Anyone else worried the stock might rebound early tomorrow before you get in

[blakegallagher]

I guess it would be a good problem to have but after reading through the shareholder letter and listening to the conferance call I see a lot of really positive news. Profitable for q1 is huge!. I was also very glad I heard Texas Supercharger and within months so near to each other . I have about half my position that I am planning on buying on the dip .... I glanced over the forbes article and it seemed very positive... i really need to get after hour trading enabled on my account .... then this would be a non issue

 

[Citizen-T]

Relax, you'll be fine. Don't get swept up in anything. Wait and see what happens, if you like the price, buy. Don't fret over a few percentage points.

 

[blakegallagher]

Thanks that is sound advice. The last time I got this excited about TSLA I bought stock at the top of a peak right after deliveries started and right before it took a big plunge lol .... would of liked to pick some up after hours but I will work on adding that to my trading account and keep my cool ... excited to pick some up after taking profits near 39.

 

[smorgasbord]

BTW, if you're short, there's plenty to like as well:
1) Larger loss in Q4.
2) Did not even make the reduced 2500 minimum delivered cars promise for Q4.
2) High reservation cancelation rates in Q4, continuing into Q1 at least. And from shorters POV, probably steady-state.
3) Expenses high. Tooling costs may drop, but completely offset by selling, marketing, and servicing costs, not to mention SuperCharger costs.
4) 4500 cars don't bring in the revenue Tesla says they'll bring in
5) EV credits become worthless
6) With $202 million cash (subtracting short-term cash for DoE loan), of which $140 million is reservation deposits, and high accounts payable (jumping from $88 million at end of 2011 to $343 million), Tesla can't afford to stop making cars. A glitch may kill them.


BTW - if you've got others, let's hear them!

 

[bonnie]

Thanks for keeping it real, smorgasbord (but I'm still hopefully picking up more tomorrow).

 

[Robert.Boston]

BTW, if you're short, there's plenty to like as well:

BTW - if you've got others, let's hear them!

7) Stockholders' equity fell by $100 million, down to $124 million. Does that support a $4bn market value?
8) Model X development costs, including the cost of dies and other manufacturing tooling, were markedly absent from the discussion. Is Model X development on track?

 

[hvb]

BTW, if you're short, there's plenty to like as well:
1) Larger loss in Q4.
2) Did not even make the reduced 2500 minimum delivered cars promise for Q4.
2) High reservation cancelation rates in Q4, continuing into Q1 at least. And from shorters POV, probably steady-state.
3) Expenses high. Tooling costs may drop, but completely offset by selling, marketing, and servicing costs, not to mention SuperCharger costs.
4) 4500 cars don't bring in the revenue Tesla says they'll bring in
5) EV credits become worthless
6) With $202 million cash (subtracting short-term cash for DoE loan), of which $140 million is reservation deposits, and high accounts payable (jumping from $88 million at end of 2011 to $343 million), Tesla can't afford to stop making cars. A glitch may kill them.


BTW - if you've got others, let's hear them!

Can you clarify #5? Why would the EV credits become worthless?

 

[Robert.Boston]

Can you clarify #5? Why would the EV credits become worthless?

I didn't hear that, either; what was said is that the 25% margin estimate does not include potential earnings from sale of alternative compliance credits to other car manufacturers. I did notice that Deepak declined to give an answer on the Q4 revenues from sales of credits; my guess is that they got a very good price and (a) didn't want to flag the price for the market and (b) don't expect to get that much in the future. But I don't see "zero" as a likely value.

 

[smorgasbord]

Can you clarify #5? Why would the EV credits become worthless?

The law of supply and demand. It wasn't directly discussed in the call - all they said was that it is "unpredictable." But, what's happening is that Nissan has more than enough credits from the Leaf, GM probably has enough from the Volt, Toyota will have enough from the Rav4-EV. Ford might be OK, too. Honda has bought some from Tesla in the past, and one other company has as well. But, how many other companies need the credits, and Nissan at least will have some excess as well. So, it becomes a buyer's market and the price will drop.

Remember, this is all through the lens of a Tesla Short, who is pretty myopic.

 

[CapitalistOppressor]

The law of supply and demand. It wasn't directly discussed in the call - all they said was that it is "unpredictable." But, what's happening is that Nissan has more than enough credits from the Leaf, GM probably has enough from the Volt, Toyota will have enough from the Rav4-EV. Ford might be OK, too. Honda has bought some from Tesla in the past, and one other company has as well. But, how many other companies need the credits, and Nissan at least will have some excess as well. So, it becomes a buyer's market and the price will drop.

Remember, this is all through the lens of a Tesla Short, who is pretty myopic.

True, but the number of credits required is going to ramp up because right now automakers are able to spread the credits across state lines. So selling an EV in California is satisfying most of the requirement in the other mandate states also. That ramps down, and in 2017 the full quota kicks in. Outside of Nissan and GM it's not clear at all that the other automakers will have products that will sell with enough volume to satisfy the requirements.

In the past the automakers have managed to make California back down from these requirements by pointing to the continued lack of a market, and most manufacturers seem to have developed "compliance cars" that don't seem intended to generate enough sales to satisfy the future requirements. It looks to me an awful lot like most will again not be in a position to meet the quota.

But where California has always backed down in the past, I suspect that if Tesla becomes viable, it might well generate enough credits by itself to keep the ZEV credit market viable, and if so California will tell the automakers to get stuffed.

Will California's Zero-Emissions Mandate Alter the Car Landscape?

It anticipates that battery-charging and hydrogen-fueling infrastructures will be installed in some states, such as California, long before making it to others, such as Vermont and Maine. So the plan initially permits automakers to "travel" credit for cars sold in California in a proportional basis to the other ZEV states.

The net result will be fewer ZEVs than the absolute numbers would seem to dictate in the first few years of the plan. But automakers still will have to sell some ZEVs in each state until the travel policy for battery-electric vehicles expires in 2017. After that, all the requirements will have to be met in each of the states.

 

[blakegallagher]

I didn't hear that, either; what was said is that the 25% margin estimate does not include potential earnings from sale of alternative compliance credits to other car manufacturers. I did notice that Deepak declined to give an answer on the Q4 revenues from sales of credits; my guess is that they got a very good price and (a) didn't want to flag the price for the market and (b) don't expect to get that much in the future. But I don't see "zero" as a likely value.

I agree ... in the earnings call what was mentioned is ... as their margins improve on the model S the credits will be a much smaller percentage of profit. I dont think zero is a likely value with them being such a large profit in q4/q1.

 

[Robert.Boston]

It just occurred to me that I, technically, bought my car in California. I wonder if Tesla was able to sell the credits associated with it, even though the car was transported to Massachusetts after the sale?

 

[Zzzz...]

6) With $202 million cash (subtracting short-term cash for DoE loan), of which $140 million is reservation deposits, and high accounts payable (jumping from $88 million at end of 2011 to $343 million), Tesla can't afford to stop making cars. A glitch may kill them.

Reservation deposits while mostly could be used as a working capital are NOT listed as cash and equivalents assets. Indeed those $139 millions in deposits are listed in liabilities.
And they only could be converted from liabilities to assets when customer finalized order and made deposit non refundable.

 

[NigelM]

Reservation deposits while mostly could be used as a working capital are NOT listed as cash and equivalents assets. Indeed those $139 millions in deposits are listed in liabilities.

Sorry, thats not correct. Cash is shown as a balance sheet asset, even when it comes as a deposit. True, the deposits are listed a liability; that's the basic principle of double entry bookkeeping. The deposits can only be recognized as revenue once the deposits become non-refundable; I think that's where you were getting mixed up.

 

[Zzzz...]

Sorry, thats not correct. Cash is shown as a balance sheet asset, even when it comes as a deposit. True, the deposits are listed a liability; that's the basic principle of double entry bookkeeping. The deposits can only be recognized as revenue once the deposits become non-refundable; I think that's where you were getting mixed up.

Hmm.... Yes, you are correct NigelM.

My bad, sorry:redface: And thanx for correcting my misconception:smile: