TSLA corporate outlook

cwerdna said:

...Along these lines, https://www.autoblog.com/2018/03/14/tesla-loses-2-senior-executives-model-3/ and others report that

Bloomberg reports that Susan Repo, Tesla's corporate treasurer and vice president of finance, has left the company to become chief financial officer at another company. Her departure comes on the heels of the exit of Chief Accounting Officer Eric Branderiz, who left "for personal reasons," Tesla said in a March 7 SEC filing.

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Tesla Is Facing a Crucible

...A string of executives have headed for the exits, including a surprising number from the company’s finance team, as Tesla is dogged by questions about whether it can meet its production targets.

... Eric Branderiz, Tesla’s chief accounting officer, departed last week. And Bloomberg reported this week that Susan Repo, the corporate treasurer and vice president of finance, is out.

The press has rightly been focused on trying to figure out how badly Tesla will miss its production targets for the all-important Model 3 electric sedan. After all, actually building cars is pretty important to Tesla’s business...

On Thursday, the Wall Street Journal declared it “Tesla’s Make-Or-Break Moment.” That article rightly points out that Tesla had $3.4 billion of cash at the end of 2017 and that last year it burned $1 billion a quarter. Do the math, and Tesla either needs to generate more revenue or raise more money soon.

The Journal’s story observes that Tesla has a so-called Z-Score (a measure of a company’s financial security) of 1.26. “Any company with a score below 1.8 is considered distressed by many investors. A score of 1.0 or lower suggests bankruptcy is likely within two years,”...

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]RegGuheert said:

Here is a decent video with some details on Tesla's financial situation:

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lorenfb said:

]RegGuheert said:

Here is a decent video with some details on Tesla's financial situation:

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It's an over simplistic analysis! The video fails to consider three key factors:

1. That the competitive EV marketplace remains the same, i.e. no direct competitive vehicles.
2. That the capital markets will indefinitely fund Tesla as a money losing company and at an increasing level.
3. That Tesla can reliably manufacture vehicles at the level of the reservations booked.
4. That past performance/events can be extrapolated into the future.
5. That Tesla's key element of its ecosystem, i.e. the SCs, will be marginalized by numerous public/privatized charging systems.

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Tesla bonds join Tesla stocks in the doldrums

Tesla Inc. bonds have joined the company’s shares in the doldrums recently, as the Silicon Valley car maker gets closer to reporting quarterly sales and production.

The 5.300% notes, which mature in 2025, were trading at 92.53 cents on the dollar on Friday to yield 6.592%, according to trading platform MarketAxess. On a spread basis, they were 19 basis points wider on the week, and 376 basis points above comparable Treasurys...

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It Pays to Be Loved by Tesla. Ask Elon Musk.

What's a thoughtful gift for a billionaire aficionado of rocket ships and sports cars and flamethrowers? More money.

What does Elon Musk's utility function look like? Yesterday Tesla Inc. shareholders approved a comically large pay package designed to keep Musk employed as Tesla's chief executive officer. When we last talked about this pay package I mentioned how superfluous it seems to be. If Musk hits all of his revenue and earnings targets over the next 10 years, and grows Tesla to be worth $650 billion, then he could make more than $50 billion from his new package. But if Musk grows Tesla to be worth $650 billion over the next 10 years -- whether or not he hits those revenue and earnings targets -- then he will make more than $130 billion just from the Tesla shares he already owns. The extra $50 billion on top of the $130 billion would be nice, I guess, but ... how?...

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Tesla’s $2.6 billion payday for Elon Musk gets another ‘no’

A second proxy adviser has come out against Tesla Inc.’s plan to award Chief Executive Elon Musk an estimated $2.6 billion in long-term compensation, calling it “unprecedented” and dilutive to shareholders.

Institutional Shareholder Services Inc., one of the two largest independent services meant to advise investors on crucial shareholder votes, said that the plan would be worth $260 million a year for Musk, leading to “massive costs” over the years for Tesla TSLA, -2.03% .

“Even when annualized, Musk’s pay opportunity would dwarf that of nearly every CEO at the largest and most profitable public companies. This raises even more questions given that Musk does not devote his full-time attention to Tesla, and serves as the CEO of multiple other high-profile companies,” ISS said.

Competitor proxy adviser Glass Lewis came out against the proposal on Monday, also calling it too costly and too dilutive...

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LTLFTcomposite said:

lorenfb said:

]RegGuheert said:

Here is a decent video with some details on Tesla's financial situation:

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It's an over simplistic analysis! The video fails to consider three key factors:

1. That the competitive EV marketplace remains the same, i.e. no direct competitive vehicles.
2. That the capital markets will indefinitely fund Tesla as a money losing company and at an increasing level.
3. That Tesla can reliably manufacture vehicles at the level of the reservations booked.
4. That past performance/events can be extrapolated into the future.
5. That Tesla's key element of its ecosystem, i.e. the SCs, will be marginalized by numerous public/privatized charging systems.

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That's five things. If #2 is true they can never go bankrupt.

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For Tesla, Cars + Cash + Credit + Convertibles = Crunch Time

Without faster Model 3 production, Elon Musk's money machine will run low on juice.

Opinions differ on the exact nature of Tesla, ranging from struggling car manufacturer to tech pioneer to something akin to the second coming. Regardless, it is undoubtedly one thing: a money machine.

I don't mean that in the sense of Tesla making a lot of money; more that it is a machine for the raising and consumption of money...

Which is why these four charts deserve more than a glance from even the most ardent Muskovite...

Tesla's money machine will almost certainly need to raise more this year due to the Model 3's problems -- but those same problems undermine the pitch for selling more equity or debt...

Cranking up the money machine depends on cranking up that production line. And given Tesla's mounting burdens, that needs to happen soon.

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cwerdna said:

Elon Musk directs Tesla to 'slow down' on Norway deliveries this quarter, citing local capacity issues
https://www.cnbc.com/2018/03/24/elon-musk-directs-tesla-to-slow-down-on-deliveries-this-quarter-citing-local-capacity-issues.html

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LTLFTcomposite said:

In related news, Musk shuns Facebook.

https://www.cnbc.com/2018/03/23/elon-musk-tweets-he-will-delete-tesla-and-spacex-facebook-accounts.html

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I have been bullish on Tesla for a long time, have been long its stock for most of the time throughout the last five years, and I continue to think that Tesla will be worth significantly more five years from now. But in the short term, there are some clear concerns that could cause some volatility to transpire in Tesla's shares.

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Tesla (TSLA) is an extraordinarily innovative company that has achieved amazing results in several sectors in a relatively short time frame. Let's face it, if it weren't for Tesla, EVs would still be limited to the likes of the Leaf and the Prius. The company also has achieved some remarkable feats in power generation and energy storage. Tesla is a company that looks to the future and shows us that things could be done smarter, more efficiently, and better than the current status quo can offer. But despite Tesla's drive to continuously move forward and push the envelope on what's possible, the company remains plagued by numerous problems.

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Unfortunately, so far, the production process has proven to be anything but highly efficient and profitable. And the longer Tesla continues to struggle with various "bottlenecks," automation issues, and other problems associated with the Model 3 assembly, it will continue to burn through cash at an alarming pace. What's Tesla's gross margin on the Model 3 right now? Once again, the exact number remains a mystery, but judging by the company's recent performance and estimates, gross margin on the Model 3 is close to zero, low single digits, or possibly even negative in a worst-case scenario.

When will Model 3 production improve to where the company is producing a profit, or is at least close to producing a profit on the vehicle? This too remains a mystery, but it must happen relatively soon if Tesla is to remain a viable business enterprise. My optimistic view is that the company will have most of the Model 3 issues figured out by the end of this year and will have a Model 3 gross margin close to 20% by early 2019.

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Unless Elon Musk “pulls a rabbit out of his hat,” Tesla will be bankrupt within four months, says John Thompson of Vilas Capital Management.

“Companies eventually have to make a profit, and I don’t ever see that happening here,” he told MarketWatch. “This is one of the worst income statements I’ve ever seen and between the story and the financials, the financials will win out in this case.”

Thompson manages $25 million and his Tesla TSLA, -4.07% short is the fund’s biggest position...

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LTLFTcomposite said:

300 looks like a support level getting tested

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cwerdna said:

LTLFTcomposite said:

300 looks like a support level getting tested

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Indeed. Stock's at around $290 now.

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cwerdna said:

Indeed. Stock's at around $290 now.

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