yea pretty sure they will hit positive fcf. i mean the head of accounting just quit. he obviously couldnt handle. musk will find someone who can fcf positive that shit.
6,000 model 3 cars produced a week.
100,000 pre orders
The stock is going to go to $600.00 I swear.
SEC is suing Musk for securities fraud, stocks down by almost 10%.
Shareholders must be happy with their enfant terrible CEO.
I’m actually going to buy a shit ton more tomorrow.
TSLA engineers right now
From today’s WSJ:
““Musk stated that he rounded up the price to $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny, which admittedly is not a great reason to pick a price,’” the SEC’s complaint says.”
and then:
““This unjustified action by the SEC leaves me deeply saddened and disappointed,” Mr. Musk said in a statement. “I have always taken action in the best interests of truth, transparency and investors. Integrity is the most important value in my life and the facts will show I never compromised this in any way.”” and to cap it off:
“Tesla and its board said in a statement they were “fully confident in Elon, his integrity, and his leadership of the company.””
Are they insane? You simply cannot run a public company, or any company for that matter, in this way.
If I wouldn’t be such a pussy, I’d definitely short the stock.
We buying the dip?
6000X52=312k
lets assume best case anda they sell every car for 50k a pop that’s 15.6b in rev per year.
currently company rev is about 14b. so that’s good for scale.current gross margins arre currently at 20% so that’s 3b
if tesla model 3 gross profit is much higher, lets say they get their gross margins are at 30%, that’s 4.5b in additional gross profit.
lets assume op expenses dont rise. their current op expenses is roughly $4b. and an additional 600m in interest expense. they will be net income neutral.
right now the company is burning $4b in cash per year. assuming they dont make more investments. they will finally be cash flow neutral or even positive. this is what musk has been talking about. so this’ll be the most important thing. he predicted q3/q4 to be cash flow neutral.
but this is all assuming best case!
I hope they throw the book at him to be honest. I don’t have anything against him and don’t mind all his antics but what he did was unacceptable.
The thing I find most surprising is the number of people commenting on news stories about the issue saying that short sellers deserve to make losses because shorting is immoral. Sometimes things like this remind you of how far removed we are in the investment industry. Maybe it’s just because I’m reading UK news sources.
my thesis is in Elon. If he’s out I’m out.
So I still couldn’t convince myself to buy (I always call bottom to early). I’m tempted to step in given the likelihood this thing will drag on for over a year at least while the company continues to operate largely unaffected. That said, he may find rolling debt hard and what if that brings an equity issue.
guys guys guys guys… Please. This is America! We’re not sending a CEO to jail for some stupid corporate governance slip up.
Buy the dip.
Still fun to watch from the sidelines. Looking back, should have loaded up on puts right after seeing that tweet. Immediately after seeing that, I thought, fake news, this guy is fucked. But didn’t take any action.
Eh, all you’re doing is rationalizing something that makes investment sense. News can push stock prices almost in any direction OTHER than what the expectations are (including sometimes the direction of our expectations).
Basically trying to say that our understanding of economics markets is inappropriately applied to our understanding of financial markets.
I’m sharing a mistake I made, one of omission as opposed to one of commission. I think about both types very carefully.
HP’s right actually. The premium after the announcement was based on fluff and with put’s you’d have had a nice optionality exposure. Issue was the cost of the puts back then was outrageous. You’d have had to gone so far out of the money to make it worthwhile.
A similar case is made in these articles:
whats the premium cost as a percent of price? i would have thought that mooning stocks would have relatively cheaper premiums.
The premium for the take private deal was 20% if that’s what you’re asking.
i know all about 420. curious on the premium on puts when the stock price was at its peak.
I was just saying that even though the puts took a hit when the stock jumped it’s an expensive position to take in TSLA in general because the volatility is so high on the stock and supply demand was out of whack given people trying to hedge gains. I mean, you were still paying >$50 to buy puts at $350 (100x) when the stock was at its exact peak of $380 despite the fact that it’s price just two days before the tweet was $350 (had jumped on earnings). I mean, now it looks like a no brainer but if you assumed even 90% chance you’re right you’re still just out an option unless it falls back below the pre-tweet price. So from a price perspective I mean it’s still a great trade but those options aren’t cheap given the volatility so you really have to be right.