Tesla Smashes Earnings And Revenue Expectations • Hacker News Board

Re: Tesla Smashes Earnings And Revenue Expectations

#161

Post by JPKab » Thu, May 09, 2013, 1:11 PM UTC

rz2k wrote: post #130

Osmium wrote: post #44

Earlier quoted context omitted.

This quote makes me very happy :) There's nothing better than proving naysayers wrong. As if it isn't hard enough making something useful as it is without people betting actual money that you're not going to succeed...

Shorting is great because it helps minimize how out of control bubbles get. Yet, it isn't free money, because you actually have to be right about a stock being overvalued, as the case seems not to have been here. Being an underinformed naysayer isn't any worse than being an underinformed cheerleader. The only difference is that the naysayers appear to have been wrong in this case for this earnings period. I wouldn't…

I'm not thrilled to bring politics into it, but I have to. A ton of the naysaying on Tesla is influenced by the conservative media's hate affair with anything viewed as environmentally friendly. There are a lot of older Americans with tons of money in the market who watch nothing but Fox News, combined with the relatively politically conservative CNBC (not saying they are partisan, but they are hostile to "green" companies, and take a look at their Keystone XL coverage....). These older Americans who probably never would have bought Tesla stock when ahead and shorted it, waiting for the next Solyndra to unfold.

Solyndra sold a highly fungible commodity in a saturated market. Tesla is selling a machine that, when any skeptic sees it in a showroom, starts to impress in a way that is visceral. My conservative, rural father got in one at a showroom I took him to. He was blown away by the build quality. He knows cars, he knows metal, and he knows engineering. He told me that, mechanically, it is the best built car he has ever seen. He is a car guy, and used to drag me to car shows constantly as a kid.

His only objection was that he couldn't use one where he lives because of the two miles of dirt road he has to traverse to get to his home. I told him they were coming out with an SUV. He now owns stock.

Re: Tesla Smashes Earnings And Revenue Expectations

#162

Post by jonstjohn » Thu, May 09, 2013, 1:22 PM UTC

peterhajas wrote: post #69

> This is Tesla's first profitable quarter. I suppose this isn't factoring in the countless enormous government subsidies. I don't really count this as "profitable".

If you re-wrote company profits with all the subsidies, tax breaks, etc, factored in, you would see a much different profit landscape across the board.

Re: Tesla Smashes Earnings And Revenue Expectations

#163

Post by JPKab » Thu, May 09, 2013, 1:25 PM UTC

mynameishere wrote: post #110

pyoung wrote: post #103

Earlier quoted context omitted.

What?!!! Just so I get this straight. In order to short the stock you have to pay an annual interest rate of 46% of the stock value? I realize most shorts are probably only in it for short term, but that is still pretty insane.

If you sell puts against a short position from May 8 to May 17 (strike: 55.00, price: ~3.40), you can make >5 percent in 9 days. I'm guessing that most of the people borrowing shares at that rate are selling straddles to retail that make the overall position look less crazy. http://finance.yahoo.com/q/op?s=TSLA+Options ...the implication is that unhedged longs are carrying the real risk.

Do you have a recommendation for a good reference to learn all this lingo? I understand what a short is, but WTF is a 'put'? 'Straddles'??? 'Unhedged longs'?

Re: Tesla Smashes Earnings And Revenue Expectations

#164

Post by paddy_m » Thu, May 09, 2013, 1:45 PM UTC

JPKab wrote: post #163

mynameishere wrote: post #110

Earlier quoted context omitted.

If you sell puts against a short position from May 8 to May 17 (strike: 55.00, price: ~3.40), you can make >5 percent in 9 days. I'm guessing that most of the people borrowing shares at that rate are selling straddles to retail that make the overall position look less crazy. http://finance.yahoo.com/q/op?s=TSLA+Options ...the implication is that unhedged longs are carrying the real risk.

Do you have a recommendation for a good reference to learn all this lingo? I understand what a short is, but WTF is a 'put'? 'Straddles'??? 'Unhedged longs'?

A put is an option that gives you the right to sell a stock to someone by a specified date at a specified price. If you buy a put, you are betting the stock price will go down.

A straddle involves buying both a call and a put. If a stock is trading at 10, and you buy a PUT at 8 and a call at 12, you make money if the stock goes above 12 or below 8, between that, you eat the option price. Basically a straddle is betting on volatility.

You can also sell a straddle, sell a put and sell a call, and bet that stock will remain at the same price.

Re: Tesla Smashes Earnings And Revenue Expectations

#165

Post by [deleted] » Thu, May 09, 2013, 1:46 PM UTC

grecy wrote: post #24

rdl wrote: post #19

If you've been in Silicon Valley for the past 6 months, this was obviously going to happen -- virtually everyone I know who could afford virtually any production supercar, and cares about cars, has or wants a Tesla. Not an R8, not a GTR, not a California, not a Panamera, not an M3, but a Tesla. As they ramp up their production (I think it's down to a few months wait), The only rich people (who own cars) not getting T…

Does anyone driving any of those super cars you mention park on the street?

[deleted]

Re: Tesla Smashes Earnings And Revenue Expectations

#166

Post by simonh » Thu, May 09, 2013, 1:50 PM UTC

jstalin wrote: post #155

downandout wrote: post #149

GAAP profit was $11 million. Zero emission vehicle (ZEV) credits sold to other automakers amounted to approximately $68 million. In other words, taxpayers gave $68 million to Tesla this quarter. Without this taxpayer gift, which will be drastically reduced going forward, they would have posted a loss of $57 million this quarter. Not fantastic.

It seems that their business model is entirely dependent on government subsidies. So now that wealth is being transferred from general US taxpayers to the shareholders of Tesla.

Considering the $17.4Bn bailout of the conventional US car industry a few years ago it's small change.

Personally I'd be a little more concerned about the $20Bn per year paid in farm subsidies, to an industry with median household incomes 17% higher than the national average, if I were a US citizen. At least the money going into Tesla is buying the US a lead in the future of automotive technology, instead of going towards further impoverishing third world farmers.

Re: Tesla Smashes Earnings And Revenue Expectations

#167

Post by cheapsteak » Thu, May 09, 2013, 1:57 PM UTC

downandout wrote: post #149

GAAP profit was $11 million. Zero emission vehicle (ZEV) credits sold to other automakers amounted to approximately $68 million. In other words, taxpayers gave $68 million to Tesla this quarter. Without this taxpayer gift, which will be drastically reduced going forward, they would have posted a loss of $57 million this quarter. Not fantastic.

Could you explain how the money other automakers paid Tesla for ZEV credits is paid by taxpayers?

Also why would this 'gift' be drastically reduced? I thought ZEV quotas were rising.

Re: Tesla Smashes Earnings And Revenue Expectations

#168

Post by technoslut » Thu, May 09, 2013, 2:22 PM UTC

dangoldin wrote: post #116

technoslut wrote: post #106

Earlier quoted context omitted.

I'm in NY and I've seen very few Teslas. I'm guessing the three biggest reasons why are the small amount of fueling stations compared to California, the controversial NYT review and just simply trusting what you're used to instead of living off the bleeding edge.

I think the bigger problem is that most people don't own cars in NY since they don't really need them and they're a pain to park unless you're paying for a parking spot. Even then that parking spot may not provide the ability to charge your car. I suspect that if more people in NYC had garages in their owns we'd be seeing more Teslas.

I've seen far more Ferraris out on the road than Teslas and they cost, at least, twice as much. This is not including vehicles that are similarly priced to even the Tesla Roadster which only increases that ratio.

I'd include Long Island (which do have traditional homes and garages) in this as well where I've never seen one on the road.

I think there are issues that exist beyond what you mentioned.

Re: Tesla Smashes Earnings And Revenue Expectations

#169

Post by smackfu » Thu, May 09, 2013, 2:25 PM UTC

cheapsteak wrote: post #167

downandout wrote: post #149

GAAP profit was $11 million. Zero emission vehicle (ZEV) credits sold to other automakers amounted to approximately $68 million. In other words, taxpayers gave $68 million to Tesla this quarter. Without this taxpayer gift, which will be drastically reduced going forward, they would have posted a loss of $57 million this quarter. Not fantastic.

Could you explain how the money other automakers paid Tesla for ZEV credits is paid by taxpayers? Also why would this 'gift' be drastically reduced? I thought ZEV quotas were rising.

Yes, I think the parent may be confusing the ZEV credits with tax credits. Car manufacturers (in California at least) have to make a certain number of cars with low and zero-emissions. For 2012, I think it's 13%. Tesla makes 100% of their cards as ZEV, so they take 87% of their credits and sell them to other manufacturers who don't sell enough low emissions vehicle, or who sell no ZEV.

The important point is that these credits were created out of thin air, and don't cost the taxpayers anything. And their goal is to do exactly what they are doing... to get a certain amount of ZEVs vehicles out there, and to give manufacturers a financial reason to sell more, since they don't want to be buying those credits from Tesla.

Re: Tesla Smashes Earnings And Revenue Expectations

#170

Post by codex » Thu, May 09, 2013, 2:28 PM UTC

Without the cash from selling California ZEV credits gross margin on the Model S would have actually decreased quarter over quarter. It will be interesting to see how it gets to 25% without ZEV, and whether Tesla needs to sell more stock to finance development of the Model X.