Apparently, Apple hires people to line up at their stores during launch events to help with cheerleading and create more of a buzz. Apple also hires people to do this at their conferences and demos as well, so technically this type of advertising CAN be bought. :wink:
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Apparently, Apple hires people to line up at their stores during launch events to help with cheerleading and create more of a buzz. Apple also hires people to do this at their conferences and demos as well, so technically this type of advertising CAN be bought. :wink:
dreamingof3
Member
I cannot stand that Tesla isn't allowed to sell direct in all states. We can thank our politicians who caved to the large cash handouts from NADA.
With over 6 million shares traded in under 2 hrs, some shorts had to have covered. And it's not an all or nothing case. Only those shorts who are underwater would feel the need to cover, since the 2016 guidance should effectively kibosh any thoughts of TSLA needing a capital raise, there's no reason for the stock to go much lower other than macro economics. And if you haven't noticed, the general market is ugly this morning.
So any shorts who are still in the money will wait to see how low the rest of the market goes before feeling the need to cover ... because of a surprise announcement or March 31st, when they see evidence that whatever low price target they have won't happen. But until March 31st, it'll be macros.
hockeythug
Active Member
The only people paid to stand in line are people that are paid by scalpers. The people that clap at their keynotes are employees.
On the chip question, I am in the industry and I highly doubt it is their plan to bring in chip design and I hope they do not. The chip they really want, one that could handle say vision systems and drive multiple screens etc would cost 30-60M to design, and require a huge team. The industry is already providing this investment for free, all TM has to do is buy them. Just a quick and dirty example, for a say 200k runrate, these high end chips may cost $80, ($40 to manufacture) so that is 8M of costs they could avoid. It would take years to break even and that assumes everything goes perfectly and they then disband the team. Its a big, capital intensive, risky business outside their expertise. An easy make-or-buy decision. Bring in seat parts, but bringing in chips is a big mistake. Apple could do this because they have money to burn and the incremental control of the design is worth it to them.
tinm
2020 Model S LR+ Owner
Actually that gives me an even BETTER idea. Instead of writing letters to the editor, how about getting all New Mexicans interested in ordering a Model 3 to form a huge crowd and surround the New Mexico Automotive Dealers Association headquarters. I'm sure the media would love to cover that.
Some of us have already, er, checked it out ...
dreamingof3
Member
I'm sorry I'm just frustrated with the group of shorts that want Tesla to die. Not sure if you are familiar with the group but their mindset is Tesla is going to zero so they won't cover til then. That is the basis behind my comments.
CyberDutchie
Active Member
jhm
Well-Known Member
Yes, we don't want shorts to take a profit at this point. They can stay in the casino as long as they're sitting on unrealized gains.
The "core operational cash flow" meme is a perfect double dog whistle. It sends one tone to bulls, reinforcing that cash flow is in the process of turning positive. But for bears, it sends a different pitch. It gives them an object to ridicule so as to reinforce mistrust of management and the view that management is just trying to obscure root problems with the company. So bulls and bears will hear exactly what fits their preconceived notions. This locks shorts in place, while bull buy back shares out from beneath them. Musk is a master at playing shorts against their own intellectual proclivities.
So core operating cash flow may be an intentional trap. Shorts should feel perfectly validated in confirmation of their suspicions. The more firmly they see that Tesla is just a scam, the longer they will hold out for an even bigger payout.
The "core operational cash flow" meme is a perfect double dog whistle. It sends one tone to bulls, reinforcing that cash flow is in the process of turning positive. But for bears, it sends a different pitch. It gives them an object to ridicule so as to reinforce mistrust of management and the view that management is just trying to obscure root problems with the company. So bulls and bears will hear exactly what fits their preconceived notions. This locks shorts in place, while bull buy back shares out from beneath them. Musk is a master at playing shorts against their own intellectual proclivities.
So core operating cash flow may be an intentional trap. Shorts should feel perfectly validated in confirmation of their suspicions. The more firmly they see that Tesla is just a scam, the longer they will hold out for an even bigger payout.
hockeythug
Active Member
dreamingof3
Member
OMG love it! So in Ohio to get a grasp of the stupidity going on here....Tesla has 3 stores that are now "grandfathered in"...meaning Ohio revoked the right for Tesla to sell direct with "new stores" but old stores can remain open. STOOOOOOOOOOOPIIIIDActually that gives me an even BETTER idea. Instead of writing letters to the editor, how about getting all New Mexicans interested in ordering a Model 3 to form a huge crowd and surround the New Mexico Automotive Dealers Association headquarters. I'm sure the media would love to cover that.
Some of us have already, er, checked it out ...
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ev-enthusiast
Active Member
+1000
Building own chips would only inrease expenses and risk.
While I do like Tesla Motors developing and producing as much of their proprietary core tech (EV drivetrain) in house, I see some other in house manufacturing like seats and others as a possible distraction. AP tech might be debateble. What I would really like to see them concentrate on their proprietary core tech that no one else can provide. Keep developing this in secret without giving your secrets away to the suppliers / competition.
ElectricBoogaloo
Member
Meh - they tried sourcing outside on early MS models and it caused nothing but headaches so they brought it in-house. I can see the value in doing it all yourself - gives you more control over the timeline and reduction of bottlenecks.
ElectricBoogaloo
Member
I'm real excited today. Just bought my first 10 shares of Tesla, (first shares ever actually.) I've got my swim trunks on and my surfboard in hand; I'm ready to ride this wave!
ev-enthusiast
Active Member
jesselivenomore
Member
Outside of perhaps daytraders, real long term shorts are not covering based on this ER. If anything, they will be emboldened - the actual numbers were much worse than expected, all the good news was guidance, which Tesla has failed to meet 2 years in a row. Talk of cash flow positive was sketchy, since they are using new metrics to measure this that may not represent real free cash flow. Bulls will view this as new accounting measurements used by a new CFO that better represent the state of the business, bears will view it as financial engineering at best and deliberate deception at worst.
So no, if you had a bear thesis for the past 2 years, there is nothing in this ER to make you cover. However, the guidance was also good enough to give bulls ammo as well. And whether or not it is FCF or some made up cash flow, the bottom line is that they stated they will not need to raise outside capital for 2016 - which was the major fear in this current environment.
At the end of the day the question is do you believe in Tesla's words or not? Do you believe they won't need to raise capital this year? Do you believe they will deliver 80-90k?
Well, if you are a Tesla long it is because you believe in Tesla, and if you are a Tesla short you never believed them in the first place. So nothing in the ER changes any of that.
As for the bottom, to me, it depends on how price action closes this week. We need to close above 160 on Friday to confirm a reversal on the weekly charts. Otherwise, expect some back and forth. Guidance was good enough to give bulls some guns for the fight, so instead of the one way ticket to hell the past two weeks, now there should be a battle. Like I said last night, what got me back long is that IMO worst case <120, <100 is off the table. Not that we have necessarily hit bottom.
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They don't, but they moved quite a bit of it in-house - specifically things like the seats that you specifically mentioned. The sun visors, if I recall, were also moved in-house.
Fair point. It comes down to beliefs and conviction. While earnings figures didn't look rosy, I think it's very important to understand why. I'm hoping that most people get it-- all that happened was they front loaded their expenses and investments in 2015 (arguably a better macro environment) to ensure a smoother 2016. I prefer this approach. It showed that management is still long term oriented. For example, they didn't need to make sure that the paint shop could do a 10,000 week capacity... but they did it anyway so they didn't have to slow down in the future when making even more cars. They revamped their inventory management system so there's less waste-- great this makes so much sense while they have fewer parts to manage rather than later when there is infinitely more.
I also liked the fact that the X ramp was not slowed because of Tesla in particular, but because of third party suppliers. We saw this issue with Model S. For some reason this chrome trim thing is always a PITA. It happened with Model S when the big window trim pieces weren't as durable or getting bent. IMO ditch the chrome and go flat black plastic-- most owners are doing it anyway and the car looks more sporty, but then again I'm not a "luxury" car buyer.
stealthology
Member
Thanks for the insight Jesse. Could you go expand upon this? In the Q4 Shareholder letter, they used the Cash Flow from Core Operations (the first chart) to show they were +, which is just one aspect of free cash flow. However, in the letter they said they plan to be "net cash flow positive" in 2016. I'm pretty sure in the call they re-iterated this, too. They plan to have more in the bank at the end of this year vs. the start, and it begins next month.
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