Bank America and Lovallo's bearish case. Billions in cash burn before profits in 5 to 10 years.
Tesla is trading at about $203 per share, a significant decline from its 2014 peak of $291, but a huge increase from the 2010 IPO price of $17.
Given that Tesla missed on earnings expectations for its fourth quarter and was unable to deliver 1,400 cars (out of a total of 35,000) in 2014, all eyes are now focused on whether the company can justify its still lofty stock price and $26 billion market cap.
We believe Tesla has seemingly managed to offset a steady stream of negative news and weak financial results by issuing long-term targets that, in our view, are often quite difficult to fathom. We believe that baring a significant reset in investor expectations, this strategy is certain to lose its luster, particularly considering what we see as the long road of challenging financial results and cash burn that lie ahead.
Lovallo's bear case is part of a larger trend among Tesla's financial followers. Since the middle of last year, Tesla's story has changed from being a narrative about a booming stock to being a tale of a manufacturing company with a lot of ground to cross between where it is now and where it says its business will be in five or 10 years.
Sentiment: Strong Sell
Tesla will have to raise cash soon or accept a 25 Billion offer , from Apple or other. I think Musk will remain CEO.
Apple will not pay 75 Billion as some experts are speculating. Expecting big news Monday, just thinking
out loud . If Musk is offered 25 billion right now, no premium, I think he will take it. providing he
remains CEO,with a very generous salary and bonuses.
Disclosure, this is my opinion, I have no insider information.
Twas the night before earnings and all through the plant, not a creature was stirring, not even an ant.
The accountants were hung by their thumbs upstairs, dreading the time that their boss would appear.
The inventory report lay bare on the table, showing thousands of cars whose sales were unable.
The financials already showed quite a loss, and a write down of cars would surely p__s off their boss!
When out in the parking lot there arose such a clatter, they ran to window to see what was the matter.
The parking lot lights in their eerie glow gave the luster of midday to the objects below.
The fear they all felt made their eyes swell, a red model S driven like a bat out of h__l!
Out stepped the driver all nimble and quick and they knew in a moment it was that Big Dick!
He looked up and saw them and snarled out their names, "Hey Baker, hey Jones and you there Moffett!
Get your butts back to work and show me some profit!"
His eyes how they glared, the accountants were thinking, they hoped liked h__l he hadn't been drinking!
His troll like mouth was drawn up in a bow, like it always did before his temper did blow!
He headed inside to check on their work, and they ran like h__l, afraid of this jerk!
They hid best they could and turned out the lights because they knew he'd be mad and ready to fight!
He burst through the door and gave out a great yell, if you don't get this right we're all going to jail!
So turn on the lights and come out of hiding, it's been a long day and I don't feel like fighting.
They turned on the lights, crawled from under the table and told him of cars whose sales were unable.
He listened and said this problem won't float, the missing cars we'll say are on boats!
And so it was decided that long summer night, to ship finished goods for wrong or for right!
His decision made he gave them a warning, be finished by 7 the following morning!
As he barrelled away they heard him exclaim, "I'm a freaking genious, can you guess my name!"
Please you little poor people, get out before the WeekEnd, spend quality time with your family
and your hard earned $$$$ money. Jump when it is time to Jump and walk when it is time to buy TSLA.
I am betting in the later part of the fourth Quarter.
You will thank me and I am saying you welcome in advance.
For sure a 50 dollar stock sooner than most Tesla Motors analyst think.
Sentiment: Strong Sell
At the start of 2014, China was an unlimited market, able to absorb each and every car that Tesla could produce even if sales were zero in the rest of the world. From the 2/29/2014 investor conference call:
Elon Musk – “Yes, absolutely. Yes, I mean -- I think, based on current trends it seems unlikely that we'll be able to satisfy demand in China this year. So there will be unmet -- likely to be, I think, unmet demand in China.”
From the 5/8/2014 investor conference call:
Elon Musk – “So to the degree that our sales track that of other manufacturers presumably China would over time become the biggest market for Tesla. I mean that’s probably the best guess that anyone could make at this point, or in the short-term is that we really don't have a demand issue in China like we’ve got a lot of demand.”
Mid-year, Musk was still planning to accelerate the roll-out in China. From the 7/31/2014 investor conference call:
Elon Musk – “So in terms of number of stores by the end of next year -- or number of service centers I should say by the end of next year, actually I don't have that off-hand. But it's probably on the order of 100 in China alone, I'm guessing, by the end of next year.”
After leading-on investors for most of the year, Musk did a 180 and said that the rest of the world could absorb each and every car that Tesla could produce even if sales were zero in China. From the 11/6/2014 investor conference call:
Elon Musk – “I wouldn't say we're strongly dependent on China for deliveries next year. In fact, I believe even if we did not sell in China next year, we could probably still meet our targets. So even if there was zero China sales. We would like to exceed the targets, but even if we had no sales in China, we would still achieve the targets we mentioned in the quarterly earnings letter.”
And on 12/12/2014 Tesla China President Veronica Wu resigned.
Article by this name now posted at Motley Fool site.
This should not a shocker to anyone, but it will no doubt be disconcerting to many of the posters here who like to give a thumbs-down to anything negative about Tesla.
It makes the simple point that Tesla will not command the entire electric-car market, and discusses a company called Boston Power which intends to compete with Tesla in the battery business. If that happens, margins will be squeezed for Telsa.
Perhaps we are not so far away from an announcement that the Gigafactory may get a bit of a size reduction.
Other issues not discussed in the article: (1) whether huge EV market will actually emerge at all, and (2) where Tesla will get the money to finish its factory, given its furious rate of cash burn.
Sentiment: Strong Sell
and the story that Tesla is production constrained is a myth as I've said all along. What's a fact is Tesla built at least 5,000 or more unsold 4drs. While I can appreciate demo vehicles and loaners, that fleet couldn't be more than 500. REAL customer deposits could be as high as 2,000. Then what? What was the reason the other 2,500 4drs were built ESPECIALLY with Tesla being production constrained and all that. Wow! Let's see? Hmmmm? I bet those other 4drs were nothing more than for-sale inventory which blows a damn hole so large in the Musk excuse and zealot rationalization it's comical.
Tesla does NOT have a waiting list that can't be satisfied because of battery shortages. Justthefacts, you and your pals need to come up with a little bit better fairy tale. Tesla, the business, is choking. They will almost be out of cash by the end of the year because there are no more new markets. That means sales will tank just like in every other market.
This is going to get real fugly, real quick.
Charged: Do you think that’s going to change in the future? How long do you think before the batteries get cheaper and the pure EV comes into its own?
Wright: Two big factors are battery cost and fuel price. There’s actually a tipping point – if batteries get below a certain price and fuel goes up in price, then suddenly the pure EV is more compelling than the range-extended EV, because it’s now cheaper to have more batteries than to have a generator for certain applications. But I have no faith in the idea that we’re going to put in a new infrastructure for fast charging or battery swapping – we can’t even afford to fix the potholes in the road! But the fueling system’s already out there for diesel and gasoline, so I think range-extended is going to be the thing for a very, very long time if you need the range. People talk about decreases in battery cost, but it’s not happening, and I think it’s unlikely to happen for a bunch of good reasons. Fuel prices, on the other hand, are pretty volatile and continually go up. I think in order to get to that tipping point, we’d have to see fuel prices up to about $11 a gallon, then suddenly, EVs make more sense than range-extended EVs for a bunch of applications. But for $3 or $4 a gallon, range-extended is the way to go.
Here you have a company that OBVIOUSLY reported terrible numbers, that OBVIOUSLY has mounting competition, that OBVIOUSLY will need to dilute their shares, that is OBVIOUSLY burning through cash far too fast for them to sustain, and whose future growth prospects are ANYTHING BUT OBVIOUS and yet it keeps getting bought....my guess is by the OBLIVIOUS
Profit is not important.
Cars running on batteries are high tech.
Elon Musk is a genius.
Tesla is a good investment because China is concerned about air pollution.
People who question Tesla's future are Tea Party whackjobs with an ulterior motive.
Battery powered homes are the future.
Emerging competition from large auto manufactures isn't a concern.
These aliens come from a planet they call 243FO3C They instructed me to post this message.
We Aliens prefer flying over English speaking countries, especially the United States at night.
runiing a little last minute Christmas shopping and stopped at the Tesla location at Boca Town Center Mall. The mall was simply mobbed............except the Tesla place that had, including me, 5 people, 4 teenage kids and a father. I waited around for one of the Tesla kids to come over an introduce himself. When he did I asked him a couple of questions and said I heard a lot about the company but how many cars did they sell in the US. He said he thought it was 20,000 in 2014 in the US, but didn't know how accurate that was. He excused himself to ask one of the other people and came back to tell me They didn't know and Tesla hasn't revealed those numbers.
We spoke about the car and how long it would take to get a car. Then he hit me with a zinger. He said I could order a car exactly the way I wished, or take a car from inventory. I asked how large the inventory might be and he pulled out his hand-held computer and pulled up pages-and-pages of inventory. He said it was the Southeast inventory and it was over 600. He then said he thought Tesla had a few thousand previously built 4drs available for sale. He further mentioned some of those cars had 1-50 miles with a "great discount attached. We checked a few and the "discounts" ran from $2.80 per mile to $9.60. We checked 4 cars.
I asked him if he was paid commission or received a bonus for volume. He said they were hourly employees. I asked about trades and he said AutoNation helped with appraisals.
Well, there you have it!!
#1, it appears Tesla is NOT production constrained.
#2, it appears demand is NOT off the charts.
#3 it appears these kids in the stores (Mine started last week) are no different than those kids in any Apple store.
#4, Tesla has farmed out appraisals to a disinterested third party with nothing to lose by low-balling any trade. Kids, everything is EXACTLY as I've said for a long time! Tesla, the business, struggles mightily. US sales have truly stopped. Deposit list evaporated.
At what point do electric car makers run into the environmental backlash from the use of dirty electricity? For the foreseeable future electricity will continue to be the dirtiest energy type utilized around the world. Electricity as currently generated all over the world is hazardous to human health and the health of our planet.
Yet ironically electric cars are viewed as somehow “clean” and environmentally friendly. Therefore when do environmentalist wake up and begin their efforts to curtail government aid directed toward destroying the planet?
This also begs the question as to how this industry is able to “spin” scientific fact and reality and convince citizens to view electric cars as somehow “good”.
When faced with the facts, proponents of electric energy point to sun, wind and nuclear as actual viable alternatives to coal from which more than 90% of the world’s electricity comes from. These proponents point out a time in the distant future when we may reach Nirvana and electricity is abundantly available through apparent magic. Any fair analysis puts this supposed timeframe off centuries into the future. But in the meantime they would have us contaminate our way through dozens of decades in search of some unforeseen solution.
Current electric car owners deceive themselves and others as to their filthy decision. Some owners will insist they create their own clean energy. Evidentially they would have us believe they never drive their vehicle away from home and need a recharge.
Sentiment: Strong Sell
With TSLA's stock the brink of a total breakdown, a completely unsubstantiated rumor is floated and the big boys jump on it and pump the stock up $5 bucks in less than 5 minutes. Then, the sell slowly to the greedy drooling hoards of imbecile longs and succeed in ensuring all the puts they sold expire worthless. This is why I don't buy weekly's. The is real criminal manipulation going on with this stock.
Sentiment: Strong Sell
I can't and won't read your worthless messages. Crawl back under your rock and live life broke quietly. I saw you got divorced recently in the online news.