Tesla/Lithium stocks discussion

_Tombstone_ · 28-05-2016 8:01pm

Which battery storage technology will dominate for the next few years?

http://renewableelectron.com/question/is-lithium-ion-going-to-be-the-dominant-energy-storage-technology-for-the-next-few-years/

Sabre Man · 07-06-2016 3:16pm

Billionaire Ron Baron bets on Tesla being one of the world's biggest companies

http://www.cnbc.com/2016/06/07/billionaire-ron-baron-bets-on-tesla-being-one-of-the-worlds-biggest-companies.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=103695024

Francie Barrett · 07-06-2016 8:29pm

Francie Barrett · 21-06-2016 10:56pm

Tesla offering to buy Solar City - ridiculous!

lucky john · 21-06-2016 11:31pm

I very much doubt Tesla can afford Solar City. I understand the reasoning as its in keeping with Musks long term ambitions. However not many Tesla share holders have the same vision. To fund the deal tesla would need a huge fund raising resulting in serious dilution for stock owners. The result would offer feck all benefit or extra share holder value even in the medium term. Musk owns around 20% of tesla so I'd be amazed if he gets this deal over the line. They have about 1.6 billion in cash (just raised) to up M3 production. Spending a cent of that on solar city would be unjustifiable, even for Musk.

The bigger issue could be the damage a strange financial idea like this will do to the faith many have in Musk.

Francie Barrett · 22-06-2016 12:06am

lucky john wrote: »

I very much doubt Tesla can afford Solar City. I understand the reasoning as its in keeping with Musks long term ambitions. However not many Tesla share holders have the same vision. To fund the deal tesla would need a huge fund raising resulting in serious dilution for stock owners. The result would offer feck all benefit or extra share holder value even in the medium term. Musk owns around 20% of tesla so I'd be amazed if he gets this deal over the line. They have about 1.6 billion in cash (just raised) to up M3 production. Spending a cent of that on solar city would be unjustifiable, even for Musk.

The bigger issue could be the damage a strange financial idea like this will do to the faith many have in Musk.

First of all, it's only an offer, it might not even go through. Secondly, Tesla are offering stock, not cash.

My thoughts. We all know SolarCity is in serious trouble, but things must be even worse than we suspect for Musk to use Tesla to bail them out. Remember, SpaceX, SolarCity and Tesla are all interconnected in various ways, either directly or indirectly. If one was to fall, then it's likely that Musk's house of cards would take all the other companies down with it. There is a serious conflict of interest here.

Still short via puts, Tesla shareholders are going to get roasted tomorrow.

Sabre Man · 22-06-2016 9:47am

A terrible idea in my opinion, at least in the short to medium term.

lucky john · 22-06-2016 1:25pm

Musk's Vision
"Instead of figures on a balance sheet, the Solarcity merger represents a continuation of a dream that began when he was just a sophomore at the University of Pennsylvania. There, when one of his professors asked the class to come up with a business proposal, Musk submitted a paper titled “The Importance of Being Solar”. In the essay, Musk wrote in detail how solar cells worked, then goes on to predict a rise in solar power, concluding with a futuristic design of an orbital power station, beaming solar energy down to earth. In other words, when it comes to Elon Musk, Tesla, SpaceX, Hyperloop, OpenAI and now SolarCity should not be considered in isolation,but as tesserae from a mosaic representing a grander vision. And as long as the sun continues to rise, you can bet that Musk will continue towards this vision; the market will just have to make peace with that."

Can one man achieve such a dream in one life time? Doubtful ( I won't say impossible because of the strides Musk has made in that direction already). However as a share holder in Tesla I fear he is jumping the gun on solar city by 5 or even 10 years. When Tesla is debt free with a couple of billion a year of free cashflow then it might, might.. be worth buying a solar energy producer. Now is just not the time.

Nody · 22-06-2016 1:57pm

lucky john wrote: »

Can one man achieve such a dream in one life time? Doubtful ( I won't say impossible because of the strides Musk has made in that direction already). However as a share holder in Tesla I fear he is jumping the gun on solar city by 5 or even 10 years. When Tesla is debt free with a couple of billion a year of free cashflow then it might, might.. be worth buying a solar energy producer. Now is just not the time.

So never; Tesla is not going to make money in the future, they are not making money now and no matter how much they ramp up will not change the basic fact they fail to make money because their model is not working. It's great way to drive a vision and get other's to invest money but making a profit? Nope, sorry not happening and volume is not the driver here (plenty of car manufacturers are green at the volumes Tesla been producing).

zpehtsfd · 22-06-2016 2:21pm

Small chance this deal closes but either way Tesla stock will be under pressure due to Musks financial interests in Solarcity. The move today just highlights how precarious the solar business is.

Sabre Man · 22-06-2016 3:39pm

Nody wrote: »

no matter how much they ramp up will not change the basic fact they fail to make money because their model is not working

Would you mind elaborating this point?

Nody · 22-06-2016 4:13pm

Sabre Man wrote: »

Would you mind elaborating this point?

Without going over old ground this table is based on their own information:

GAAP loss cars sold GAAP loss per car
1Q 2016 $282,267,000 14810 $19,059
4Q 2015 $320,397,000 17478 $18,331
3Q 2015 $229,858,000 11603 $19,810
2Q 2015 $184,227,000 11532 $15,975
1Q 2015 $154,181,000 10045 $15,349
4Q 2014 $107,629,000 9834 $10,945

They sell more cars and they keep on making higher losses and model 3 would need the margin of a Porsche just to break even over a decade on the investments alone.

There's also a great article here on Seeking Alpha (require free membership to read) comparing how Jaguar was doing at similar volumes to Tesla. The author is short on Tesla (i.e. open bias) but the numbers are still the same either way (Jaguar made a profit at the same volumes Tesla is losing over 15k USD per car) at their highest ever margin (as they are currently the only long distance electrical car producer and as GM, Toyota etc. start producing the margin will drop rapidly).

In short Tesla is a pet project to get others to produce electrical cars and it's working great for that; as a shareholder however you're funding Musks vision without the profit from it. Note I'm not a shareholder nor shorting the stock.

Sabre Man · 22-06-2016 4:36pm

That's misleading according to this Motley Fool article:

http://www.fool.com/investing/general/2016/03/27/how-tesla-motors-could-be-profitable-if-it-wanted.aspx

Francie Barrett · 22-06-2016 4:45pm

Sabre Man wrote: »

You're looking at it the wrong way. It doesn't say anything about loss per car. Tesla isn't losing money on cars sold, but is simply spending money building the company for future growth.

http://www.marketwatch.com/story/if-you-value-tesla-per-car-sold-youre-an-idiot-2016-05-05?siteid=yhoof2

I don't own any TSLA shares at the moment.

Francie Barrett wrote: »

Sorry, you are wrong on this. Even before capex for the next round of growth is considered, Tesla lost money in 2015. Check the cash flow statement for 2015 if you don't believe me.

https://www.sec.gov/Archives/edgar/data/1318605/000156459016013195/tsla-10k_20151231.htm

Sabre Man wrote: »

That's misleading according to this Motley Fool article:

http://www.fool.com/investing/general/2016/03/27/how-tesla-motors-could-be-profitable-if-it-wanted.aspx

Sabre Man - we had this exact same discussion last month! The financials clearly show that Tesla is losing money even before they consider capex for the next generation of Model 3's.

Nody · 22-06-2016 4:59pm

Sabre Man wrote: »

That's misleading according to this Motley Fool article:

http://www.fool.com/investing/general/2016/03/27/how-tesla-motors-could-be-profitable-if-it-wanted.aspx

The article compares them to GM and Ford to conclude they could be profitable as a supercar maker... How about if they would compare them to an actual company producing similar volumes such as oh Ferrari or Jaguar? Or account for their margin shrinking for every year that goes by? But even taking his theoretical profit of $250MM (it would be far less) it would still put a P/E on the company at 109 compared to Ferrari at 21 (and that's comparing a unprofitable company with a very profitable one)...

Also by the end of this year will have burned through ~3 billion dollars and in Q1 2017 will be going to the market to ask for more money again (at the latest) to be able to actually buy materials etc. to finish their factory to make the model 3 (assuming by a miracle they manage to get ready for it). That's assuming they don't buy SolarCity as that would add easily another billion+ required in capital requirements this year alone (fun fact SolarCity sold part of it's portfolio at $3 per Watt while production cost is $3.18 per Watt as of Q1).

In short the stock has no connection to reality and is a a great tool for Musk to lure in investors with dreams of future profits which will never materialize.

_Tombstone_ · 12-07-2016 4:31am

Looks like third car has crashed with auto-pilot engaged (these people are seriously dopey relying on that, its beta (baby) software and I'd question what it's doing in the car at all looking at some of the near miss vids online)

Auto-pilot!!!!! They wish. In 15 years maybe!

http://m.slashdot.org/story/313573

Look at this crash from someone just using the "summon" feature (they wish!) It drove straight into a trailer. If it can't even manage that at 3mph whats it doing out on motorway.

http://www.roadandtrack.com/new-cars/car-technology/news/a29133/tesla-self-driving-crash-summon-autonomous/

And possibly worst of all, a possible cover up by offering to repair just out of warranty cars - with pretty shocking suspension failures - if the owner says nothing more about it.

http://dailykanban.com/2016/06/tesla-suspension-breakage-not-crime-coverup/

http://www.autonews.com/article/20160609/OEM11/160609815/nhtsa-warns-tesla-over-non-disclosure-pacts?X-IgnoreUserAgent=1&X-IgnoreUserAgent=1

yeyeye · 14-07-2016 9:26pm

I saw today on a CNBC ad that one of self-driving Model S's crashed and the owner died well he was hit by a trailer. They did say in the ad that they're would be over 10 million self-driving cars by 2020 which is complete BS. I like Elon personally, but I think he and his team are looking too far into the future and need to focus on the problems they have now such as their high costs,bringing a cheaper model to the market and mass production. I would never buy a share of Tesla I think it is way too over valued and the risk is too high

_Tombstone_ · 05-09-2016 2:17am

lithium batteries - keep blowing up.

Someones gonna have to come up with an alternative soon.

Thargor · 05-09-2016 4:10pm

No they dont, they're an incredibly safe and stable technology. There are billions upon billions of them in use in the world and one causing a fire is enough to make headlines.

_Tombstone_ · 05-09-2016 6:31pm

Thargor wrote: »

No they dont, they're an incredibly safe and stable technology. There are billions upon billions of them in use in the world and one causing a fire is enough to make headlines.

Genie, its more than one, tesla's catching fires, airlines refusing to carry them, mass hoverboard recalls, multiple big brand phone maker recalls and on it goes.

Dangerous tech.

Thargor · 05-09-2016 9:08pm

Are you trolling or just completely ignorant? I just came home after passing through several airports carrying 5 lithium ion batteries including a big power bank, nobody cares. Teslas are the safest cars ever built. There are more phones than people in the world, how often do any need to be recalled?

lucky john · 26-10-2016 10:01pm

So...a profit for Q3. Smashing all expectations. Shorts are in for a bit of a scorching.

Nody · 27-10-2016 7:05am

lucky john wrote: »

So...a profit for Q3. Smashing all expectations. Shorts are in for a bit of a scorching.

Eh they were expected to make a profit; however the only reason they made a profit (ZEV credit sales) is basically a once off exercise that gave them 138.5 million USD vs. their profit of 22 million for comparison. Q4 there are no ZEV credits to sell anymore so where's the profit going to come from?

Secondly the free cash flow improvement; Tesla stated beginning of the year they would invest over 2.3 billion USD into the factory and new super charge locations in 2016 (it was one of the major drivers behind last year's cash injection after all) which has been cut drastically (less than half the actual super charger locations implemented etc.). Secondly they achieved a further cash flow improvement by not paying bills; yes you read that right they build up an additional 628 million USD in short term liabilities in Q3 (that's an accounting way of saying we have bills to pay that we've not paid yet). It's easy to claim improved cash flow if you don't pay your bills; if the bills had been paid they would still be in negative cash flow and of course those bills are not going away; look at the upcoming Q4 statement on cash flow to see the impact.

And finally and probably the most damning part is the thing not said; model 3 reservations. Remember how Musk was happy to continually tweet out the new numbers of reservations; yea; that silence on it is interesting...

Francie Barrett · 27-10-2016 8:32am

Nody wrote: »

Eh they were expected to make a profit; however the only reason they made a profit (ZEV credit sales) is basically a once off exercise that gave them 138.5 million USD vs. their profit of 22 million for comparison. Q4 there are no ZEV credits to sell anymore so where's the profit going to come from?

Secondly the free cash flow improvement; Tesla stated beginning of the year they would invest over 2.3 billion USD into the factory and new super charge locations in 2016 (it was one of the major drivers behind last year's cash injection after all) which has been cut drastically (less than half the actual super charger locations implemented etc.). Secondly they achieved a further cash flow improvement by not paying bills; yes you read that right they build up an additional 628 million USD in short term liabilities in Q3 (that's an accounting way of saying we have bills to pay that we've not paid yet). It's easy to claim improved cash flow if you don't pay your bills; if the bills had been paid they would still be in negative cash flow and of course those bills are not going away; look at the upcoming Q4 statement on cash flow to see the impact.

And finally and probably the most damning part is the thing not said; model 3 reservations. Remember how Musk was happy to continually tweet out the new numbers of reservations; yea; that silence on it is interesting...

It must have been one of the worst engineered earnings beats I've ever seen. Last year they guided $2.25bn in capex spending for the new gigafactory and the model 3 roll-out. The actual spending has been $760mn. It's clear that the capex has been delayed to temporarily juice the numbers and ensure that Musk can raise more money while the stock price is high. If you ask me, Tesla should be investigated by the SEC for such egregious accounting practices.

lucky john · 27-10-2016 8:54am

"Eh they were expected to make a profit;"

Nody wrote: »

So never; Tesla is not going to make money in the future, they are not making money now and no matter how much they ramp up will not change the basic fact they fail to make money because their model is not working. It's great way to drive a vision and get other's to invest money but making a profit? Nope, sorry not happening and volume is not the driver here (plenty of car manufacturers are green at the volumes Tesla been producing).

Not by you obviously;)

They have stopped tweeting reservations of Modle 3 because they have been so hugely successful that orders today will not be delivered until late 2018. Going by the accounts it is reckoned that pre orders are close to 500,000. A staggering amount considering a 2 year wait for a product not even in production yet.

Nody · 27-10-2016 9:16am

lucky john wrote: »

"Eh they were expected to make a profit;"

Not by you obviously;)

No, and I still stand by that but the listed expectation by the analysts was a profit for this quarter (driven by accounting tricks). Doing accounting tricks to show a profit does not make a profitable company; all they shown is they can do an accounting trick to show a quarter profit before the next fund raising period. If they had done proper accounting of assigning those credits in each quarter when they sold the respective car they would have made a significant loss this quarter as well. The fact is they are selling cars at a loss; nothing has changed that nor the fact they have great liabilities that they refuse to disclose (for example the fact that the billion investment by Panasonic in the factory is actually 100% covered by Tesla and a Tesla liability).

They have stopped tweeting reservations of Modle 3 because they have been so hugely successful that orders today will not be delivered until late 2018. Going by the accounts it is reckoned that pre orders are close to 500,000. A staggering amount considering a 2 year wait for a product not even in production yet.

Really, 500k? So you're over 100k reserved beyond the number actually stated by Tesla themselves back in May this year and you think Musk would not mention this? The man who've shown to consistently exaggerate every claim to date?

lucky john · 27-10-2016 11:20am

Nody wrote: »

Really, 500k? So you're over 100k reserved beyond the number actually stated by Tesla themselves back in May this year and you think Musk would not mention this? The man who've shown to consistently exaggerate every claim to date?

You seem to be a numbers man so start with $690mil cash in deposits on account and work from there. S and X have a $25,000 deposit. So the less you allow against M3 deposits the better the higher priced cars sales pipeline looks. I'm happy either way.

https://electrek.co/2016/08/05/tesla-model-3-reservations-400000-cash-flow-customer-deposits/

Here's a bit from 3 months ago on deposits. Cash from deposits is even higher since then so while Musk might not be shouting about them orders continue to tic up.

zpehtsfd · 27-10-2016 1:17pm

Francie Barrett wrote: »

It's clear that the capex has been delayed to temporarily juice the numbers and ensure that Musk can raise more money while the stock price is high.

Right now it's all about the Solar City deal. Musk knows that without a positive vote from Tesla shareholders the house of cards will come tumbling down. He has put his money and more importantly his integrity on the line with this deal. Fascinated to see how the vote turns out. GL

yoppy · 05-01-2017 1:18am

Gigafactory up and running

https://www.bloomberg.com/news/articles/2017-01-04/tesla-flips-the-switch-on-the-gigafactory

lucky john · 25-01-2017 1:57pm

On a real roll these days. Could easily break $260 this week. Everything Musk touches turned to gold all of a sudden. Trump winning could have been a disaster for him but instead he has turned it in to a big win. The risk though is that you would have to fear how the relationship will be seen by Tesla fans. Their demographic would make them 100% anti everything Trump stand for.

For investors though its all good so far. There has to be a good chance $280 will be back on the cards soon.

zpehtsfd · 13-02-2017 5:42pm

Just hit $280.

The overall market is overheated but i ain't standing in front of this train yet. Scary time to be short anything.

arkrow · 18-02-2017 11:02pm

Elon Musk Is Really Boring

A tunnel boring company, that is.

Whose in?

http://www.popularmechanics.com/technology/infrastructure/a25257/elon-musk-boring-company/

TimeToShine · 25-02-2017 5:16pm

Sold all of it at $270. Huge return on investment but I acknowledge that there was a large element of fluke. Won't be going near Tesla for the foreseeable future after that!

Sabre Man · 12-03-2017 2:59pm

Tesla stock is 'fairly valued' right now, but near-term challenges remain, says Bernstein analyst
http://www.cnbc.com/2017/03/09/tesla-stock-is-fairly-valued-right-now-but-near-term-challenges-remain-says-bernstein-analyst.html

lucky john · 30-03-2017 11:54pm

Musk has made history tonight with SpaceX and shown again that nothing is impossible if the right minds are put to it.
Tesla doubters beware.

el diablo · 31-03-2017 8:26pm

lucky john wrote: »

Musk has made history tonight with SpaceX and shown again that nothing is impossible if the right minds are put to it.
Tesla doubters beware.

It sure does help when you receive unlimited government funding and loans.

Sabre Man · 03-04-2017 1:22pm

Tesla delivered a record number of cars in Q1
http://www.cnbc.com/2017/04/02/tesla-delivers-a-record-25000-vehicles-in-the-first-quarter.html

Nody · 03-04-2017 2:52pm

Sabre Man wrote: »

Tesla delivered a record number of cars in Q1
http://www.cnbc.com/2017/04/02/tesla-delivers-a-record-25000-vehicles-in-the-first-quarter.html

But had the capacity to deliver over 29.000 cars (2.400 cars a week in Q4) and a lot of the push are temporary effect from dropping the free lifetime charging at stations after January and UK dropped the Plug-In Car grant; all which helped push sales in Q1 but nothing to do with sustaining the sales. But of course there's another way to look at it which are the financials for Q1...

Operating Margin -9.86
Pretax Margin -10.66
Net Margin -9.64
Return on Assets -4.39
Return on Equity -23.11
Return on Total Capital -7.78
Return on Invested Capital -8.70
Income Per Employee -37,955.00

Sounds financially sound to me!

Thargor · 03-04-2017 7:31pm

All time highs, up about 40% since I sold out...

Francie Barrett · 03-04-2017 10:22pm

He must be pretty vindictive to troll the shorters.

Elon Musk‏Verified account @elonmusk 5h5 hours ago
Stormy weather in Shortville ...

lucky john · 03-04-2017 10:49pm

Francie Barrett wrote: »

He must be pretty vindictive to troll the shorters.

I imagine a lot of the buying in the second half of trading today was from
desperate shorters trying to cover positions. over 20% of shares were on short loan so there was some serious burning done today. Can't all be covered yet. Probably a few brave guys hoping for profit taking tomorrow to drop the price a bit.

There are still a lot of investors out there that have not realized yet that Tesla CAN NOT be valued as a normal company. Musk is a cult. Tesla is a cult. For some time yet this company (and share price) will defy gravity. As I have said before, bet against it at your pearl.

Prezatch · 04-04-2017 3:24pm

Now more valuable than Ford..

https://uk.finance.yahoo.com/news/tesla-now-more-valuable-ford-202120995.html

Francie Barrett · 04-04-2017 9:29pm

Prezatch wrote: »

Now more valuable than Ford..

https://uk.finance.yahoo.com/news/tesla-now-more-valuable-ford-202120995.html

and now more valuable than GM.

BMW next.

el diablo · 05-04-2017 4:34am

Prezatch wrote: »

Now more valuable than Ford..

https://uk.finance.yahoo.com/news/tesla-now-more-valuable-ford-202120995.html

Totally ridiculous. Ford sold 2.6 million cars last year. Meanwhile Tesla sold just 76,000 cars. Ford had earnings of $4.6 billion. Tesla lost $700 million.

These Musk/Tesla/Space X fanboys make me laugh. :pac:

lucky john · 05-04-2017 2:18pm

el diablo wrote: »

Totally ridiculous. Ford sold 2.6 million cars last year. Meanwhile Tesla sold just 76,000 cars. Ford had earnings of $4.6 billion. Tesla lost $700 million.

These Musk/Tesla/Space X fanboys make me laugh. :pac:

Ford...Q1/17 car sales -7%
Tesla Q1/17 car sales +70%

1 year share price ford -10.6%
Tsla +20.9%

Makes me laugh too..all the way to the bank :pac:

Sabre Man · 05-04-2017 4:42pm

Why $300 Might Actually Make Sense
http://blogs.barrons.com/stockstowatchtoday/2017/04/05/tesla-why-300-might-actually-make-sense/?mod=yahoobarrons&ru=yahoo&yptr=yahoo

zpehtsfd · 05-04-2017 7:19pm

lucky john wrote: »

Ford...Q1/17 car sales -7%
Tesla Q1/17 car sales +70%

1 year share price ford -10.6%
Tsla +20.9%

Makes me laugh too..all the way to the bank :pac:

So you're actually trying to justify a M/C > Ford (with a P/E of 9) and GM (with a P/E of 6)? That's just ridiculous. imo

Your making bank has less to do with fundamentals and more to do with the fact that the US is currently in a massive bull market (driven by cheap $$ and buybacks) and shorts are being forced to cover due to the high borrow rate on the stock. It's happening to lots of other stocks. This is a market anomaly and similar to the credit crisis of 2008 except in that case everything crashed to ridiculous levels. Gloat all you want but eventually the market will revert to the mean and high flyers like Tesla will be valued based on reasonable metrics.

Here's an unbiased article that goes into great detail about the valuation of Tesla:

http://aswathdamodaran.blogspot.ie/2016/07/tesla-story-meets-numbers-promise-meets.html

Francie Barrett · 06-04-2017 10:58am

zpehtsfd wrote: »

Here's an unbiased article that goes into great detail about the valuation of Tesla:

http://aswathdamodaran.blogspot.ie/2016/07/tesla-story-meets-numbers-promise-meets.html

That guy loves his models and DCF's. I mean, it's fair enough, he's making a stab at trying to value Tesla, but I think he is trying to do so off totally incomplete information. By using complete guesses at margins, revenue growth and capital requirements and extrapolating into the future, he only needs very small changes in an early assumption to wreck the model. You can see that his early estimates were broken after 1 year. If the model fails so hopelessly at such an early point, there is no hope at estimating what the future will look like in 10 years.

By the way, he's the same guy who also has a stake in Valeant, a company that has went down massively since he originally went long - http://aswathdamodaran.blogspot.co.uk/2017/03/a-valeant-update-damaged-goods-or.html

zpehtsfd · 06-04-2017 1:13pm

Francie Barrett wrote: »

That guy loves his models and DCF's. I mean, it's fair enough, he's making a stab at trying to value Tesla, but I think he is trying to do so off totally incomplete information. By using complete guesses at margins, revenue growth and capital requirements and extrapolating into the future, he only needs very small changes in an early assumption to wreck the model. You can see that his early estimates were broken after 1 year. If the model fails so hopelessly at such an early point, there is no hope at estimating what the future will look like in 10 years.

By the way, he's the same guy who also has a stake in Valeant, a company that has went down massively since he originally went long - http://aswathdamodaran.blogspot.co.uk/2017/03/a-valeant-update-damaged-goods-or.html

Of course it's all guesstimates at this stage. No one knows what lies ahead for Tesla but you have to start somewhere. Given the amount of variables that are involved all future valuation models should be taken with a grain of salt. The reason i thought the article was interesting was because it was unbiased and the metrics he was using were somewhat realistic as opposed to the hyperbolic nonsense like here: http://fortune.com/2016/06/08/tesla-ron-baron/

I'm not sure what him having a stake in Valeant has to do with anything as he doesn't have a stake in Tesla. If you're questioning his credibility then that's your prerogative. I've yet to find anyone with a flawless track record in investing. GL

Francie Barrett · 06-04-2017 1:46pm

zpehtsfd wrote: »

Of course it's all guesstimates at this stage. No one knows what lies ahead for Tesla but you have to start somewhere. Given the amount of variables that are involved all future valuation models should be taken with a grain of salt. The reason i thought the article was interesting was because it was unbiased and the metrics he was using were somewhat realistic as opposed to the hyperbolic nonsense like here: http://fortune.com/2016/06/08/tesla-ron-baron/

I'm not sure what him having a stake in Valeant has to do with anything as he doesn't have a stake in Tesla. If you're questioning his credibility then that's your prerogative. I've yet to find anyone with a flawless track record in investing. GL

I am not having a pop at you man. I just think that DCF's and models only work for stable predictable businesses that change very little or not at all. Trying to predict what Tesla will look like in 10 years is a fools errand.

With that said, I am still very bearish on Tesla and still hold OOM puts on it. The latest nonsense that bulls are trying to spin on this is that it's not an auto company anymore, it's a tech company. I even see folks trying to compare it to the likes of Amazon. I know people always had a pop at Amazon because like Tesla, they had pretty poor GAAP earnings in comparison to their valuation for a long time. With that said, they were completely different. For a start, Amazon didn't have to continuously go to the market to raise new money. Other than share dilution due to management options, they raised capital only once at IPO. Secondly, the rubbish Amazon GAAP earnings hid the underlying earnings power of the business. If you look at the figures of Amazon since IPO, operating cash flow has just exploded every single year, with earnings being reinvested back into the business. Self-funding organic growth has let Amazon grow into their valuation for 20 years now.

The situation at Tesla is completely different. For them to grow, new capital needs to be raised because no cash flows is generated within the business. Sure, revenue is growing, shipments are growing, but ultimately the bottom line shows heavy red ink. You look at the last 10 years of Tesla financials, they have sharply negative operating cash flow for all but 1 of those years. At what point does this thing stand on its own two feet and generate an investor return?

Tesla/Lithium stocks discussion

Comments