Tesla Financial Results 2019 Q4 • Hacker News Board

Re: Tesla Financial Results 2019 Q4

#101

Post by toomuchtodo » Wed, Jan 29, 2020, 10:31 PM UTC

xkjkls wrote: post #94

toomuchtodo wrote: post #89

Earlier quoted context omitted.

China is one of the biggest markets in the world and is committed to the rapid deployment of EVs. Unlike the US, those subsides will be around for a while. China also gave Tesla very favorable loan terms for the China Gigafactory.

> Unlike the US, those subsides will be around for a while. Why? That doesn't seem like a stable investment thesis. > China also gave Tesla very favorable loan terms for the China Gigafactory. And if Tesla doesn't meet a number of targets the Chinese government takes complete ownership of the factory. They didn't give the good financing terms out of goodwill. Tesla entered an incredibly risky proposition with its Chi…

You asked what the bill thesis is. Bull thesis is there’s a ton of growth ahead for Tesla. Market reaction seems to agree.

If one disagrees with the market, short TSLA. Hasn’t worked out that well for those starting with relatively large amounts of capital, but maybe shorts are still right! Vote with your dollars.

Re: Tesla Financial Results 2019 Q4

#102

Post by mrtksn » Wed, Jan 29, 2020, 10:34 PM UTC

xkjkls wrote: post #85

mrtksn wrote: post #44

Earlier quoted context omitted.

What I do not understand is, what the company performance has anything to do with its stock performance? It's not like they are paying dividends, right? Totally unrelated markets, it's no different than the crypto coin markets. Even the volatility is similar. Besides that, Tesla has a rockstar CEO. He can achieve things that conventional companies can't even dream of. If he needs money he can do a publicity stunt and…

> What I do not understand is, what the company performance has anything to do with its stock performance? It's not like they are paying dividends, right? Stocks are valued at the long term discounted value of their future cash flows. Are the markets always accurate and rational? No, but that's how they are intended to be valued.

Is there a central authority that makes the calculation and assigns the right value? AFAIK, there's no such thing and the price is determined by the amount that a buyer agrees to pay. It has nothing to do with company performance. The company performance can result in an acquisition, bankruptcy or shares sales/buybacks though, but until that happens nobody knows.

Re: Tesla Financial Results 2019 Q4

#103

Post by stellar678 » Wed, Jan 29, 2020, 10:36 PM UTC

wcarron wrote: post #71

stellar678 wrote: post #60

Earlier quoted context omitted.

I dunno. My bullish view has more to do with Tesla using the vehicle market as an entry point to the broader energy market. If the Tesla cars start throwing off profit and make the company self-sustaining, their vertically-integrated energy thing opens the kind of insanely huge global energy market. They're not just going to eat Ford's lunch - but also Chevron, Saudi Aramco and your local energy company.

I wouldn't hold your breath on that.

I was actually expecting a pretty big drop today given the huge recent runup, so it's fair to say that my breath is not held.

But it's the long term I care about, and I'm fairly confident that Tesla is well-positioned for the direction things are headed.

Electricity (and solar in particular) - Continually reducing production costs on a resource that is unlimited, at least from the perspective of our planet.

Fossil fuels - Continually increasing costs as resources are depleted and externalities are accounted for.

I guess you can tell where my chips are. :-)

Re: Tesla Financial Results 2019 Q4

#104

Post by xkjkls » Wed, Jan 29, 2020, 10:37 PM UTC

mehrdada wrote: post #98

xkjkls wrote: post #55

Earlier quoted context omitted.

Increasing the top line, not necessarily bottom line. There is nothing to indicate that Ys have better margins than 3s.

There's some evidence: pretty much same platform as 3 should imply roughly the same cost structure for the Y. That+higher price implies higher margin. It would be akin to Performance Model 3 in that sense.

There is still more material in the Y than the 3. That doesn't seem to indicate better margins

Re: Tesla Financial Results 2019 Q4

#105

Post by adventured » Wed, Jan 29, 2020, 10:38 PM UTC

xkjkls wrote: post #49

reaperducer wrote: post #11

Earlier quoted context omitted.

That Model A is going to cannibalize Model T sales, but it will be good for a few quarters' pop. Ford is doomed.

Ford was making a profit when the Model T existed. Tesla isn't.

False. Tesla earned a net and operating profit this quarter and last and looks set to continue the trend toward consistent profitability as they roll out their more profitable position in China. They've reached a sales scale where their operating income is annualizing to well over a billion dollars per year. Operating income was $359 million this quarter, and $620 million combined for the two most recent quarters. Free cash flow for the quarter was a billion dollars. They're sitting on $6.2 billion in cash now.

Re: Tesla Financial Results 2019 Q4

#106

Post by xkjkls » Wed, Jan 29, 2020, 10:38 PM UTC

mrtksn wrote: post #102

xkjkls wrote: post #85

Earlier quoted context omitted.

> What I do not understand is, what the company performance has anything to do with its stock performance? It's not like they are paying dividends, right? Stocks are valued at the long term discounted value of their future cash flows. Are the markets always accurate and rational? No, but that's how they are intended to be valued.

Is there a central authority that makes the calculation and assigns the right value? AFAIK, there's no such thing and the price is determined by the amount that a buyer agrees to pay. It has nothing to do with company performance. The company performance can result in an acquisition, bankruptcy or shares sales/buybacks though, but until that happens nobody knows.

> It has nothing to do with company performance.

If that's true then no one would ever invest in stocks.

Re: Tesla Financial Results 2019 Q4

#107

Post by nordsieck » Wed, Jan 29, 2020, 10:40 PM UTC

xkjkls wrote: post #82

nordsieck wrote: post #73

Earlier quoted context omitted.

> I guess the hard to understand part is: how does a $50B company that is growing revenue at 1% annually more than double its market cap in 3 months. This is just my opinion: The way people were valuing Tesla is a massively valuable stock with a high potential of blowing up. From the looks of things, Tesla has crossed into prolonged profitability. It's not a huge increase in revenue, but it is a big decrease in the c…

> From the looks of things, Tesla has crossed into prolonged profitability How? They lost $800 million in 2019. > Additionally, because Tesla can self fund and doesn't have to rely on the markets to raise money, they don't have to care very much about short sellers driving the price down. They still have increasing bills and huge liabilities. Acting like they have no risks if they don't raise money is crazy.

> They lost $800 million in 2019.

You're not wrong.

Of course the counterpoint is that they were profitable both the 3rd and 4th quarter.

> They still have increasing bills and huge liabilities.

That is true. However, some of their debt will convert into equity as long as the stock price remains where it is.

More broadly, I'm not trying to convince anyone that Tesla is some sort of value stock. It's not.

It's absurdly volatile. There's also a good chance that they won't win the race to level 5 autonomy.

All I'm saying is: enough people believe in the upside and think the downside has been diminished sufficiently to drive up the price to where it is.

Maybe they're wrong. Maybe they're right. I certainly don't know.

Re: Tesla Financial Results 2019 Q4

#108

Post by fred_is_fred » Wed, Jan 29, 2020, 10:42 PM UTC

stellar678 wrote: post #60

slg wrote: post #25

I have been a longtime bull, but their stock value is now up over 140% in the last 3 months and I can't say I fully understand why.

I dunno. My bullish view has more to do with Tesla using the vehicle market as an entry point to the broader energy market. If the Tesla cars start throwing off profit and make the company self-sustaining, their vertically-integrated energy thing opens the kind of insanely huge global energy market. They're not just going to eat Ford's lunch - but also Chevron, Saudi Aramco and your local energy company.

I'm curious how you see Tesla as "vertically integrated energy" company. You mean Tesla is going to run power plants and transmission lines? Both are highly regulated, including the price you can charge, with a very low profit margin in most cases, not sure Musk would be a fan.

Re: Tesla Financial Results 2019 Q4

#109

Post by 40acres » Wed, Jan 29, 2020, 10:43 PM UTC

The bull case for Tesla is clear. Aside from Nissan with the Leaf, who recently loss their galvanizing CEO and who's market cap has tanked since, what major automaker has anywhere near the success of Tesla with EV?

No doubt execution has been an issue in the past, but recent sales trends, completion of gigafactory, and Chinese expansion show that they are on the right trend.

Tesla's were confined to the luxury market, but the Model 3 is doing well and Tesla is being allowed to come out with more and more SKUs while the other big auto's are still finding their footing.

The branding is on point without the need to advertise, like the iPhone, Tesla's are becoming just a feature of everyday life (at least in large metro's). Finally, and this is absolutely non-empirical, I just believe in Elon. Tesla might be one of those companies that simply fades away once a galvanizing leader leaves, but as long as his heart is beating I'll hold.

Re: Tesla Financial Results 2019 Q4

#110

Post by mrtksn » Wed, Jan 29, 2020, 10:43 PM UTC

xkjkls wrote: post #106

mrtksn wrote: post #102

Earlier quoted context omitted.

Is there a central authority that makes the calculation and assigns the right value? AFAIK, there's no such thing and the price is determined by the amount that a buyer agrees to pay. It has nothing to do with company performance. The company performance can result in an acquisition, bankruptcy or shares sales/buybacks though, but until that happens nobody knows.

> It has nothing to do with company performance. If that's true then no one would ever invest in stocks.

Why wouldn't they?