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Re: TSLA corporate outlook

Posted: Thu Apr 05, 2018 10:24 am
by edatoakrun
The theory that the dumb money tends to flow toward equities, currently being put to the test by TSLA:

A major disconnect between Tesla shares and bonds is signaling problems for the stock, says market watcher

...Following Tesla's tanking junk bond late last week, one macro strategist is pointing to the detachment between the company's stock price and bond performance as a warning sign...

There is a clear disconnect between Tesla's sizable $45 billion market cap and the company's bonds, yielding around 7 percent after Moody's downgraded the credit rating late last week.

Even as the stock has seen a bit of a rebound since hitting a year-to-date low of $244.59 per share earlier this week, its debt has not made the same rebound; this is a serious disconnect, and it's likely that the stock is "wrong" and the bonds are "correct."

The central concern for the market is Tesla's immense cash burn; Tesla last quarter reported negative free cash flow of $276.7 million, and negative $1.4 billion the previous quarter... ... blems.html

Re: TSLA corporate outlook

Posted: Thu Apr 05, 2018 11:27 am
by LTLFTcomposite
I thought the bonds were convertible.

Re: TSLA corporate outlook

Posted: Fri Apr 13, 2018 4:36 pm
by electromotive ... ework.html

Tesla ships flawed parts from suppliers to a local machine shop for fixes, and they're piled up outside
Tesla is fighting to reduce the amount of rework it has to do to produce its electric vehicles.
The EV maker sends flawed and damaged parts from suppliers to outside shops for rework and tweaks the design of some parts after receiving them.
CEO Elon Musk promised profitability in Q3 and Q4 of 2018 on Friday, but defective parts and design changes could cut into Tesla's margins.

Re: TSLA corporate outlook

Posted: Fri Apr 13, 2018 9:30 pm
by Nubo
"Elon Musk's brash promise: T esla will soon make money" ... index.html

Re: TSLA corporate outlook

Posted: Mon Apr 16, 2018 9:18 am
by lorenfb
The emperor has no clothes!

Musk has built his empire on the basis of visionary leadership. His backers in the investment community, the media, and general public flock to his message of a bright future, a future in which Tesla will play a pivotal role. But now he has admitted that he was wrong, that perhaps the automakers he condemned as incompetent and inefficient actually knew what they were doing after all. That makes Musk look foolish and tarnishes his reputation as modern capitalism’s disruptor-in-chief. Tesla’s share price is buoyed by belief in a future that Musk has sold with immense skill. If his image is tarnished – or even smudged – it will have serious ramifications for Tesla’s share price.

With the promise of massive margin expansion via efficient and comparatively inexpensive automation burnt up on the social media pyre, investors would be right to expect Tesla’s projections about the Model 3’s profitability to come down. Realizing that the Model 3 production is going to be more akin to traditional auto manufacturing after all, the hopes of profitability any time soon should go out the window. Musk’s statement of a couple days ago that “Tesla will be profitable & cash flow+ in Q3 & Q4” ought to seem perplexing even to his devoted fans.

But the evidence has also been gradually building to suggest that Musk lacks many of the core competencies critical to the effective management of an auto manufacturing operation. That was rendered painfully apparent during the February earnings call during an exchange between Musk, Jeffrey Straubel (also of Tesla), and Brian Johnson of Barclays. Johnson asked Musk to explain the differences between how Tesla was managing its factory versus how other established automakers, such as Toyota (TM), which has developed the Toyota Production System into the envy of the industry.

The exchange with Barclays’ Johnson is quite shocking, highlighting as it does Musk’s apparent ignorance of, or obliviousness toward, the Toyota Production System. Evidently, his distaste for the old guard automakers is so great that he cares nothing for methods that have been tested and refined over decades of actual production. It also stands as further evidence that the supposed great competitive advantage Tesla has to offer – and that would supposedly deliver industry-defying profit margins – came through automation. That advantage has been, with a single tweet, consigned to the dustbin of broken promises and unrealized forecasts. ... ter-widget

Re: TSLA corporate outlook

Posted: Wed Apr 18, 2018 10:47 am
by edatoakrun
A series of increasingly concerning and even bizzare news reports RE TSLA operations, below, ~most recent first:

MS has recently suggested one explanation for why TSLA has never had a clear path to profitability, in that the corporate mission may be in achieving a government bailout, rather than an actual return on investor capital:

Tesla could be 'too big to fail' like GM, Chrysler were during crisis, Morgan Stanley says

Morgan Stanley believes the size of Tesla's U.S. workforce may become a big factor affecting the company's long-term survival.

The firm's analyst Adam Jonas noted Tesla employed 37,543 workers at the end of last year and predicted the number will increase to nearly 50,000 by 2019 or 2020.

"Tesla may be more on the 'too big to fail' spectrum than the market realizes ... the vast majority of [the company's workforce is] in the United States, and across many states," he wrote in a note to clients Wednesday. "Rule of thumb on the economic multiplier says that one auto-related job can support as many as seven other jobs throughout the economy."

The U.S. government bailed out GM and Chrysler during the financial crisis, in part because of their large employee bases... ... story.html

Sure sounds like adding another shift is just another half-baked plan from Elon, as well as an admission that reaching the previously promised 5,000 per week model 3 production rate using two shifts is now recognized to have been only a pipe dream:

Tesla Switching To 24/7 Shifts To Push For 6,000 Model 3s Per Week By June, Elon Musk Says

...In a lengthy email sent around 12:30 p.m. Pacific on Tuesday, Musk laid out a number of changes that covered production of the Model 3 to expenditures over the coming year, as Tesla attempts to achieve sustained profitability by the end of 2018. Musk confirmed earlier reports that production Fremont and the Gigafactory in Nevada will be suspended for a few days for a “comprehensive set of upgrades,” he said.

“This should set us up for Model 3 production of 3000 to 4000 per week next month,” Musk wrote.

Then, in May, the automaker will do more work on the Model 3 line that, according to Musk, should allow it to hit a production capacity of 6,000 Model 3s per week by the end of June. Tesla has struggled with production of the Model 3 since it launched last summer, repeatedly delaying production goals.

One of the biggest changes will be an additional shift to Fremont’s general assembly, body and paint areas. As such, Fremont will move to 24/7 operations, Musk said...

...The longer hours of operations comes amid reports of alleged labor violations from workers and the National Labor Relations Board, which has a hearing scheduled over a complaint it filed against Tesla for June...

You can read the full email below... ... 1825335216

What TSLA didn't need was further charges of cooking-the-books to hide failures, this time RE workplace safety statistics:

Tesla Says Its Factory Is Safer, but It Left Injuries Off the Books

...Under fire for mounting injuries, Tesla recently touted a sharp drop in its injury rate for 2017, which it says came down to meet the auto industry average of about 6.2 injuries per 100 workers.

But things are not always as they seem at Tesla. An investigation by Reveal from The Center for Investigative Reporting found that Tesla has failed to report some of its serious injuries on legally mandated reports, making the company’s injury numbers look better than they actually are... ... -the-books

Not news any TSLA investor would want to read, almost a year into model 3 mass-production:

Tesla ships flawed parts from suppliers to a local machine shop for fixes, and they're piled up outside

...Tesla is struggling to manage and fix a significant volume of flawed or damaged parts from its suppliers, sending some to local machine shops for rework, according to several current and former Tesla engineers. The company said it also makes adjustments to the design of some parts after receiving them from suppliers.

On Friday, Tesla CEO Elon Musk promised the company would be profitable and cash-flow positive in the third and fourth quarter of this year. But a high volume of rework and design tweaks could cut into Tesla's margins and contribute to delays in the delivery of its cars... ... r=sharebar

Re: TSLA corporate outlook

Posted: Wed Apr 18, 2018 12:16 pm
by palmermd
edatoakrun wrote:
Not news any TSLA investor would want to read, almost a year into model 3 mass-production:

And yet, we've all read it and the stock is UP 2% today.

Thanks for sharing all the negative posts, I do read them, but so far, I just cant get excited about any of it like you do. Perhaps one day you'll post something that gets my attention. Until they get production issues smoothed out, I'll be reading every article to be sure my investment is safe.

Re: TSLA corporate outlook

Posted: Fri Apr 20, 2018 3:20 pm
by EatsShootsandLeafs
lorenfb wrote:The exchange with Barclays’ Johnson is quite shocking

It is certainly entertaining in that it is 100% devoid of any meaning whatsoever. Look at this jumble of words:

Elon Musk

The most fundamental difference is thinking about the factory really as a product, as a quite vertically integrated product.

Jeffrey Straubel

It's treating it as more of an engineering and a technical problem as well.

Brian Johnson

Right, which is the Toyota Production System.

Elon Musk

Yeah. We don't think so.

Jeffrey Straubel

I think that generally it's more of an optimized operational problem, being extremely lean and really managing the flows of materials and the supply chain. They're great at it, but this is I think a different approach, looking at it really from a deep technical lens in terms of automation, robotics, process.
So in other words lean manufacturing is what Tesla will do to compete with Toyota, even though Toyota has been doing that since the last century (in fact, every automaker is). Every automaker has also been using robots since the last century. Toyota has never thought about putting in better automation via robotics, or tweaking their process? Is Ford building cars the same way they did the Model T?

This whole "factory is a product" "alien dreadnought" thing makes no sense. It's simple BS.

Re: TSLA corporate outlook

Posted: Sat Apr 21, 2018 2:15 pm
by GRA
Whatever the reality of Teslas's plant safety, I do agree with the author that Tesla's official responses to criticism are sounding increasingly like a certain easily irritated U.S. President - Engadget via ABG:
Tesla: Workplace safety, unions and the color yellow
Someone’s been too busy playing with flamethrowers

Re: TSLA corporate outlook

Posted: Sat Apr 21, 2018 5:33 pm
by LTLFTcomposite
If they're going to rely more on human labor than planned they're going to be further hurt by manufacturing in a place with such high cost of living. They would be better off with the factory in, say, South Carolina, like other automakers.