Tesla desperately needs to raise equity, it's their only option left to survive. What is preventing them from doing so and why can't they overcome the obstacles, as difficult as they may be, if it's absolutely necessary?

Their stock is at such an attractive price to raise $10B in equity with somewhat minimal dilution to then have some runway. Why wouldn't this be Elon's absolute focus?

Here's the thing for me. There's absolutely no reason to lay off 2/3 of the US delivery team if either of the following are true:

1. Tesla has ample cash. If 1000 delivery people were laid off (2/3 of the workforce), at $1000/week that is a million dollars a week. That's 8 million dollars for the next two months if they take a US delivery break before resuming. It's a drop in the ocean if Tesla are permanently profitable.

2. Tesla expect US deliveries to resume. Tesla paid 8 weeks severance pay, and if they need to fill these positions again, recruitment and training costs are generally high. Thus, if they expected to resume even existing 2018 level US deliveries within 2-3 months, it would be a bad financial decision to lay them off.

I cannot see a reason to lay off 2/3 of delivery staff if Tesla expects demand to continue at 2018 levels in the next few months, let alone grow. Can anyone else?

Canaccord Genuity turns bullish on Tesla

Is there an end-point to the bear thesis? I mean, a point at which the whole thing has to unravel?

The end point is a significant capital raise. Without it, tesla is a no-growth barely-profitable car company trading at a ridiculous multiple.

Tesla's domination of the electric vehicle market is "unsustainable" and will soon be disrupted by start-up Rivian, Morgan Stanley says

That's a pump for Rivian more than a negative on Tesla. He's just using the headliner of Tesla to get interest. They might have a Morgan Stanley backed funding round planned.

As I posted above: Analysts had a 75% buy rating on Enron months before it collapsed, and an 80% buy rating on Valeant at $250 before it plunged to $12.

Analysts are worthless human beings out to make money for their firm...and sell ratings/honesty don't make money, especially for firms that bring in IPO and funding business from these companies.

Who knows, this stock is hilarious. Up 3% in a flat market on this “upgrade”, despite news from over the weekend that they gutted their NA delivery team and the reservation list has been completely exhausted. Oh and T Rowe halved their stake in the 4Q.

ARK Invest also reduced their stake by 44%:

https://fintel.io/soh/us/tsla/ark-investment-management

More and more it seems like tsla is destined to become an aapl product; their new iphone. When not if...

Yea I saw that a few days ago; Cathy Wood was scurrying from camera to camera telling anyone who would listen TSLA was worth 4000.00 while simultaneously selling half her stake.

lol.

Lol at quoting a no name analyst then questioning the bear case, great thought process there

He's obviously trolling.

Greg doesn't troll against Tesla

he's trolling both sides at once. Masterful.

Don't get distracted by the noise. I think this sums it up nicely:

Never thought I'd agree with a senor and proton post back-to-back.

What?

I've got no dog in this, but I enjoy reading the back and forth between the bull and bear cases. ... It doesn't seem crazy to me to ask, "is there a point where the bear case vanishes?"

If a decade from now Tesla is still pumping out cars but the bears are still expecting a collapse or funding raise at any time, at what point do you say that's wrong?

Looking back at this thread, what would the answer to a similar question have been, a few years ago?

Just asking questions, man.

The core bear case is that Tesla is no longer a growth company, having slashed capex and is squeezing pennies to stay alive and make debt payments - using bordeline accounting fraud to turn a small profit.

There is no end date on this...except the date when they can raise billions of fresh cash to invest in building new models. The S, X, and soon to be 3 are tired and they desperately need cash to invest in the new models. Any reasonable bear will throw in the towel after a major fundraise. (but expect the price to be lower as an equity-based funding round will be priced at least 25% below current market price).

Without a fundraise, how long will the stock trade at a crazy growth multiple? 2 quarters? 2 years? nobody knows. But it's still a great short, even with the cult of elon.

Musk is building a 2 billion dollar factory in Shanghai and local Chinese banks are fighting to give him the money. By all appearances he has the blessing of the CCP and in that country it means he’s getting the money for the plant.

Perhaps you missed the last conference call, the 2 billion dollar factory is now down to 500 million. And it's still a mud lot with no financing in place, just lol at full production there this year.

To cap it all off, China M3 orders (as the website counted them sequentially at first) are only in the hundreds. China isn't going to save tesla.

If they could get $2-3bill from China that would certainly help, but it seems tesla isn't asking for that much or more likely just can't get it.

Right, the Chinese SEC is stopping them from raising!

If I was a betting man I'd bet on Musk getting billions in China with strict rules on the money staying in the country such that he can't funnel it to his other failing companies. The Chinese are dumb enough/image conscious enough to pay white actors to turn up to business meetings for credibility, they love the big Western names for cred but they're also not dumb enough to let a huckster do anything but invest their money in China. Which is pretty much worthless for Musk apart from the PR pump abilities given that there's no demand in China and they'll go belly up on profitable demand disappearing in the US and Europe long before the first Kukbot is installed in that mud field.

Has Musk ever addressed the one passenger market?

This is a pretty decent summary of the hard evidence on US demand. In short, Tesla M3 demand is dead in the US at any price level >$43K, the current lowest price.



Meanwhile, there are 20K total lifetime M3 orders in Europe (up from 14K at the start of January) and close to none in China. And the above delivery times aren't just inventory, they're the same for highly configured models that are custom built.

Big money will have their eye on these numbers. You can't fake delivery times and you can't fake shipping to Europe or China. So we have hard objective numbers about demand and they look awful.

When profitable M3 demand is dead, then what? Does Tesla start making cars at a big loss per car again? That worked fine when they were selling 500 to 1000 cars per week and could secondary and mortgage and suck up taxpayer funds to the tune of 10s of billions of dollars to cover the losses on every car, which has been their business model since inception. But 5000 cars a week is 5x the loss rate, with everything already mortgaged.

And if no one wants a $43K Model 3, will enough of them want a $35K Model 3?

Perhaps this is simply seasonal, but I don't believe it. Tesla were screaming out for buyers in traditionally big November/December when they were hitting every lead they possibly could by phone and email and offering immediate delivery. With a $7500 tax credit. I think the only rational take is that M3 demand is dead in the US.

And let's also remember that Tesla were breakeven on $63K cars, while reducing SG&A despite 2x car volume (is that even possible?????) and with two one time improvements on delivery time (30 -> 20 -> 10 days) which went directly to the bottom line due to reduced capital needs. Now they can't sell $43K cars. How is this anything other than lethal to the bull case?