Shares Of TSLA Rocket Up Even Though It Had A Q3 Loss, But WHY? Are You BUYING, SELLING Or HOLDING?

TESLA IS A AUTOMOTIVE VERSION OF BERNIE MADOFF!

With the added problems at VW - maybe they think that the Audi that will be a competitor for the Tesla will be delayed.

Tesla only has a small window where it is a monopoly on longer distance EVs. Soon others will produce them - even with low gas prices- and Tesla will not have the room to respond

Hold. But once the industry big guns get their act together and really lean in on the luxury electric market sell quickly or wait for Chinese or Korean buyout depending on your cost basis.

Personally, I took profits yesterday.

I reluctantly sold a big pile of RIM (Research In Motion, now Blackberry) at around $87 several years back. My financial advisor warned me about the risks of self-investing and trying to "time the market." Turns out her advice was sound.

I keep occasionally seeing Blackberry shares pushed upwards, too.

Yes, I know Blackberry and Tesla are worlds apart, but it does show you that stock price can take a significant upward jump even when a corporation is on life-support and dying a slow, slow death. Stock price reflects what a bunch of people *believe* about a company.

Oh Steve, you don't really believe Tesla is dying a slow, slow death - do you?

runninglogan1: I believe that lots of people playing the stock market are enamored with Tesla, and are buying Tesla stock. This drives the stock price up. I also believe what Tesla's financials reveal, and that is that they lose about $4000 for every vehicle they sell, and they depend on government grants and other incentives to *survive* (not just "do better"). This is not a sustainable model in the long run.

At this time, I don't believe Tesla is a viable long-term proposition, but until then, some people will do nicely trading their stocks (while others will hurt from the same activity).

TheSteve,

What has Tesla done/not done to make you believe that it is not a viable long-term proposition? How do you see the automotive future and Tesla's role in it?

vdiv: Just some examples of why I question Tesla's viability:

(1) Tesla loses about $4,000 per vehicle sold. They bleed red ink.

(2) Tesla depends upon government grants, subsidies and other benefits in order to survive; not just be more profitable (see point #1, above). This is not a sustainable business model.

(3) The vehicles have reliability issues. They're well publicized. Tesla merely increased the warranty period, which is great... assuming they're around to honor it.

(4) Tesla's financial statements give cause for concern. Their P&L (Income Statement, AKA "Profit & Loss statement", which details revenues and expenses) shows they can't make a profit. Their Balance Sheet (which details assets, liabilities, and equity) shows they're "renting" their lifestyle without hard assets to back up the company. Again, financial analysis shows their *current* business model is not sustainable.

(5) While analysts wonder when Tesla will start turning a profit, the company continues to miss its sales targets. Translated into Laymens' Lingo, Tesla's forecasts of profitability keep getting pushed back due to low sales, so they continue to run at a loss.

(6) Questionable business practices. In one example, Tesla got a fat grant from the US Government for creating vehicles with quick-battery-replacement technology. Conceptually, a Tesla owner can drive into a station and get their batteries replaced in a matter of minutes with ones that are fully charged, and then be on their way. Tesla got the grant money. Only 1 such station exists in the US. Tesla Motors met the requirements to receive the taxpayer dough, but virtually no Tesla owners see any benefit from it. (This is a very specific example of Point #2).

(7) Mr. Musk is a Spin Doctor. Whenever someone raises concerns about his company or his products, he deflects and spins. Examples include two different car reviewers who gave the product lackluster reviews. Both were met with Musk's packaged spin: an assertion that they wrote the review before the car arrived. He even reused the same spin. Weak.

(8) All of Tesla's products are high-priced, low-volume items. They're toys for the rich, not making any meaningful market penetration, and not affecting the economy or the environment in any meaningfully positive way. They do get a lot of press, though, as being "the way of the future." Yeah, if you're wealthy, and you're enamored with tech. Most rich folks buy conventional propulsion vehicles, so Tesla isn't even capturing a significant portion of this market. This in itself isn't a problem for a profitable company. But for a company that bleeds red ink, like Tesla, it's not a viable recipe for profitability.

"Are You BUYING, SELLING Or HOLDING?"

Neither. I'm driving :)

You need to separate out gross margin and net margin. If Tesla stopped investing in new infrastructure, they would be making a 25% profit off each car sold. Last quarter they invested a half billion dollars in new infrastructure related to the Gigafactory, Model X, and Model 3. The $4,000 figure is completely deceiving.

Its all about cash and cash flow. If Tesla is unable to generate consistent cash from operations, Telsa will eventually go out of business.

Once confidence in Tesla is lost (i.e. because people hate their Model X's with those stupid falcon doors and nobody buys them), the grim reaper will appear and it will all be over.

Investing in Tesla is like juggling some knives - sometimes the knives go up, sometimes they go down, sometimes they will slice off your hand if you are not paying attention.

A car company investing in its future instead of stuffing the pockets of its executives? GASP!

Tesla is not "investing in the future" - they are obtaining "OPM" (other people's money) to pursue a dream they have temporarily convinced other people who have money to share with them. When those people with money tire of or grow doubtful about the endeavor, the money will dry up, unless of course Tesla is generating its own money by then.

That's the notion of investing - raise some money with the promise to investors that an idea with eventually generate enough money to pay them back, big!

Not likely to happen with Tesla.

Tesla and the people investing in it believe that the company can do both, it has to do both since they are really one and the same. The "other" people are customers and beneficiaries of these investments. If Tesla fails it would not be because of too much investment in new technologies, it would be because of not enough.

We see examples over and over of other car companies that only care about the short term profit margin and are willing to do anything to keep it up. Look how they turn up.

Tesla crazies are just that.

Proud of it too! :p