Tesla Shareholders Finally Fed Up? Could it be true?

[Rodent + 1,424]

$TSLA down over 7% today, and over $35/share in two days. Yikes.

http://fortune.com/2018/07/04/tesla-brake-and-roll-test-skip-stock/

Raise your hand if you think $TSLA stock will rise again, buoyed by some outlandish tweet Musk will make in the near future. 

 

[Tom Kirkman + 8,860]

Rodent, perhaps you may want consider editing the title of your thread, changing Tesla Shareholders to Tesla Moneyburners.

[Jan van Eck + 7,558]

The on-going problem is that Tesla cannot provide a return on investment to the purchasers of its equity shares, and it looks like Tesla will not be able to raise the funds from internal flows (ongoing operations) to pay the bondholders, and likely is not able to raise the funds to pay the trade creditors (the most ominous of the problems).  One of the big problems in actually meeting a production target  (such as the 5,000 a week cars off the line) is that now the analysts can have a metric to measure actual profits and losses.  And it still looks like Tesla cannot develop actual earnings even at that production level to pay the bills. 

Now, do the individual share buyers accept that?  No, of course not.  That group is running on emotion, that Elon Musk is the Savior of the planet.  Those guys will continue to buy and hold.  But Tesla stock is largely in the hands of big institutional investors, with huge blocks held by those institutions.  And some of those big-block holders have been quietly attempting to get out from underneath and unload.  They cannot unload "everything" in one shot as the secondary market is too thin; you do that, you end up where GE is.  But the institutions have been backing away, now that the costing and factory issues are becoming clear.  So when you see these pricing drops, it is more likely than not that some institution has attempted to unload a block larger than the individual buyers can absorb. 

If you were to apply ice logic to Tesla, right now the share value might be four bucks. 

Edited July 4, 2018 by Jan van Eck

[Sebastian Meana + 278]

Tesla will have to get bankrupt sooner or latter even if they manage to make enough model 3 cars the profits for the company are incredible thin, normal people with average salaries instead of spending 45000 dollars plus 2500 dollars of reserve to have a model 3 from a car company that isn't very well known for realiability sooner or latter would preefer an electric cars from VW, Hyundai, Honda, Mercedes, BMW that will enter in production by 2019-2020

And they would get service from cars maded by companies that are not going bankrupt, what's more with increased competence Tesla would have to put more money in development an research trying to compete with german, and japanese manufacturing, raising the profits even lower, or making the losses higher

They are just dead, the world is getting that solar panels are a waste of time, battery for grid scale energy storage is pretty much the same as burning money instead of coal or wood, and that they are not going to make money. They had a monopoly in electric cars, they were not the first, but they were the most interesing, the Roadster and Model S were the first interesting electric cars, they called for competence and they are getting it.

Goodbye TSLA, we see in hell

Edited July 4, 2018 by Sebastian Meana

[NickW + 2,714]

Tesla has massive scope to reduce costs without effecting production.

Of its 37000 employees at least 9000 are employed primarily to stroke Musk's Ego. 

[markslawson + 1,042]

Tesla is an extreme example of what might be called the tech/halo effect. Stocks like Amazon come to mind, in that they never seem to make a profit but shareholder don't care.. they are buying the promise of being in on the ground floor of a brave new world of whatever.

That said, Tesla is an extreme example as it's share price bears no relation to its underlying operations. Those are still losing hundreds of millions of dollars a quarter. If Musk can cut this back to a loss of say $10 million a quarter he may be safe, as he can then go for some time without raising more money from the market. Can he cut it back to those sorts of levels? I doubt it but its not my problem. 

[Jan van Eck + 7,558]

18 minutes ago, markslawson said:

If Musk can cut this back to a loss of say $10 million a quarter he may be safe, as he can then go for some time without raising more money from the market. Can he cut it back to those sorts of levels? I doubt it but its not my problem. 

No chance.  Way too much overhead burden inside their structure.  Cannot be done. 

Companies doing new things, such as Tesla, only survive when their operating margin on sales is at 50 to 55%. Then you have the ability and the flexibility to deal with the overhang from invested capital in the operation and the ensuing overhead burden, such as debt service.  The guys at Apple understood that, and have stupendous margins on each new product introduced.  That propelled them into the stratosphere. Tesla has interesting products, at least envisioned, but makes no money, so it cannot chip away on or service the debt overhang.  I really don't see any hope for Tesla, as those cars are going to remain pricey to build and are not selling at compatible margins (except apparently the original Model S).  You would have to have the world's most incredibly patient creditors on board for Tesla to survive without a bankruptcy dip and rinse.  

[markslawson + 1,042]

Jan van Eck - as I noted I also doubt he can cut costs to that extent, but he's gotten this far on big talk, maybe he can go further?

[Tom Kirkman + 8,860]

Time to get out my industrial barrel full of popcorn... 

Of course, I will use my handy dandy solar powered popcorn popper because I certainly wouldn't want the media labelling me as a hypocrite  *eye roll*

Liberal Meltdown: Furious Libs Outraged After Elon Musk Revealed As One Of Top Republican PAC Donors

Who knew that the black swan - or rather "red elephant" - that could destroy Tesla was not its staggering cash burn rate, which last quarter went through $12 million every day, would be the "shocking" discovery that the opportunistic self-proclaimed "socialist" CEO with a penchant for taxpayer subsidies was in fact... a closet republican.

Earlier today, ProPublica published filings which revealed that Elon Musk is a top donor to a Republican PAC named Protect the House and aimed at keeping control of Congress. The PAC raised over $8 million in in the second quarter for Republican lawmakers hoping to fend off Democratic challengers.

[DanilKa + 443]

if you haven't heard a story of Elon calling British head rescue diver "pedo" (for living in Thailand, I guess - no other details given) in a twit he later deleted - after he told CNN min-sub idea was impractical and it had no chance to make it more than 50m into the cave, telling Musk to stick it where it hurts and leave in hurry - check it out. That's after questioning expertise of Thai officials. Can't invent sh!t like this...

If interested in $TSLA story - check debate between Montana Skeptic and Galileo Russel on QTR podcast later today (Mon US time).

[Tom Kirkman + 8,860]

Yep, this latest meltdown by Elon is pretty spectacular.

 

[John Foote + 1,135]

On 7/4/2018 at 8:41 PM, markslawson said:

Tesla is an extreme example of what might be called the tech/halo effect. Stocks like Amazon come to mind, in that they never seem to make a profit but shareholder don't care..

I absolutely agree there is a lot of "vapor ware" in tech, especially early on investors are buying a vision and dream. Telsa managed to blind folks to the reality of running a car manufacturing company. A lot of write-downs to be had, but without Tesla pushing things, the rest of the industry would be years behind. And Elon might believe his own silliness. 

As for Amazon, it makes money, real money, does so quarter after quarter, and will probably do much better as time goes on. But for every Amazon, many, many failures. Debt to equity is fine, and the debt in long term leases, not borrowing to run things. It's becoming a modern blue chip. Which I admit I find odd, but it is what it is.