This is just the start, will take a while. It is being propped up by a massive up day in the markets.

TSLA's beta's R-squared sucks. "Propped up/depressed by the market" is, by default, a weak explanation for what's happening to TSLA.

TSLA will continue to maximize units subject to the constraint of achieving roughly 25% gross margin. This is already a compromise from when they just tried to basically break even and push as many units as possible.

With the order book they got, and other untapped demand, they can almost certainly keep growing and keep at least 20% gross margin (25% I still think is a stretch though I don't think impossible) while growing rapidly for at least another 2 years before demand can plausibly become a constraint.

Reuters with an uncharacteristically bearish take on TSLA:
https://graphics.reuters.com/TESLA-P...1S7/index.html

proto, I generally agree with you that TSLA fund raising is likely to happen soon. But that's not necessarily bearish -- it depends entirely on the terms of the raise. If they manage to sell debt for less than 8%, or do a large private placement at a discount below 20%, I think this rips higher.

Nobody is lending to them under 8%, and if they try to sell equity the buyers will lock in the free money by shorting or synthetically shorting right away.

I agree the fundraise will not kill the stock, the (relatively) awful Q4 will. And if they don't/can't raise, the Jan and March 2019 payments will.

Unsecured 20 year TSLA bonds are trading at like 8.3%. They can get under 8% easily with convertible bonds.

At what conversion price? Nothing reasonable. The benchmark 2025 bonds are trading at 7.8% - they are not going to get buyers below that, they would just buy the 2025s. So it will be 8%+ or just crushing to the equity via conversion.

Anyway, elon "says" no raise anyway, so that's gotta be the truth.

They can set conversion price at 500+ in 1 year and still get the yield well under 8%.

I don't even know what benchmark bond you're referencing.

If Musk doesn't want to raise, he probably won't have to. But if he wants to keep growing, he will raise and the money will be available.

How did they increase diluted shares so much when basic and diluted were same last Q


Also, equity doesnt roll, it moves 600m vs 300m of income

I mean they materially touched equity

Thats weird

That isnt fraud or anything but something is happening, warrants as part of re org agreement?

Is Elon on drugs tonight?

Wonder if this is his way of saying that it's all over.

You think it will be hard for Tesla to obtain another billion or 2 in credit line? They probably don't even need that much for another year.

a firm that has a market cap of 54 billion dollars can't raise a billion bucks? You people are totally insane.

They have almost 3 billion in cash and their current liabilities increased roughly in line with revenue/COGS increase.

There is no indication they are having trouble coming up with the money to pay their bills right now. They may be incompetent and pissing suppliers off with whatever they are doing, but the money is there.

I love the conspiracy theories that include "CEO is crazy" as the explanation.

yeah, it's not like he just paid a 40m fine and got removed from his chairman position over a tweet or anything like that.
that would be insane, thank god it didn't happen.

ceo is stable, absolutely no risk there.

It does but you are double counting. Changes in cash conversion cycle and float trickle out to different places on the balance sheet which in turn reflect on CF statement.

The reality is they sold a ton of cars at astronomically increased margin, while cutting opex.


The rest is just gibberish business talk that, while true, is not the driving force here, or really even relevant.

I have a thesis now and i think it fits.


Summary:

In dont think this is fraud. Going through the BS there is nothing too out of the ordinary (altho i def think those 6b in lease assets are likely impaired) so there isnt anywhere to hide stuff outside of just leaving stuff off completely, but that is unlikely because its prison time fraud.


So on things like building leases and what not, you have to straightine the expense to prevent gaming on backloading the expense, but services dont work like that its as incurred.


If we go back the focus of q2 was 1) contractors/barnacles and 2) vendors/suppliers



Given there is no way they were getting massive contract changes they may have been able to achieve some sort of temporary relief on service pricing which would be recognized as incurred (ie all in q3). There is even an elon tweet about how any reductions would be in q3. What if the goal was simply to focus all savings on q3.


This lines up with the severly depressed opex (doesnt totally explain margin but i think high end tent built M3s do) and also guidance of increased opex in q4 when we know it is likely they deliver less cars unless they sell tons of MR which will crush the margin story.


Someone poke holes in this.

Now those are some balls! But if your net worth is less than $5M this is a desperately oversized bet.

Incredible rally even with mega bearish market lol. If had to guess 330-340 could be the top here before 300 retest?? If takes out 360 i'm expecting new highs would be sickening for shorts.

Market getting smoked is probably bullish for tesla in the short run. Long short funds being forced to reduce exposure and retail yards forced to cover etc

I'm among the tards who thought long various stocks and short tesla would be low beta. Really getting smoked last few days. 360+ wouldn't shock me at this point especially if market keeps taking and we get a good squeeze

It's a marathon, not a sprint guys. The bear thesis will play out over the next 6 months.

This is possible very slightly on the margins but for the most part, really just no. **** like that are very strictly regulated and especially since whistleblower programs were put into place (whistleblower gets part of the settlement), big companies with competent lawyers and accountants just don't **** with numbers like that by entering obvious quid-pro-quo arrangements.

TSLA, short of having committed outright jailable accounting fraud, has proven beyond a reasonable doubt that it is capable of generating 300+ million of FCF per quarter for the next few years if it wanted to shift into cash cow mode.

That's not even close to justifying its enterprise value but it's more than enough to raise enough capital to finance inventory and capital expansion.

Who was the dickhead who said the DOJ was nothing? Will you please stand up?

Criminal investigation reported by WSJ now bulls are crying foul


Never a dull moment


Funny comment


"Imagine releasing fraudulent accounting numbers to get out in front of the criminal investigation news you know is dropping. Balls of ****ing steel"