About 1.1 billion of this is in loans that need to be returned early next year
Around 40% of their cash in hand is from refundable deposits, from people who thought they would get a $35k car
Tesla cannot make $35k Model 3s at a profit(this is generally accepted, and even Tesla hinted at it), they'll probably lose money even making $42k cars. They need to make $50k cars at scale to earn strong profits
When asked in the earning call last for last quarter about reservations and how many people chose to cancel/take up their car once offered, Musk stunningly called the question "boring" and "boneheaded" and went on take questions from a youtuber for 20 mins. This was considered unprecedented and bizarre and stock dove.
Tesla is losing about 800-900 million a quarter, so they will run out of money without a cash infusion. Literally everyone(all major banks/investors/analysts) knows that Tesla will need to raise capital this year.
Musk though, has insisted that Tesla will not need to raise cash because they will be "profitable by Q3 or Q4". A reminder that they lost 780 million in Q1, and even small profits won't be enough to prevent running out of cash. In order to make sustainable profits they need to sell around 10,000 model 3s a week. They were supposed to produce 5000 cars a week in 2017. They have just now been able to produce 2500/week.
Even bulls say that Musk is bluffing and he will eventually raise cash this year. Moody's downgrade of Tesla to essentially junk stocks makes it harder to raise cash at good interest rates. Moreover, there is speculation and some evidence that the reason Tesla haven't already done so, is that they are under SEC investigation which would prevent them from raising cash without disclosing a lot of details harmful to them.
Tesla has access to standard credit lines for about 500 million, but they recently had to pledge their Fremont factory to just maintain these credit lines.
A lot of Tesla's financial executives have left the company - a red flag to many including Jim Chanos, who famously shorted Enron due to similar indicators. The head of autopilot left and the head of engineering left 'for vacation' recently
Tesla's autopilot is complete false advertising. Their original autopilot was developed by MobilEye. MobilEye hated tesla's exaggeration of the system's capabilities and withdrew their supply after a person died using autopilot. Tesla responded that mobileye was jealous of Tesla's superior "Enhanced Autopilot" which has hardware capable of full self driving. It is generally accepted on owner and enthusiast forums that enhanced autopilot is worse than mobileye's system right now(edit: in the last few months some people feel Enhanced AP has surpassed the original one in terms of capabilities, though most agree it is still less relaible), and in general both are basically lane-keeping system with AEB. Waymo and GM/Cruise are far ahead with their FSD capabilities than Tesla(again, widely accepted)
Part of Tesla's debt comes from bailing out Solar City, a completely unprofitable company loaded with debt that was run by Musk's cousins. Some people saw this as nepotistic and a conflict of interest(Musk held part ownership of SolarCity while his cousins ran it), with a few investors suing Tesla over the deal.
Starting from 2019 and 2020, all the major automakers are bringing out electric models. This will further damage Tesla's competitiveness, since they have the wost QA and build quality due to their haphazard and panicked development process and their $7500 tax credit is about to run out.
Despite all this, the market cap of tesla is larger than Ford, Fiat and nearly equal to GM. Their inflated market cap(which even Musk admits is inflated if you "look at past results") is fuelling their funding which inflates the market cap even more as they lose more money trying to make bigger promises
Finally something worthwhile to read on biz. Thank you sir
Ryder Brown
oh wow surprising that an new company couldn't actually beat the existing powerful car and oil companies just with exaggerated hype promises t. short since $350
Joshua Powell
Don't worry. The solution is clearly more subsidies from countries. t. Long since 290
Juan Evans
Grimes BTFO
Joseph Perez
Musk has been counting on the fact that Tesla is now "too big to fail" so they will get eternally rescued no matter what happens in the next 10 years. Scamming more and more money all through his charisma just like he's done his entire life.
The Model S is Amazing. Model 3 looks like cheap as shit though. Problem is the price. If the model S was around 55-65k I would of already ordered. Unfortunately even the 75D starts at 75k W/no home charging included. Just a standard cord you plug in the wall that take 3x as long to charge.
Carson Nguyen
How to profit in this case? Shorting seems risky and if I were to buy puts what expiry should I go for? How long do you think it will take for the stock to get rekt
Connor Green
>Musk names the (((merchant))) >shills in full force Hmmmmm
Hunter Wilson
OP copy pasted this from Reddit, BTW.
Asher Watson
and how do you know?
Anthony Gomez
i've seen this pasta before on reddit; it's compelling but i have to wonder why its being shilled.
also shorting TSLA has not historically been a winning strategy, its hard to borrow, and the puts are really expensive. if you get in too early you'll get margin called before it crashes.
i saw this copypasta on r/wsb also user; it's compelling but i have to wonder why its being shilled.
its a hard play to make, too, since the stock is hard to borrow and the puts are really expensive. there's also the fact that a lot of dumb money is getting poured into this, and if you're right too early you'll get margin called and lose your shirt.
not to mention the possibility of musk pulling another solar city move and using SpaceX money to bail out his car company.
Some of these points are correct except > each model 3 costs 35K to manufacture Recently some German automaker did a model 3 tear down and pegged the cost at 28K after materials and labor. They were also impressed by the design > only 2.5K model 3s per week Old fud, they now produce 3.5K average and have peaked over 5K
Jayden Hill
Ah children one word for you here. delorean
DeLorean also sought lucrative incentives from various government and economic organizations to pay for constructing the company's automobile manufacturing facilities. To gain these, he looked to build his first factory in a country or area where unemployment was particularly high. One candidate was Ireland, although the country's then Minister for Industry and Commerce, Desmond O'Malley, decided not to support the project. A deal in Puerto Rico was about to be agreed when DeLorean took up a last-minute offer from Northern Ireland's Industrial Development Board. Besides taking some early seed capital from Hollywood stars Sammy Davis Jr. and Johnny Carson, DeLorean Motor Company relied on the British government for about $120 million of its $200 million startup costs according to the newspaper The Times. The British government was very keen to create jobs in Northern Ireland to reduce sectarian violence by reducing unemployment. As part of this offer, DeLorean was apparently under the impression that the British government would provide his company with Export Credit financing. This would provide a loan of 80% of the wholesale cost of the vehicles (US$20,000) upon completion and delivery for shipping
Near the end, in a desperate attempt to raise the funds his company needed to survive, John DeLorean was filmed appearing to accept money to take part in drug trafficking, but was subsequently acquitted of charges brought against him on the basis of entrapment.[
Ecclesiastes 1:9 New International Version (NIV)9 What has been will be again, what has been done will be done again; there is nothing new under the sun.
I guess that's what you get for appealing to a demographic that can't afford the stuff you're peddling. Millennials might think it's le epic maymay to send a tesla into space, but that doesn't mean they'll rush out and buy a tesla.
Ayden Price
Can someone explain me the high valuation of Tesla? I know it's speculation for some part but why is it values higher than Ford and Fiat. You see both Ford and Fiat being driven by the masses. A Tesla is still pretty rare. Especially in Europe.
