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  • #16
    Though he won't be gone because of his tweets/SEC investigation, rather because of a lack of cash flow at Tesla.  If the SEC bars capital raising by Tesla, it will effectively be a death sentence.

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    • #17




      Though he won’t be gone because of his tweets/SEC investigation, rather because of a lack of cash flow at Tesla.  If the SEC bars capital raising by Tesla, it will effectively be a death sentence.
      Click to expand...


      Agree.

      Its kind of a conundrum. Removing Musk is necessary at this point for lots of reasons, but may come with loss of the Musk premium.

      If they got rid of him maybe it'd be easier to raise, but would hurt share price. If they could raise though, it would absolutely rocket off at this point I'd think.

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      • #18
        Tesla is steadily increasing the production now.  Would be interesting to see Q3 numbers.   With ave Sale Price is closing in on $60k with the spike in Performance trims.   Build costs are est ~$29k by several teardown experts.  They may actually turn a profit this quarter with those numbers despite not fully hitting full production.

        If profitable quarter and Q4 sustained.   All Tesla has to do is throw Musk's phone into the trash (or at least change his Twitter account password--better yet, take a Boring Flamethrower to it).  But, instead, we'll have some insane 3AM tweet in the eve of Q4 numbers trashing something totally unrelated

         

         

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        • #19
          They could be cashflow positive in Q3 or 4.

          Musk could assign someone as CEO and remain chairman of the board or something.

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          • #20




            They could be cashflow positive in Q3 or 4.

            Musk could assign someone as CEO and remain chairman of the board or something.
            Click to expand...


            MegaloMANIACS don't do logic.

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            • #21




              They could be cashflow positive in Q3 or 4.

              Musk could assign someone as CEO and remain chairman of the board or something.
              Click to expand...


              With ZEV credits, depending, they could be and has been speculated as these are usually their good qtrs.

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              • #22


                They may actually turn a profit this quarter with those numbers despite not fully hitting full production.
                Click to expand...


                If Tesla hits a 5k a week production target at say $30k/vehicle profit, then Tesla produces $3 Bio profit over the next 6 months.  Given they have $1.5 Bio of maturing debt (forget about interest the remainder, plus expenses), it is still my belief they will need to do a capital raise before year end.  Given EMs tweeting and overall balance sheet, I could see it being an all equity capital raise.

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                • #23
                  They will have to raise equity again.

                  It will be a good gauge of liquidity in the general market.

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                  • #24
                    There's also the high margins on the 25k quarterly S and X vehicles and ZEV credits to boot that's a very helpful cushion of nearly $1B there (750+250).   The key was the ramp and it appears they've cleared that crucial break even.

                    Every car above that 5k ceiling and certainly the next threshold of 7K will keep them away from need to raise; at least until the next round of CapEx expansion for Giga2 for China and Model Y along with refresh for S and X.

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                    • #25
                      They have to raise as accounts payable has increased to 3B as of last qtr, some of the only operating cash theyve had is because they havent paid their bills. We'll see this qtr if theyve gained any operating leverage. As of yet, they havent been able to so selling more hasnt helped.

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                      • #26
                        The bull argument is that they are CF positive but the capital requirement is investment into future production/R&D which they could cut drastically if they needed.

                        Whatever their cashflow situation, it seems unlikely EM would cut capex in the near future. If this is the case, it seems likely they will need to raise capital in the next 12 months, possibly 6 under the cover of some good q3/4 results.

                         

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                        • #27
                          Capex has been largely completed for the current production line runs.  There's some incremental Capex needed to get to 8k and then 10k units/week on the Model 3 identified, but that's nominal per the independent reports earlier this month.

                          They'll be fine if sustained production is realized along with ability to handle the deliveries.   What would kill this whole thing is a recall or factory incident at Fremont or the Gigafactory.   The debt service is manageable, even as a lot of that comes from the absorption of SolarCity.

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                          • #28
                            Lost another executive today.

                            Idk why they took on so much debt. It was unnecessary, they should have issued stock, thats what you do with high priced shares. Makes no sense.

                            Theyve kind of neglected capex some and then burst it. We'll see, but the capex they need to grow into full model 3 production, and then anything else in the future isnt happening. This is a big concern for the future. You cant meet demand if you havent built factories and lines and such, even if its over the top, just cant be done.

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                            • #29
                              I'm no financial analyst, so maybe this is the wrong thread for me to chime in on but this is my take:

                              I think Tesla the company will make it in the long run. The product is good and the image is white-hot. So many docs especially who would be embarrassed to be seen in a porsche are lusting after these cars. I'm very skeptical that they will be able to truly break into mass-market status but even if they just become a successful niche luxury brand there is plenty of market share that will be captured from the Lexus/Audi/BMW/Mercedes tier of automakers.

                              The problem is that the assumption of eventual success is already priced into the stock, so even though I think the company will make it I am not about to buy stock.

                              To me, the single greatest BUSINESS advantage tesla has is the lack of a dealer network. People love price transparency and hate the dealer experience with the fiery power of a thousand suns, and younger people are entirely comfortable (in most cases would prefer) buying a car on the internet and taking delivery. Dealer franchise laws are going to act as a huge drag on legacy automakers as they attempt to field competitive luxury electrics. And the dealership lobby is one of the single most powerful forces at all levels of american politics so they will not go down without a massive fight.

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                              • #30
                                Yep - GM tried with Saturn, but just ahead of its time and population wasn't ready.

                                Totally agree that the Millennials will prop this model up and run with it.

                                Tesla's strategy isn't niche lux market.  It was only a means to their final destination - mass market production.    Lux market - margins - capital raise - build Gigafactory- build mass market car.

                                The Model 3 product is phenomenal and can easily be this generation's Camry.

                                They are almost over the hump.  Let's see if it works.

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