Tesla Posts ANOTHER Loss In First Quarter, How Long Can This Go On?

> How Long Can This Go On?

Ask Netflix. $12B in debt and counting. And Tesla has 2x the revenue!

Does this answer your question? A while.

Not really, randy. Netflix is a growth company that is still growing.
Tesla, the demand has hit a wall. A growth company not growing and going through cash faster than they are generating it will not last long. These results are an unmitigated disaster.

netflix will lose its entire 3rd party catalog. both are going away

How much or how little money Elon can raise and with what conditions will tell a lot about what the heavy hitters think of his chances.

I read that a number of long time bullish investors are finally concluding that demand is not going to be enough to run the company or achieve positive cash flow.
Elon has just about exhausted his demand levers and sideshows. His autonomy day was half-baked at best.

If Tesla posts another loss of more than $300 milion in Q2, I fully expect it will have to raise capital this year. It will not have enough cash on hand to last through 2019 given its cash burn rate. That's really what it comes down to. The company simply won't have enough cash on hand if it keeps posting these huge quarterly losses.

The comparison to Netflix is off-base. It's two completely different industries with two completely different products.

Netflix is profitable. Telsa hasn't had a single profitable year in its history. It loses money on every single car it makes.

Tesla even has negative working capital (current assets of 7.7 billion and current liabilities of 9.2 billion). Model S and X sales fell off a cliff.

They had 2 profitable quarters back-to-back last year, think the same will happen this year. S and X sales did fall off a cliff, but they just released new versions with up to 370 miles of range that should pick this up quite a bit.

Being profitable for two consecutive quarters is very different than being profitable for an entire year, something Tesla has not come close to doing. Even in 2018, when Tesla posted a record $21.4 billion in revenue, it still posted a $1 billion loss for the year overall.

Investors will only go so long before they start demanding consistent profitability because Tesla is not an Amazon with soaring growth built from huge businesses that do very different things.

https://www.theverge.com/2019/1/30/18203886/tesla-earnings-q1-revenue-profit-record-model-3

Personally, as an investor I would love for them to be profitable every quarter and every fiscal year. However, if they really do have a competitive advantage in self-driving, it might be worth it to invest in growth at a loss and reap the benefits later on (Amazon style). I'm not saying that is what happened this last quarter, that was a straight disaster besides the fact they grew 30% YoY. I expected more and hope they step it up this next quarter. It is too late in the game now for stupid mistakes.

There are many other better investment options. Tesla is down nearly 6 percent again today reaching a new 52 week low and falling while the rest of the market is rising. Ford announced excellent earnings. Another disasterous quarter - and Elon is preparing for a significant 2nd quarter loss and the ship could be sunk.

I could carry that further that all politics is identity politics today. With the terrible Citizens United SC decision a few years allowing unlimited money into elections facts and reason went out the window.
Trump's identity is pure white igonore the constitution that helped make us the most powerful nation and admired nation.

Ford sales are down YoY and their roadmap is not super exciting for me. Love the idea of an electric F150 and Mustang SUV and perhaps a partnership with Rivian, but I don't think that will let's say double the size of the company. Might as well invest in real estate for steady, boring growth. I like stocks that have exciting return potential years down the line. Made over a 2000% return on Google same with Adobe. Already at 1000% with Tesla, but think there is a lot more potential there than most realize.

Of course you have to say that, but there is a lot of excitement for the following Fords in the pipeline:

Shelby Mustang GT500
"Mach I" / "Mustang" crossover
Ranger Raptor
Bronco
"Maverick" AKA "Baby Bronco"
Courrier
2022 CD6 Mustang

The lame brain liberals who have doggedly supported the Tesla stock at totally unrealistic levels are now finally WOKING up and dumping the Tesla stock.

I don't think it is political. I know three people who own Teslas and all are Republicans.
Supporting an incompetent leader who is divorced from reality seems to be the common thread.

@truthy, No one is as blind as those who will not see.

If I owned a Tesla, the license plate frame would read: "MAGA, Bitches!"

MAGA Bitches is already taken by the many porn stars that have been paid offin violation of campaign finance laws.

Perhaps you're right, the Democrats love their peccadillos and perverting all good things, don't they? Hell, they are even testing the waters on a candidate with a name that sounds like a taboo sexual device. Peter BootieGag sounds obscene. LOL

hah! I wondered how to pronounce his name. Not that we will have to know for long.

He pronounces it something similar to bootie judge, but it's just more tokenism/identity politics from the Democrats:

"Hi, I'm Obama. Vote for me solely because I'm black."
"Hi, I'm Hillary. Vote for me solely because I have a vagina."
"Hi, I'm Ilhan. Vote for me solely because I'm a terrorist."
"Hi, I'm BootieGag. Vote for me solely becuae I'm gay."

I could carry that further that all politics is identity politics today. With the terrible Citizens United SC decision a few years allowing unlimited money into elections, facts and reason went out the window.
Trump's identity is pure white supremecy,(vote for me I'm white and don't like those other people either) igonore the constitution that helped make us the most powerful nation and admired nation.

@Truthy I'm NOT sorry, but this it 100% bullshit and hate speech on your part: "Trump's identity is pure white supremecy (sic)". To imply via that statement that everyone who voted for Trump is a white supremacist is demeaning and hateful to the tens of millions of Americans who voted for him. Just because YOU didn't does not give you the right to impugn others.

It’s a sign of Musk’s battered reputation among investors that the credit markets are deeply skeptical of Tesla.

At this point, Tesla is now apparently seen as a worse credit risk than, say, the governments of Turkey, Angola, Colombia, Benin, and Kazakhstan. All of those countries’ 2025 bonds sport yields below those of Tesla’s, meaning investors are willing to lend to them more cheaply than they are to Musk.

Tesla bonds now yield nearly three times as much as those from Greece.

"As long as fools continue to invest their money into the company Tesla can survive"

Buying Tesla stock doesn't provide a dollar of funding to the company. The only way Tesla can survive is on cash from a capital raise (debt or equity, and people suspect that Tesla is prohibited by the SEC from doing so, otherwise they would have already) or a miraculous turnaround in sales of high margin vehicles (S&X).

The company's capex is less than depreciation, which means the company is in shrink mode.

I do not think the SEC is stopping them yet. They still have $2.2 billion on hand - not nearly enough to continue operations let alone invest in new products. I believe Elon is waiting for better conditions which may never happen. Borrowing money with their debt rating let alone balance sheet would be expensive.
Printing more stock while it is falling (and diluting current stocK) is not an attractive option either.

The $2.2 billion in cash and cash equivalents includes $768 million in customer deposits which Tesla can't touch. So really there is only $1.4 billion cash.

Make-it-or-break-it time for sure.

IMO - if you currently have a Tesla deposit outstanding, now would be an excellent time to demand it back.

By the way, let me educate you to the concept of the "Bankruptcy Preference Payment" - A preferential debt payment is a payment made for the benefit of certain creditors shortly before filing for bankruptcy. ... The bankruptcy trustee has the power to avoid (undo) preferential payments and recover that money or property to distribute among all of your creditors.

So, if you are a deposit holder and Tesla files for bankruptcy, you (obviously!) will likely never get your deposit back.

HOWEVER, if you wait too long to ASK for your deposit back but you actually do get it PAID back BEFORE Tesla files for bankruptcy - there is a VERY STRONG CHANCE THAT THE BANKRUPTCY JUDGE WILL MAKE YOU PAY IT BACK INTO THE BANKRUPTCY ESTATE OF TESLA. How much would that SUCK FOR YOU?

I am not giving advice but it seems like if you are not taking delivery of your $35,000 Model 3 within the next few months, it might be a consideration to get your deposit back PRONTO!