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That is worth taking with a massive pinch of salt. A lot of the 'evidence' and points made in that post are like reading tea leaves. To give one example: > In
by slivym 8y ago
That is worth taking with a massive pinch of salt. A lot of the 'evidence' and points made in that post are like reading tea leaves. To give one example:
> In March 2018, short interest spiked to a new all time high, to its current levels. This coincided with the Moody's downgrade, and sudden questions over liquidity. Just as Tesla's most important product is about to ramp.
Reality check: Tesla's target for mass production was December 2017. In March the deadline had been completely missed. In Q4 2017 they pushed the target to Q1 2018 and in march they pushed the target further back to Q2 2018.[1] They were producing around 1000 cars per week at that point. In March news was also coming in that Musk had just been granted an outrageous set of stock options that were going to be conditional on Market Cap - not production targets or profitability.[2] Not to mention the fact that at that point the plan for hitting the target had turned into a plan to build a tent city for car production, which doesn't seem likely to fill investors with confidence. You can say NOW that production was about to ramp up - but did this author buy in in March because he knew better than everyone else that production was about to successfully ramp?
So that's the context of the actual production capabilities of Tesla, and then the other context you need is that Tesla is burning through cash and has a load of debt (not helped by the huge debt that SolarCity bought in). This is a material risk, and in March Moody's downgraded Tesla - which increases the cost of their borrowing, which again is perfectly expected to reduce the value of the stock. Especially when you consider that they have over 1B in debt maturing in the next 12 months and that needs to be rolled over at a time it looked possible they STILL wouldn't be producing 5,000 cars a week.
This is one extremely charitable narrative about a set of facts that without the charged topic probably indicate a company with serious, but not insurmountable, problems.
[1]:https://www.barrons.com/articles/when-will-tesla-hit-its-elusive-model-3-production-target-1528409384 https://www.barrons.com/articles/when-will-tesla-hit-its-elu...
[2]:http://business-review.eu/news/elon-musk-set-to-receive-usd-2-6-bn-in-shares-from-tesla-if-milestones-are-met-162528 http://business-review.eu/news/elon-musk-set-to-receive-usd-...