they could produce 1 mm vehicles, now content on ~500k."

 

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

1. The razor / razor blade model you cite involves frequent, ongoing purchases of a lower-priced supplement to the original purchase. Not sure the connection to a software add-on. You think they're going to get people to keep paying for various software updates?

2. What on earth does PayPal's current financial position have to do with X.com?

3. How is it narcissistic to call out the fact he (in this instance, but I can cite many others) significantly overpromised and underdelivered?

 

 

 

1. The razor / razor blade model you cite involves frequent, ongoing purchases of a lower-priced supplement to the original purchase. Not sure the connection to a software add-on. You think they're going to get people to keep paying for various software updates?

 

Wrong again. Software $7000 one time cost. Updates are free, sir you have to go do your research, I cannot educate you all day.

 

 

 

2. What on earth does PayPal's current financial position have to do with X.com?

 

x.com = Paypal

 

 

3. How is it narcissistic to call out the fact he (in this instance, but I can cite many others) significantly overpromised and underdelivered?

 

Narcissim = Man makes factory making 500k cars and saying he failed because he did not built 1 million.

Narcissim = Man lands rockets upside down, starts multiple billion dollar companies and thinking you know more about finance than him.

[jschembs]

 

 

 

 

 

 

 

"I'm just trying to help frame out the situation. This is an auto manufacturer. This is an auto manufacturer. Auto manufacturing is very capital intensive, and even the most ruthless operators generate what would generally be considered for most investors inferior returns on invested capital."

 

This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).

 

Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.

 

 

 

 

 

"Elon Musk has NEVER shown an ability to profitably run any of the businesses he has been associated with."

 

Wrong again. https://finance.yahoo.com/quote/PYPL?p=PYPL

 

 

 

 

 

"Getting back to the difficulties of being an auto manufacturer. There is no "exponential ramp" of production. He has already shown either ineptitude or deceit with respect to his understanding of NUMMI's capacity, claiming in 2016 they could produce 1 mm vehicles, now content on ~500k."

 

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

1. The razor / razor blade model you cite involves frequent, ongoing purchases of a lower-priced supplement to the original purchase. Not sure the connection to a software add-on. You think they're going to get people to keep paying for various software updates?

2. What on earth does PayPal's current financial position have to do with X.com?

3. How is it narcissistic to call out the fact he (in this instance, but I can cite many others) significantly overpromised and underdelivered?

 

 

 

1. The razor / razor blade model you cite involves frequent, ongoing purchases of a lower-priced supplement to the original purchase. Not sure the connection to a software add-on. You think they're going to get people to keep paying for various software updates?

 

Wrong again. Software $7000 one time cost. Updates are free, sir you have to go do your research, I cannot educate you all day.

 

 

 

2. What on earth does PayPal's current financial position have to do with X.com?

 

x.com = Paypal

 

 

3. How is it narcissistic to call out the fact he (in this instance, but I can cite many others) significantly overpromised and underdelivered?

 

Narcissim = Man makes factory making 500k cars and saying he failed because he did not built 1 million.

Narcissim = Man lands rockets upside down, starts multiple billion dollar companies and thinking you know more about finance than him.

 

Okay, you win. I'm done here.

[fareastwarriors]

You guys make it also too personal.

 

 

[jschembs]

You guys make it also too personal.

 

Sorry, didn't mean to imply that in my response. I just didn't have anything further.

[Haasje]

 

 

 

 

 

"Why do you think they are now touting "units sold"? "

 

-I am not paying attention to what they "touting", I really pay attention to increasing sales, it is very important to me. Business 101---- more products sold over time at a stable margin will lead to profit.

 

*Thank for engaging in the discussion. I think it is really terrific that you analyze the company and look at important metrics and not wave everything away with "Musk will solve that" or "in the future it will be HUGE". I'm not sarcastic.

 

-2019 366k vehicles sold is huge number for a new car company.

 

*Look Elon Musk on the earnings call before the last one talked about a 50% growth rate (in terms of units sold, so a bit less for revenue no doubt) and he took that down to 40% this quarter (but allowing for the effect of the Pandemic, so he actually increased the stakes imo). At that growth rate of units sold. IF the company succeeds (and it would admittedly be quite a feat) in 5 years it would be selling 1/3rd of the cars that GM sells on average per year. Yet, it is trading at 4-5x the valuation.

 

*Is 16 years really new? The average company is publicly traded for something like 3 years... You're doing them an undeserved favor by judging them as a startup.

 

 

"Clearly cars sold went up fast from extremely modest levels. But strangely profit went nowhere. Where's that money going?"

 

Profit is not increasing because they are reinvesting in the business, just a small example.

 

For example(hard to fake hard assets land/hardware to charge/easy to check this metric):

2016 Q2 supercharger 600

2020 super chargers 1900

 

 

R&D

2016 Q2 200 million

2019 about 350 million per quarter

 

It takes a lot of money to do all these things.

 

*Ok, interesting that you mention R&D and Capex. Capex is in massive decline. They aren't reinvesting in the business. That is one of the things I really don't like. They are cutting costs to the bone but no profit is showing up...

 

R&D is the same story. It is falling fast. Especially R&D vs revenue. Meanwhile, they keep talking about their innovations. Tesla is based in one of the highest cost locations in the world. GM spends about 4x what Tesla spends on an annual basis.

 

https://www.bloomberg.com/news/articles/2020-01-30/tesla-s-capex-falls-behind-depreciation-for-first-time-chart

https://stockdividendscreener.com/auto-manufacturers/gm-vs-tesla-in-research-and-development-costs/

 

"I have it at 16% and in a declining trend"

 

Care to share this math? Even without the fiat ZEV credits I have it at about 20%

 

*automotive only?

 

"Sensation. Media attention. Sheep. Just $100. Bragging rights. It looks cool. Let's keep this clear: it has done zero volume in cybertrucks."

 

Ok, let see what happened before.

 

Model 3 200k pre orders in about 24 hours before launch sight unseen-----Actual sales about 456k so far.

Cybertruck 500k pre order----------can hit the Model 3 numbers, you have actual company precedence.

 

You are making a big mistake in this conclusion.

 

*Clearly they have sold zero cybertrucks. You think it will be in production before the Semi or after? Before the Roadster 2 or after? You think Tesla will bring it to market with their own designed quad or a stolen Japanese one?

 

Maybe it will sell. I'm short but I'm excited with every car Tesla sells because it shortens the time to the next capital raise and increases the outstanding liabilities.

 

"To a lot of these questions surrounding Musk with the general thrust of; why did no one do this before. The answer is; because it is not a profitable activity."

 

I look at it as a mark of IQ and ability to execute. A man who can do such an act, might be able to make a very profitable car company.

 

*You can do that. Or you can look at the car company he did not create and conclude it is not profitable.

 

[Haasje]

 

Tesla is just the worst investment case I've ever looked at in the $100 billion+ category ever.

 

$130b market cap

4.8x sales

45x EV/EBITDA

CEO who settled for securities fraud.

Suspicious accounting

Every quarter I have to read about *deliveries* because they just can't come out and say they sold some cars.

Recognizing a portion of FSD because the car can stop at every light...

Promising a million robotaxis and moneyprinters (I'm not making this stuff up, he does, the guy is a total clown)

 

Amazon clearly and consciously developed a strong network effect. Alphabet has a near-monopoly on search. They may be too pricey from time to time but they are great businesses.

 

Tesla is at best a company in a bad industry. But worse than that it doesn't even stand out positively within the industry. The only thing it is good at is raising money at ridiculous valuations. It raised something like $20 billion of capital in the past 16 years. With that, they managed to get a little over 1 million cars on the road (not too mention the many, many billions of subsidies).

 

And they still need ever more capital. Because they are losing money while putting liability after liability out on the road. They are consistently selling the future to make the present look prettier (and it still doesn't look prettier).

 

There is nothing new you have really said here than that not been said in 350+ pages on this topic on the board. Zero.

 

Value it using traditional methods you are tempted to short yet so many butt hurts out here rooting for an end to an excellent design and engineering organization whose full impact is yet to be known.

 

Also, calling Tesla a metal bender gives us an idea how much of understanding or value you give to true cutting edge engineering. All your financial stats have been rehashed by WS analysts for years and yet this thing seems to go up. I guess your assumption would be that if we don't view it through a similar lens as yours, we might be the suckers here.

 

Having the privilege to own a vehicle that has only improved over the years of ownership and has really required no servicing, I can attest that this is no metal bender. When it comes to engineering of a vehicle (tech design hardware/software/embedded systems and the vehicle engineering in itself), there is no comparison. None. You drive one and then sit in pimped Cadillac/Benz and that becomes a joke. I suggest you search for third party sources and hear about Tesla engineering from folks whose clients have been every auto OEM in the world. Maybe that can help you understand a bit more.

 

You don't have to invest. You clearly seem to have a conviction this is know-nothing fad company led by a moron, this might be the best time to short it, heck Elon will lend a hand too in the next few days for short thesis!!

 

1. Value it using traditional methods

Ok, bring it. Value it with your modern method.

 

2. you are tempted to short yet so many butt hurts out here rooting for an end to an excellent design and engineering organization whose full impact is yet to be known.

My point is not that the cars are ugly. I personally like the model 3 look. But I also like the I-Pace in some colors a lot. 

 

3. All your financial stats have been rehashed by WS analysts for years and yet this thing seems to go up.

WS analysts are pumping this to get the fees on the billions of capital raises. Perhaps another one coming with all the recent ridiculous upgrades during a pandemic. It goes up but that doesn't mean anything. The numbers are heavily manipulated. In 99' a lot of trash went up 1000%'s. Later a lot of it went bust.

 

4. Maybe you are influenced by endowment bias. To say there is no comparison on those metrics is a huge overstatement. The Porsche is pretty cool. But whatever the car is great argument is completely irrelevant. Assume I believe you and its the greatest thing since sliced bread. If you keep selling the greatest thing since sliced priced below its true cost; you are still going bust.

 

5. I'm shorting the hell out of it of course. The opportunity of a lifetime.

 

You start the argument calling it a metal bender and now you say the part that proves its not a metal bender is just a great argument but not worthwhile for the discussion now pertaining to the value of the company.

 

I don't need to convince you on what metrics you should use to evaluate this investment because your premise is that this is a giant accounting fraud and Elon is on it and pretty soon this will bust. That is no sensible way to start but I am not going to convince you to think otherwise. In fact, don't even assume in one of your cases -"what if there is no accounting fraud?"  I would encourage you to make it heavy conviction short bet if you haven't already.

 

You are rehashing a bunch of points from 100s of decks available from the shorts of the kind of Spiegel etc. and there is no convincing to be done here that you may be off.

 

-can you clarify what proves it is not a metal-bender?

-I'm not talking about metrics, that's you. You dismissed my method of valuation, I'm asking you to then show the right approach. I'm genuinely curious how you get to a bull case.

-I'm not sure it will go bust soon because there continue to be people that give him money at $700/share. All the money going in is disappearing though. At some point that's not sustainable

-If there's no accounting fraud it still doesn't look good. I see it as a bonus thesis that is likely to get tested in this pandemic crisis.

-Thanks I'll make sure. Please sell me some OOTM puts if you are so sure it isn't a fraud.

[Haasje]

Why do you think they keep on selling more cars and increasing revenues??? Someone please answer this question.

 

Because they are undercosting them and making up the difference with shareholder money.

 

 

Well TSLAQ used to say the Shanghai site was just going to be a puddle of mud and would never be complete in a year like "fraud Elon" said it would. So it must not exist. They got upset when a guy posted drone footage showing construction of the factory progressing rapidly too...

 

TSLAQ no longer brings up the Shanghai factory too often. Now it's the fact that they don't provide minute by minute cash figures on conference calls that indicates it's all a fraud...

 

The shorts' goalposts move so fast you can't even see them!

 

 

I admit I’m surprised the factory in China went up so fast. That’s unusual. I’m also mystified at the way they got it financed by mortgaging its future and expected it to require higher CapEx. As a long, do you think it is an advantage or a disadvantage they just finished that factory? How many cars do they need to sell out of there to break-even on that operation? Will it distract the CEO further? He now has Space X and Tesla to run and China is a faraway location. That complicates things.

 

“This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).”

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

“Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.”

 

Wake me up when the new paradigm shows up on the bottom line.

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

Hopefully, you are not implying Musk started Tesla. He employs thousands of people and made about a million cars but he also burned $16 billion+ of shareholder money AND $13 billion of debt financing as well as making use of countless buyer financing subsidies. I don’t want to dismiss the above as unimpressive (raising this amount of capital just for Tesla is actually impressive) but I’m questioning the sustainability of the operating business. I worry about that because if the operations are not sustainable raising capital will become increasingly difficult.

 

Wrong again. Software $7000 one time cost. Updates are free, sir you have to go do your research, I cannot educate you all day.

 

You came with the printer/inkjet model (which no longer works for them but that aside) but then you ridicule if it is pointed out Tesla does not operate under that model. Look the model Elon Musk invented is a complete new paradigm. You can't compare it to old-school business models that require sustainable profits.

 

Raise shareholder money --> Sell metal at a loss ---> Sell software to turn a profit

 

Problem is that the latter part isn't working and if it starts working I doubt its good enough to offset the unsustainable shareholder and government subsidies. 

 

[Guest jalebijim]

Why do you think they keep on selling more cars and increasing revenues??? Someone please answer this question.

 

Because they are undercosting them and making up the difference with shareholder money.

 

 

Well TSLAQ used to say the Shanghai site was just going to be a puddle of mud and would never be complete in a year like "fraud Elon" said it would. So it must not exist. They got upset when a guy posted drone footage showing construction of the factory progressing rapidly too...

 

TSLAQ no longer brings up the Shanghai factory too often. Now it's the fact that they don't provide minute by minute cash figures on conference calls that indicates it's all a fraud...

 

The shorts' goalposts move so fast you can't even see them!

 

 

I admit I’m surprised the factory in China went up so fast. That’s unusual. I’m also mystified at the way they got it financed by mortgaging its future and expected it to require higher CapEx. As a long, do you think it is an advantage or a disadvantage they just finished that factory? How many cars do they need to sell out of there to break-even on that operation? Will it distract the CEO further? He now has Space X and Tesla to run and China is a faraway location. That complicates things.

 

“This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).”

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

“Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.”

 

Wake me up when the new paradigm shows up on the bottom line.

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

Hopefully, you are not implying Musk started Tesla. He employs thousands of people and made about a million cars but he also burned $16 billion+ of shareholder money AND $13 billion of debt financing as well as making use of countless buyer financing subsidies. I don’t want to dismiss the above as unimpressive (raising this amount of capital just for Tesla is actually impressive) but I’m questioning the sustainability of the operating business. I worry about that because if the operations are not sustainable raising capital will become increasingly difficult.

 

Wrong again. Software $7000 one time cost. Updates are free, sir you have to go do your research, I cannot educate you all day.

 

You came with the printer/inkjet model (which no longer works for them but that aside) but then you ridicule if it is pointed out Tesla does not operate under that model. Look the model Elon Musk invented is a complete new paradigm. You can't compare it to old-school business models that require sustainable profits.

 

Raise shareholder money --> Sell metal at a loss ---> Sell software to turn a profit

 

Problem is that the latter part isn't working and if it starts working I doubt its good enough to offset the unsustainable shareholder and government subsidies.

 

 

 

 

 

 

Because they are undercosting them and making up the difference with shareholder money.

 

So you think that Tesla was selling 80-$110,000 cars for the last six years because of low price?

 

You think consumer reports rates them as the best in customer satisfaction due to low price?

 

How much money do you think they loose on each model 3?

 

 

 

 

 

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

My question was not how to recognize revenue but which other car company sells software for $7000. Can you please answer that question?

 

Why do you think it does not work well in China?

 

 

 

 

Wake me up when the new paradigm shows up on the bottom line.

 

Sure I will set the alarm right now, by that time hopefully I will have made 2 to the 3x times my money.

 

Siri: Please wake up Haasje when the TSLA stock price is at $1500.

[jmp8822]

 

Tesla is just the worst investment case I've ever looked at in the $100 billion+ category ever.

 

$130b market cap

4.8x sales

45x EV/EBITDA

CEO who settled for securities fraud.

Suspicious accounting

Every quarter I have to read about *deliveries* because they just can't come out and say they sold some cars.

Recognizing a portion of FSD because the car can stop at every light...

Promising a million robotaxis and moneyprinters (I'm not making this stuff up, he does, the guy is a total clown)

 

Amazon clearly and consciously developed a strong network effect. Alphabet has a near-monopoly on search. They may be too pricey from time to time but they are great businesses.

 

Tesla is at best a company in a bad industry. But worse than that it doesn't even stand out positively within the industry. The only thing it is good at is raising money at ridiculous valuations. It raised something like $20 billion of capital in the past 16 years. With that, they managed to get a little over 1 million cars on the road (not too mention the many, many billions of subsidies).

 

And they still need ever more capital. Because they are losing money while putting liability after liability out on the road. They are consistently selling the future to make the present look prettier (and it still doesn't look prettier).

 

There is nothing new you have really said here than that not been said in 350+ pages on this topic on the board. Zero.

 

Value it using traditional methods you are tempted to short yet so many butt hurts out here rooting for an end to an excellent design and engineering organization whose full impact is yet to be known.

 

Also, calling Tesla a metal bender gives us an idea how much of understanding or value you give to true cutting edge engineering. All your financial stats have been rehashed by WS analysts for years and yet this thing seems to go up. I guess your assumption would be that if we don't view it through a similar lens as yours, we might be the suckers here.

 

Having the privilege to own a vehicle that has only improved over the years of ownership and has really required no servicing, I can attest that this is no metal bender. When it comes to engineering of a vehicle (tech design hardware/software/embedded systems and the vehicle engineering in itself), there is no comparison. None. You drive one and then sit in pimped Cadillac/Benz and that becomes a joke. I suggest you search for third party sources and hear about Tesla engineering from folks whose clients have been every auto OEM in the world. Maybe that can help you understand a bit more.

 

You don't have to invest. You clearly seem to have a conviction this is know-nothing fad company led by a moron, this might be the best time to short it, heck Elon will lend a hand too in the next few days for short thesis!!

 

1. Value it using traditional methods

Ok, bring it. Value it with your modern method.

 

2. you are tempted to short yet so many butt hurts out here rooting for an end to an excellent design and engineering organization whose full impact is yet to be known.

My point is not that the cars are ugly. I personally like the model 3 look. But I also like the I-Pace in some colors a lot. 

 

3. All your financial stats have been rehashed by WS analysts for years and yet this thing seems to go up.

WS analysts are pumping this to get the fees on the billions of capital raises. Perhaps another one coming with all the recent ridiculous upgrades during a pandemic. It goes up but that doesn't mean anything. The numbers are heavily manipulated. In 99' a lot of trash went up 1000%'s. Later a lot of it went bust.

 

4. Maybe you are influenced by endowment bias. To say there is no comparison on those metrics is a huge overstatement. The Porsche is pretty cool. But whatever the car is great argument is completely irrelevant. Assume I believe you and its the greatest thing since sliced bread. If you keep selling the greatest thing since sliced priced below its true cost; you are still going bust.

 

5. I'm shorting the hell out of it of course. The opportunity of a lifetime.

 

You start the argument calling it a metal bender and now you say the part that proves its not a metal bender is just a great argument but not worthwhile for the discussion now pertaining to the value of the company.

 

I don't need to convince you on what metrics you should use to evaluate this investment because your premise is that this is a giant accounting fraud and Elon is on it and pretty soon this will bust. That is no sensible way to start but I am not going to convince you to think otherwise. In fact, don't even assume in one of your cases -"what if there is no accounting fraud?"  I would encourage you to make it heavy conviction short bet if you haven't already.

 

You are rehashing a bunch of points from 100s of decks available from the shorts of the kind of Spiegel etc. and there is no convincing to be done here that you may be off.

 

The fact that you don't know when a fraud will end, doesn't mean it's not a fraud.

 

 

 

 

 

 

"The fact that you don't know when a fraud will end, doesn't mean it's not a fraud."

 

What do you think it is a fraud?????

 

Why does Tesla have over a billion dollars of receivables that refuse to go down? They have given reasons in the past, including 'the quarter ended on a weekend'. This quarter, when they were not making deliveries anywhere near the amount at the end of the quarter, compared to past quarters, the receivables barely budged. Why?

 

Why does Tesla perennially have less interest income from cash on the balance sheet than treasury rates? Why are they window dressing cash every quarter, to the tune of billions of dollars?

 

Why does Tesla always report deliveries, instead of units sold?

 

Why would anyone ever invest their money with a CEO who committed securities fraud by tweeting out the biggest fake buyout in history?

[Liberty]

We mostly agree about Jobs. He had the mind of an engineer and of course when you have a trillion dollar company he is not going to be assembling phones and doing all the leg work himself. He is going to be using the leverage of others to make great things and contribute to society. Just like Elon is not going be assembling cars on the factory floor now.

 

Buffet on the other hand is a genius financial leech. He sits on a wall waiting for companies to have financial difficulty or be at a good price and the pounces and starts drawing financial blood.

 

So much has been made about Buffet in the media that people are brainwashed. Did buffet start Burlington railroad, Coke, See's candy, Apple computer etc??? Does he manage any of those businesses???

 

Munger and Buffet say they do not like new businesses because they fail and there is no moat.

 

Where do you think a moat comes from??? Some engineer or entrepreneur works really hard to make a new product and service-that is where a moat comes from. Buffet et al wait until it has a problem and them pounce.

 

I have to give Charlie credit here, he even said what they do is a low calling. Higher calling is to be a surgeon, builder(like Steve Jobs, Elon).

 

You don't know what you're talking about.

[jschembs]

We mostly agree about Jobs. He had the mind of an engineer and of course when you have a trillion dollar company he is not going to be assembling phones and doing all the leg work himself. He is going to be using the leverage of others to make great things and contribute to society. Just like Elon is not going be assembling cars on the factory floor now.

 

Buffet on the other hand is a genius financial leech. He sits on a wall waiting for companies to have financial difficulty or be at a good price and the pounces and starts drawing financial blood.

 

So much has been made about Buffet in the media that people are brainwashed. Did buffet start Burlington railroad, Coke, See's candy, Apple computer etc??? Does he manage any of those businesses???

 

Munger and Buffet say they do not like new businesses because they fail and there is no moat.

 

Where do you think a moat comes from??? Some engineer or entrepreneur works really hard to make a new product and service-that is where a moat comes from. Buffet et al wait until it has a problem and them pounce.

 

I have to give Charlie credit here, he even said what they do is a low calling. Higher calling is to be a surgeon, builder(like Steve Jobs, Elon).

 

You don't know what you're talking about.

 

Liberty I admire your patience and tact...

[Haasje]

Why do you think they keep on selling more cars and increasing revenues??? Someone please answer this question.

 

Because they are undercosting them and making up the difference with shareholder money.

 

 

Well TSLAQ used to say the Shanghai site was just going to be a puddle of mud and would never be complete in a year like "fraud Elon" said it would. So it must not exist. They got upset when a guy posted drone footage showing construction of the factory progressing rapidly too...

 

TSLAQ no longer brings up the Shanghai factory too often. Now it's the fact that they don't provide minute by minute cash figures on conference calls that indicates it's all a fraud...

 

The shorts' goalposts move so fast you can't even see them!

 

 

I admit I’m surprised the factory in China went up so fast. That’s unusual. I’m also mystified at the way they got it financed by mortgaging its future and expected it to require higher CapEx. As a long, do you think it is an advantage or a disadvantage they just finished that factory? How many cars do they need to sell out of there to break-even on that operation? Will it distract the CEO further? He now has Space X and Tesla to run and China is a faraway location. That complicates things.

 

“This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).”

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

“Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.”

 

Wake me up when the new paradigm shows up on the bottom line.

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

Hopefully, you are not implying Musk started Tesla. He employs thousands of people and made about a million cars but he also burned $16 billion+ of shareholder money AND $13 billion of debt financing as well as making use of countless buyer financing subsidies. I don’t want to dismiss the above as unimpressive (raising this amount of capital just for Tesla is actually impressive) but I’m questioning the sustainability of the operating business. I worry about that because if the operations are not sustainable raising capital will become increasingly difficult.

 

Wrong again. Software $7000 one time cost. Updates are free, sir you have to go do your research, I cannot educate you all day.

 

You came with the printer/inkjet model (which no longer works for them but that aside) but then you ridicule if it is pointed out Tesla does not operate under that model. Look the model Elon Musk invented is a complete new paradigm. You can't compare it to old-school business models that require sustainable profits.

 

Raise shareholder money --> Sell metal at a loss ---> Sell software to turn a profit

 

Problem is that the latter part isn't working and if it starts working I doubt its good enough to offset the unsustainable shareholder and government subsidies.

 

 

 

 

 

 

Because they are undercosting them and making up the difference with shareholder money.

 

So you think that Tesla was selling 80-$110,000 cars for the last six years because of low price?

 

You think consumer reports rates them as the best in customer satisfaction due to low price?

 

How much money do you think they loose on each model 3?

 

I mean that Tesla sells its vehicles for LESS than the cost of production.

 

There are a lot of people passionate about electric vehicles and the move towards sustainable transportation.

 

Top of my head they probably lost $1k - $2k per car on average in the short term. Longer-term this could go up quite a bit as the fleet ages a bit (on average its very young).

 

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

My question was not how to recognize revenue but which other car company sells software for $7000. Can you please answer that question?

 

Not a lot of people because the industry finds the SAAS business model much better. But Bloomberg charges more per year... Adobe Front / CryEngine (1.2 mil) Etc.

 

Musk even started talking about switching to SAAS on the earnings call when asked. Probably without thinking about it because he thought it could make Tesla look cool or get a SAAS multiple. Forgetting that they are doing this because they get $7k in the bank for selling a promise they then have the cash to try and deliver on. A pay per month model does not work if your product isn't reliable and fantastic. They try to extract the most upfront because  they know customers would churn damn fast.

 

Why do you think it does not work well in China?

 

Cause Elon Musk said so on the earnings call.

 

 

 

Wake me up when the new paradigm shows up on the bottom line.

 

Sure I will set the alarm right now, by that time hopefully I will have made 2 to the 3x times my money.

 

Siri: Please wake up Haasje when the TSLA stock price is at $1500.

 

You can make 2x or 3x your money(or a lot more) in so many other cool companies that have real potential and nothing like this downside.

[Guest jalebijim]

We mostly agree about Jobs. He had the mind of an engineer and of course when you have a trillion dollar company he is not going to be assembling phones and doing all the leg work himself. He is going to be using the leverage of others to make great things and contribute to society. Just like Elon is not going be assembling cars on the factory floor now.

 

Buffet on the other hand is a genius financial leech. He sits on a wall waiting for companies to have financial difficulty or be at a good price and the pounces and starts drawing financial blood.

 

So much has been made about Buffet in the media that people are brainwashed. Did buffet start Burlington railroad, Coke, See's candy, Apple computer etc??? Does he manage any of those businesses???

 

Munger and Buffet say they do not like new businesses because they fail and there is no moat.

 

Where do you think a moat comes from??? Some engineer or entrepreneur works really hard to make a new product and service-that is where a moat comes from. Buffet et al wait until it has a problem and them pounce.

 

I have to give Charlie credit here, he even said what they do is a low calling. Higher calling is to be a surgeon, builder(like Steve Jobs, Elon).

 

You don't know what you're talking about.

 

 

Thank you for the thoughtful analysis of the buffet method.

[Guest jalebijim]

Why do you think they keep on selling more cars and increasing revenues??? Someone please answer this question.

 

Because they are undercosting them and making up the difference with shareholder money.

 

 

Well TSLAQ used to say the Shanghai site was just going to be a puddle of mud and would never be complete in a year like "fraud Elon" said it would. So it must not exist. They got upset when a guy posted drone footage showing construction of the factory progressing rapidly too...

 

TSLAQ no longer brings up the Shanghai factory too often. Now it's the fact that they don't provide minute by minute cash figures on conference calls that indicates it's all a fraud...

 

The shorts' goalposts move so fast you can't even see them!

 

 

I admit I’m surprised the factory in China went up so fast. That’s unusual. I’m also mystified at the way they got it financed by mortgaging its future and expected it to require higher CapEx. As a long, do you think it is an advantage or a disadvantage they just finished that factory? How many cars do they need to sell out of there to break-even on that operation? Will it distract the CEO further? He now has Space X and Tesla to run and China is a faraway location. That complicates things.

 

“This is where you are confused. What auto manufacturer sells software for $7000 whose utility might go up in value over time? You are missing the big picture here, if the software works they might be able to sell the car at a loss in the future and still make money(printer/inkjet model).”

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

“Henry ford was able to beat all others with the model T because he changed the paradigm of manufacturing, this is what Musk is trying to do.”

 

Wake me up when the new paradigm shows up on the bottom line.

 

WOWWWWW The narcissim of humans always surprises me. The guy starts a new company from scratch, employs thousands of people. Makes a product people love and armchair quarterbacks so easily throw rocks at him for making ONLY 500k cars. Yes he was overly optimistic but considering the scale of what he has done, it is a not a big issue.

 

Hopefully, you are not implying Musk started Tesla. He employs thousands of people and made about a million cars but he also burned $16 billion+ of shareholder money AND $13 billion of debt financing as well as making use of countless buyer financing subsidies. I don’t want to dismiss the above as unimpressive (raising this amount of capital just for Tesla is actually impressive) but I’m questioning the sustainability of the operating business. I worry about that because if the operations are not sustainable raising capital will become increasingly difficult.

 

Wrong again. Software $7000 one time cost. Updates are free, sir you have to go do your research, I cannot educate you all day.

 

You came with the printer/inkjet model (which no longer works for them but that aside) but then you ridicule if it is pointed out Tesla does not operate under that model. Look the model Elon Musk invented is a complete new paradigm. You can't compare it to old-school business models that require sustainable profits.

 

Raise shareholder money --> Sell metal at a loss ---> Sell software to turn a profit

 

Problem is that the latter part isn't working and if it starts working I doubt its good enough to offset the unsustainable shareholder and government subsidies.

 

 

 

 

 

 

Because they are undercosting them and making up the difference with shareholder money.

 

So you think that Tesla was selling 80-$110,000 cars for the last six years because of low price?

 

You think consumer reports rates them as the best in customer satisfaction due to low price?

 

How much money do you think they loose on each model 3?

 

I mean that Tesla sells its vehicles for LESS than the cost of production.

 

There are a lot of people passionate about electric vehicles and the move towards sustainable transportation.

 

Top of my head they probably lost $1k - $2k per car on average in the short term. Longer-term this could go up quite a bit as the fleet ages a bit (on average its very young).

 

 

Tesla sells FSD package but only recognizes the revenue in part because they are actually selling a promise of a future working product. I don’t think they are appropriately segregating these customer funds to give them back if FSD never materializes. Musk also said on the second to last earnings call that it doesn’t work well in China and they are not profitable without it. You can tell by the capital they continue to raise.

 

My question was not how to recognize revenue but which other car company sells software for $7000. Can you please answer that question?

 

Not a lot of people because the industry finds the SAAS business model much better. But Bloomberg charges more per year... Adobe Front / CryEngine (1.2 mil) Etc.

 

Musk even started talking about switching to SAAS on the earnings call when asked. Probably without thinking about it because he thought it could make Tesla look cool or get a SAAS multiple. Forgetting that they are doing this because they get $7k in the bank for selling a promise they then have the cash to try and deliver on. A pay per month model does not work if your product isn't reliable and fantastic. They try to extract the most upfront because  they know customers would churn damn fast.

 

 

 

 

 

Wake me up when the new paradigm shows up on the bottom line.

 

Sure I will set the alarm right now, by that time hopefully I will have made 2 to the 3x times my money.

 

Siri: Please wake up Haasje when the TSLA stock price is at $1500.

 

You can make 2x or 3x your money(or a lot more) in so many other cool companies that have real potential and nothing like this downside.

 

 

 

 

 

 

 

Top of my head they probably lost $1k - $2k per car on average in the short term. Longer-term this could go up quite a bit as the fleet ages a bit (on average its very young).

 

So you think they loose more money on each 3 than model S/X because it's a lower priced car?

 

They are losing $3-4000 on each model 3 and 1000 on each model S/x?

 

 

Why do you think FSD does not work well in China? Cause Elon Musk said so on the earnings call.

 

Not what Elon said, why do you think it does not work in china?

 

 

 

 

A pay per month model does not work if your product isn't reliable and fantastic. They try to extract the most upfront because  they know customers would churn damn fast.

 

So they will never go to a pay per month Saas model if it does not work. Then people will recognize the scam really easily?

[Liberty]

Thank you for the thoughtful analysis of the buffet method.

 

I'm thoughtful enough to have realized not to waste more time with you.

 

You're like a guy who's obsessed with whales, and he thinks they're the best animals ever, and so he talks about how all other animals suck because they're so small and can't even go under water and sing songs that cary for hundreds of miles and such. Very childish and over-simplistic view of things.

[Guest jalebijim]

Thank you for the thoughtful analysis of the buffet method.

 

I'm thoughtful enough to have realized not to waste more time with you.

 

You're like a guy who's obsessed with whales, and he thinks they're the best animals ever, and so he talks about how all other animals suck because they're so small and can't even go under water and sing songs that cary for hundreds of miles and such. Very childish and over-simplistic view of things.

 

 

 

 

Fair enough, let's agree to disagree.

 

And maybe you're the guy who has blindly been worshiping a money changer and has never logically stress tested your own beliefs. I used to admire buffet but it was purely based on tv appearances and the performance of Berkshire stock. So I read his biographies, every single annual report and watched the last 20 Berkshire recorded annual meetings. After all of this I came to the conclusion that he has photographic memory, great insights into human psychology, and he was nothing but a brilliant genius money changer.

 

I try to work hard against my own biases and delusions. It is not easy.

 

Another example, I have liked Tesla cars for the last five years. My wife even bought a little stock two years ago, I thought it was a bad idea. Looking back now, it was a classic Peter Lynch five bagger. All my friends and acquaintances were buying teslas and loved them.  I still cannot explained why I did not dig into the numbers and analyze the stock fundamentals.

 

Have a good day!

[Guest jalebijim]

TESLA APPLIES TO BECOME UK ENERGY PROVIDER RAISING HOPES ITS GIANT BATTERIES COULD HELP POWER THE COUNTRY

 

 

https://www.independent.co.uk/life-style/gadgets-and-tech/news/tesla-uk-energy-provider-application-gas-electric-elon-musk-a9497581.html