Tesla reports great Q3 results, expects to be cash flow positive by Q4 • Hacker News Board

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#31

Post by martythemaniak » Tue, Nov 06, 2012, 4:50 PM UTC

xoail wrote: post #23

I loaded few hundred shares of TSLA in my portfolio only because I love the innovation this company has to offer. I would normally not invest in a company that has high uncertainty like Tesla but something about the company and Elon Musk made me own a piece of it. I am not sure if it was a good investment, but I am happy to be a part of it.

It's not often that us investing plebs can get in and bet on people like Musk fairly early on.

I did the same thing about a year ago and I'm still happy that I did, despite the stock not moving over the past year. I do believe Tesla can become a major car manufacturer during the transition to electric cars, since this period will likely be fatal to some of the weaker legacy companies.

I also realized that I may have purchased a ticket to Mars. If Musk's plans for both Tesla and SpaceX pan out, my Telsa shares will hopefully be worth as much as a trip to Mars in 30-35 years :)

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#32

Post by jcampbell1 » Tue, Nov 06, 2012, 5:17 PM UTC

timdorr wrote: post #22

codex wrote: post #11

I don't understand why Tesla's losses keep increasing; now they're losing $33M a month, up from $20M a month a year ago and roughtly the same as last quarter. That with $50M in revenue this quarter and actual shipping product. Can someone explain? Are they still purchasing capital equipment? Are their overheads that high? That said, $30M a month is not that many cars. If they can sell them, and losses don't increase…

Right now they are building the Signature series cars. These are the first 1000 cars. The reservations for these cars involved a $40k payment up front, in some cases up to 3 years ago. General production cars only required a $5k payment up front. As a result, they are only capturing ~$50k per car, versus ~$85k once GP cars start rolling off the line. In addition, they've been ramping up production (they're roughly ha…

> As a result, they are only capturing ~$50k per car, versus ~$85k once GP cars start rolling off the line.

That is not how GAAP accounting works. You record revenue when you finish building the car and it leaves the factory gate, not when you accept a deposit.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#33

Post by Shivetya » Tue, Nov 06, 2012, 5:19 PM UTC

rayiner wrote: post #26

Shivetya wrote: post #25

Earlier quoted context omitted.

Nepotism is a live and well at the local and state level. If anything it works just fine at the national level, the difference is that today's politicians have become very adept at keeping you from finding out. Better yet, when you do find out and they get caught they rarely suffer any consequences for it.

Yes, there is a problem, we just can't see it! Sigh. Every federal government contract that has even a hint of favoritism is litigated to all hell, where lawyers comb through everyone's emails going back years to dig up any dirt they can find. If it was a big problem, we'd know about it. Nepotism is alive and well at the state and local level. This is partly because state and local governments are far less sophistica…

Okay, let me put it another way. While they may not get the contract, friends and relatives of the same politicians suddenly do find themselves beneficiaries of those who do win the contracts.

Remember the fun with Countrywide and the sweet heart loans? How some politicians or their friends do so well in the stock market or get into IPOs at a level not afforded to the public. If not family is it not worse when those who support your campaigns are the ones more likely rewarded with the contracts?

So yes, while direct attempts may be protected against nothing stops the train of indirect benefits.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#34

Post by rayiner » Tue, Nov 06, 2012, 5:21 PM UTC

dkhenry wrote: post #30

rayiner wrote: post #15

Earlier quoted context omitted.

Leaving aside the silliness of deciding macroeconomic policy on hypothetical edge cases for a moment... How often does that happen? The US government is utterly paranoid about nepotism, to the extent that we waste a huge amount of money in the bidding process for government contracts because we don't want to seem as if we're favoring anyone, even if that favor is the result of something like having done good work in…

This isn't an edge case. In fact the NYT just did an expose on how this effects China[1]. You will also find this kind of corruption in every other country where the government is allowed to openly partner in private ventures. Heck we did it in America with Boeing under the pretense of security and managed to mothball our entire aviation industry. 1. http://www.nytimes.com/2012/10/26/business/global/family-of-... See…

It's an edge case in the US, and it's not like we don't have public/private partnerships here.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#35

Post by rayiner » Tue, Nov 06, 2012, 5:28 PM UTC

rdl wrote: post #29

rayiner wrote: post #26

Earlier quoted context omitted.

Yes, there is a problem, we just can't see it! Sigh. Every federal government contract that has even a hint of favoritism is litigated to all hell, where lawyers comb through everyone's emails going back years to dig up any dirt they can find. If it was a big problem, we'd know about it. Nepotism is alive and well at the state and local level. This is partly because state and local governments are far less sophistica…

There is structural favoritism, if not nepotism, in the federal system. The byzantine bidding process, requirements, etc. mean only either very large companies or very specialized companies tend to go for direct government contracts. Plus, even in cases where they are initially assigned fairly, they become a prime contractor and can be gatekeepers on every other aspect of the system. Even if their decisions are then…

I used to work for a smallish company that works on DOD contracts. It's really not that bad. We did most of it in-house. I doubt it's worse appreciably worse than dealing with any big faceless organization (try contracting with Wal-Mart or Boeing).

Big organizations have transaction costs associated with them. That's kind of inevitable. But the question is whether eliminating a few billion here and there in transaction costs is worth forgoing potentially huge benefits from public/private partnerships.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#36

Post by xutopia » Tue, Nov 06, 2012, 5:31 PM UTC

codex wrote: post #11

I don't understand why Tesla's losses keep increasing; now they're losing $33M a month, up from $20M a month a year ago and roughtly the same as last quarter. That with $50M in revenue this quarter and actual shipping product. Can someone explain? Are they still purchasing capital equipment? Are their overheads that high? That said, $30M a month is not that many cars. If they can sell them, and losses don't increase…

If you're scaling up production this is common. You invest a lot in the ability to produce something you can sell. It makes sense to have a loss while you ramp up. It's an investment.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#37

Post by xoail » Tue, Nov 06, 2012, 5:37 PM UTC

martythemaniak wrote: post #31

xoail wrote: post #23

I loaded few hundred shares of TSLA in my portfolio only because I love the innovation this company has to offer. I would normally not invest in a company that has high uncertainty like Tesla but something about the company and Elon Musk made me own a piece of it. I am not sure if it was a good investment, but I am happy to be a part of it.

It's not often that us investing plebs can get in and bet on people like Musk fairly early on. I did the same thing about a year ago and I'm still happy that I did, despite the stock not moving over the past year. I do believe Tesla can become a major car manufacturer during the transition to electric cars, since this period will likely be fatal to some of the weaker legacy companies. I also realized that I may have…

I agree... and I'd be happy to see Tesla really bring innovation in automobile industry not just in electric car segment. But I also fear it being acquired by behemoths like GM or Toyota, that would just kill all the innovation.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#38

Post by scarmig » Tue, Nov 06, 2012, 5:57 PM UTC

twoodfin wrote: post #8

redwood wrote: post #6

Earlier quoted context omitted.

There's this idea floating around that governments shouldn't support businesses. I guess there is nuance in that some might say: government should support business sectors, but not specifics businesses over others. Anyway it's an odd argument when we look at the history of the country where governments and specific companies often worked hand in hand and continue to do so in so many areas. Many argue that the America…

There's a difference between being pro-business and pro-market. Historically, industrial policy doesn't have a terrific track record.

Hmm. My impression has always been that industrial policy did a whole lot to set the stage for the East Asian Tigers to come up like they did. The government and companies involved certainly think so. (Then again, they would, wouldn't they?)

At the very least, it seems that governments proactively favoring companies whose profitability lies in investing for high productivity work instead of labor intensity or natural resources tends to pretty compatible with decent outcomes.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#39

Post by rdl » Tue, Nov 06, 2012, 6:03 PM UTC

rayiner wrote: post #35

rdl wrote: post #29

Earlier quoted context omitted.

There is structural favoritism, if not nepotism, in the federal system. The byzantine bidding process, requirements, etc. mean only either very large companies or very specialized companies tend to go for direct government contracts. Plus, even in cases where they are initially assigned fairly, they become a prime contractor and can be gatekeepers on every other aspect of the system. Even if their decisions are then…

I used to work for a smallish company that works on DOD contracts. It's really not that bad. We did most of it in-house. I doubt it's worse appreciably worse than dealing with any big faceless organization (try contracting with Wal-Mart or Boeing). Big organizations have transaction costs associated with them. That's kind of inevitable. But the question is whether eliminating a few billion here and there in transacti…

It really depends on the type of contract. (I also did defense contracting, both bootstrapping my own and working for a larger (25-50 person) company)

I'd say overall it is beyond what an early stage startup can do (non-dod-focused), without a great partner. Selling products is a lot easier than selling ongoing services, but the profit is all in services. A lot of the difficulty was due to it being a classified contract (the work itself wasn't, but the work locations and interoperability were). It's probably feasible for a successful small business with a full time person, particularly if the business is set up to go after government from the beginning.

Big companies aren't cost-free as clients, but there's less "if you do X wrong, you could go to jail" (which essentially never happens absent willful fraud, but still). The citizenship requirements also make it really hard for tech companies.

Re: Tesla reports great Q3 results, expects to be cash flow positive by Q4

#40

Post by dkhenry » Tue, Nov 06, 2012, 6:30 PM UTC

rayiner wrote: post #34

dkhenry wrote: post #30

Earlier quoted context omitted.

This isn't an edge case. In fact the NYT just did an expose on how this effects China[1]. You will also find this kind of corruption in every other country where the government is allowed to openly partner in private ventures. Heck we did it in America with Boeing under the pretense of security and managed to mothball our entire aviation industry. 1. http://www.nytimes.com/2012/10/26/business/global/family-of-... See…

It's an edge case in the US, and it's not like we don't have public/private partnerships here.

For now its an edge case. Thats partially the case because we put such stringent restrictions on the kinds of assistance we can offer, but even in America there are claims of corruption with giving out government assistance.

http://www.politifact.com/florida/statements/2011/nov/15/ame...