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Tesla lost $38M in third quarter, stock tumbles over 12 percent
- DigitalSea 13y agoTesla is a startup and at present, I can name few "startups" on the scale of Tesla who aren't losing money. Look at the likes of Twitter, Spotify and Quora, large user bases and are technically making money but still not turning a profit. Tesla is no different and to be honest, has a good chance of succeeding. Elon Musk is one talented guy who has investors swooning over him to give him investment. Looks like the down-voting has begun, whatever. I won't let people on this site get in the way of voicing my own personal view and opinion on Tesla and their losses. Feel free to disagree.
- txttran 13y agoA post-IPO, $21B company is still a startup?
- DigitalSea 13y agoWhenever people question the definition of something being a startup I just point them to this wonderful Quora answer: http://www.quora.com/Entrepreneurship/What-is-the-proper-definition-of-a-startup/answer/Dave-McClure http://www.quora.com/Entrepreneurship/What-is-the-proper-def... Dave McClure makes a fair point that until a company works out the following three things, they're a startup, not a business. 1. What its product is, 2. Who its customers are. 3. How to make money. So yes, a post-IPO company valued at $21B which still hasn't worked out two of those three items is still a startup in my opinion...
- dman 13y agoApplying limits : as a large company unravels towards bankruptcy, it's business plans evaporating to ether it rapidly approaches the hallowed title of a startup. By the above metric sun was a startup post 2002, AMD is still a startup, Blackberry is a startup...
- dkokelley 13y agoThe auto industry works a little differently. Some of Tesla's competitors have been in business for over 100 years, making primarily the same product today. Tech companies today exist in industries that didn't exist even 15 years ago. Tesla Motors has only been around for 10 years (founded 2003), and their first product didn't sell until 5 years later. I think it's safe to say that Tesla Motors is still a startup. They are a startup in an industry that measures time in decades.
- lttlrck 13y agoThat's tenuous. The telecoms industry has been around as long so is Blackberry a startup?
- deleted 13y ago[deleted]
- jfoster 13y agoDepends on your definition of startup, doesn't it? Some people prefer a definition based on growth rate. Another definition that occurs to me is a company that could perhaps one day be massively profitable, but is currently losing money. To me, Tesla does seem to have IPOed unusually early. The "usual route" I have in mind is that tech companies typically acquire some very significant market share before their IPO. Tesla look like they're still getting started.
- revelation 13y agoTheir cash balance increased and gross margin is up to 21% from 14% last quarter on the Model S, with non-GAAP accounting. That's a fantastic number for a car manufacturer. Of course if you only care for the linkbait, feel free to go with the GAAP numbers and ignore underlying meaning.
- jayshahtx 13y agoTSLA prefers non GAAP because it collects all money for a lease upfront. Recognizing all revenue for a lease up front isn't logical.
- yannisp 13y agoIIRC it's actually financing with a balloon payment (with no risk since they're not the lenders), with an option for buyback. That liability of buying back should be somewhere in the books, either accrued or entered in full.
- deleted 13y ago[deleted]
- noonespecial 13y agoOr "Tesla spent $38 million on extended R&D involving extensively field testing its first production models". Take your pick.
- jonknee 13y agoMore accurately, for R&D they spent $48 million on a non-GAAP basis and $56 million on a GAAP basis. Non-GAAP wise Tesla made money in the quarter to the tune of $16M. Their new leasing program and paying back the Department of Energy loan early helped lower the GAAP revenue fairly substantially. Cash was even better--$26 million of positive free cash flow.
- hackula1 13y agoI would imagine that paying back their loans will be worth quite a bit in PR.
- jonknee 13y agoIn one version of accounting... In another they made $16M. What's clear is Tesla has been dramatically more successful at selling an electric car than any other company.
- nonchalance 13y agoThe problem is that the current stock price implies that they will be dramatically more successful than any other car company (electric or otherwise). It's all relative to expectations.
- wooster 13y agoSome market caps from Google Finance: TM, Toyota 203.72B VLKAY, Volkswagen AG 114.33B DDAIF, Daimler AG (USA) 85.52B HMC, Honda Motor Co 71.86B BAMXF, BMW 68.69B F, Ford Motor Company 67.33B GM, General Motors 51.52B NSANY, Nissan Motor 36.86B AUDVF, Audi 36.42B TSLA, Tesla Motors Inc 21.47B FIATY, Fiat 9.35B So, no, I don't think Tesla is quite at those levels of expectations yet. (As full disclosure, I own some Tesla stock.)
- codex 13y agoWhat complicates this analysis is the fact that these other companies sell in the millions--hundreds of times more cars than Tesla does in a year. Tesla's market cap is one million dollars per car to be sold in 2013.
- marvin 13y agoAnd of course, the part which you neglected to mention: None of these companies have growth prospects which are anywhere near those of Tesla. Added in the potential disruptive potential of an all-electric car future once battery technology gets only slightly better than it is today. I agree with you up to the point that this is a complicated analysis which can't really be done, but no further. This earnings call was really very positive, but the delivery was pretty lackluster.
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- 001sky 13y agohttp://www.nasdaq.com/symbol/tsla/after-hours http://www.nasdaq.com/symbol/tsla/after-hours Link has pricing if you want to follow along
- sprizzle 13y agoTesla's still a young company and is bound to have some quarters ending in losses for various reasons as they try to reach economies of scale. As an investor, I still feel confident that Elon Musk's "master plan" (see: http://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me http://www.teslamotors.com/blog/secret-tesla-motors-master-p...) for Tesla is starting to get underway with the latest developments on Model X (and I'm sure other models as well). The future is bright for Tesla, this loss isn't necessarily a sign of decline.
- nonchalance 13y agoThe future is bright for Tesla, but not necessarily for $TSLA (which is all the financial analysts really care about)
- ISL 13y agoThis distinction is so important, and so few people really grok it. Long-term, Tesla appears to have a future, but where the stock price will settle remains to be seen. Market capitalizations: Ford: $67B GM: $51B Toyota: $203B Honda: $71B Volkswagen: $114B Tesla: $19B (at ~$155)
- tokenadult 13y agoI read a financial newspaper report earlier today predicting good results for Tesla for its quarterly earnings report today, and thus a likely continued strong performance of Tesla stock. Seeing the headline of the article kindly submitted here prompted me to read the fine article, of course, and also to check for other news stories from later hours of today about Tesla. In approximate chronological order: "Tesla Motors stock slides despite delivering 5,500 cars in third quarter" http://www.mercurynews.com/business/ci_24460515/tesla-motors-stock-slides-after-hours-despite-delivering http://www.mercurynews.com/business/ci_24460515/tesla-motors... "Tesla Beats Expectations On Record Sales, Investors Decide To Sell Anyway" http://www.forbes.com/sites/markrogowsky/2013/11/05/live-tesla-beats-expectations-on-record-sales-investors-decide-to-sell-anyway/ http://www.forbes.com/sites/markrogowsky/2013/11/05/live-tes... "Tesla loses $38 million; adjusted results beat forecast" http://www.usatoday.com/story/money/cars/2013/11/05/tesla-earnings-quarter/3445745/ http://www.usatoday.com/story/money/cars/2013/11/05/tesla-ea... "Tesla outlook, deliveries fall short amid capacity constraints" http://www.reuters.com/article/2013/11/06/us-autos-tesla-idUSBRE9A415E20131106 http://www.reuters.com/article/2013/11/06/us-autos-tesla-idU... So a lot of investors saw news about the same earnings report, but some considered differing additional sources of information, or simply interpreted the same report differently. Different investors have differing investment goals, so it's not completely surprising that the same news can prompt some investors to sell while others hold and a few even buy. It will probably take a few more days to be sure what interpretation of Tesla's news is most persuasive to the largest number of investors. (Disclosure: I do not own stock in Tesla nor do I own stock in any other company. My son the hacker has an investment portfolio, but I have no idea what is in it.)
- eru 13y agoFor any sale there will be a buy and vice versa.
- tokenadult 13y agoFor any sale there will be a buy and vice versa. Well, yes, of course, and I think everyone here on Hacker News is aware of that. But the transaction may not occur at the price you desire. "The market can remain irrational longer than you can remain solvent" is still an important idea for investors to keep in mind.
- jusben1369 13y agoProduction in the quarter significantly exceeded deliveries in order to fill the pipeline of vehicles in transit to Europe and provide cars for service and marketing uses.” - I'm not sure but does that mean they built a boat load (pun intended!) more cars than they sold? That would impact costs vs revenues/sales.
- 001sky 13y agoThey note that the reason bulls are expecting deliveries of 6,000 or more vehicles is because of issued VINs, but they believe that many of the vehicles which have been produced were used for showrooms or loaner vehicles at Tesla’s service centers or are still in transit en route to delivery. People are really reading into things here. Expecting a company to beat guidance by 20% per quarter is alot to ask, but i suppose the type of momentum you need to bid on an already expensive stock. [They moved 5500 units on guidance of 5000].
- codex 13y agoThere's a worry Tesla is hiding softening sales. They had the capacity to produce 7150 cars this quarter but only sold 5550, a difference of 1650. Some of those cars are en route to Europe, but still, the number seems high. Talking about producing vehicles for internal use and marketing purposes, along with increased investment in new models and versions, can be interpreted as "our U.S. sales are softening unexpectedly." However, it does seem a stretch to draw those kinds of conclusions.
- marvin 13y agoMusk specifically covered this in the earnings call. They are production constrained and had to hold back deliveries in the US to ensure that people who made reservations in Europe two years ago would get their car.
- makomk 13y agoAccording to the summary I've seen[1] he said they were constrained by the available supply of batteries. Now, Musk spun this as a temporary setback, but one of the most widely-reported potential issues they have is that the number of batteries they need is huge. As in, if they expand much they'd require the entire current global production of 18650 cells[2] - and that's just to produce 40,000 cars a year! [1] http://www.forbes.com/sites/markrogowsky/2013/11/05/live-tesla-beats-expectations-on-record-sales-investors-decide-to-sell-anyway/ http://www.forbes.com/sites/markrogowsky/2013/11/05/live-tes... [2] http://jalopnik.com/tesla-could-use-up-all-the-worlds-laptop-batteries-1247047341 http://jalopnik.com/tesla-could-use-up-all-the-worlds-laptop...
- codex 13y agoI am very impressed with TSLA's 24% GAAP gross margin, and the relative lack of ZEV income. Great job, Tesla! Kudos.
- capkutay 13y agoThis was kind of a bad earnings quarter for many companies. Facebook and Apple both beat revenue targets, but some other data such as margins (for apple) and popularity with teens spooked investors. My guess is after 6 months of steady growth on tech stocks, many investors are exiting with their gains.
- notdrunkatall 13y agoGood, I hope the stock falls further so I can buy back in.
- caycep 13y agoA buying opportunity?
- cs702 13y agoTesla's stock price at present reflects and is driven primarily by the exuberant optimism of its shareholders, not by mundane financial details like how many millions the company lost or how many cars were sold last quarter. Consider that despite today's drop, the stock price has gone up 4.6x this year (from $33.87 at year-end 2012 to around $155 right now), but over the same period the company's quarterly revenues have increased only 1.4x (from $306 million in Q4 2012 to $431 million in Q3 2013).[1] The future of a young, highly innovative company like Tesla is so uncertain that shareholders have little choice but to rely primarily on speculation and emotion rather than on analysis of (limited) facts to estimate the present value of the business. -- PS. I'm a HUGE fan of the company and Elon Musk, and want them to succeed beyond their wildest dreams. -- [1] Quarterly financial results are posted on http://ir.teslamotors.com/events.cfm http://ir.teslamotors.com/events.cfm -- Edits: added third paragraph; grammar.
- rdl 13y agoThe scary thing for me with Tesla stock is primarily the risks in going to large scale mass market cars, as well as the risk of another car company, or another startup, emerging to win the mass market EV space.
- derekp7 13y agoIf another company came up with a dual-powered version of the Tesla, then I would definitely buy that. The current round of plugin hybrids don't offer enough battery-only range for me. I'd like to see about 100 mile battery only (in case I forget to plug it in), plus a small engine and 10-gallon tank. I wouldn't think the gas engine would have to be that large, especially if it were designed to use the battery as a buffer (i.e., it would only need to have enough HP to maintain highway speed, and acceleration could be handled by the battery). Which brings up a question -- how much horse power is needed just to keep a car cruising, without accounting for acceleration? Edit: just looked up on Wikipedia, the Model S gets 100 miles per 35kWh. So that works out to (assuming 65 mph) about 23 kilowatts average continuous output, or 30 HP. Considering that many car engines are 300 HP, I don't see a 30 HP engine being that extreme.
- jgalt212 13y agoThis is what happens when you promise the sun, moon, and stars and only deliver the sun and the moon.
- ontheinternets 13y agoThere is now less expectation of future profits than before.
- trungonnews 13y agoDoes anyone care that the $100k Tesla Model S doesn't come with safety features such as blind spot monitor, lane departure warning, forward collision detection? Subaru has them all for a third of the price!
- Tarang 13y agoIf you think about it, the largest typical object people would buy in terms of value is a car. A house can last a last time but less so a car. I think the reason for investor's optimism in Tesla is their vision is to get everyone a car. If you look at the design of the Model S it can allow for a very cheap & safe car (The Tata Nano had issues with safety at first). I would say this is still a baby as a company even now. If you saw GM's size before the financial crisis things would get more into perspective of what the potential is here. I think investors get that and this is why the premium is so high. This is a company that can outdo GM because of the different structure. Tesla is very robotic/automated in its manufacturing & the car's drive system is just the floor. When GM wasn't so much under attack as it is now it used to regularly get under the record annual profit for a publicly traded corporation. These crazy volatile drops are because there are lots of speculators trying to get in on the action (options, leverage.. etc). These volatile moves keep everything in balance.
- dingaling 13y ago> I think the reason for investor's optimism in Tesla is their vision is to get everyone a car. I suppose that's a vision, but not one that I see fitting-in with the general social and governmental direction for transportation, globally. Why would everyone want a car, even if the infrastructure could sustain that? We don't all have our own aeroplanes or boats, we lease time on them when we need to use those methods of transport.
- Tarang 13y agoElectric motors can make cars smaller. Infrastructure would have a rough time with petrol cars. A new car maker wouldn't make a difference to what would happen but if its electric I'd suppose there is a better chance. I'd imagine governments would end up pushing it particularly in more debt laden countries. Imagine two cars on sale, one electric and one fossil fuel powered, if you needed tax revenues where would you get tax revenue from next?
- forkrulassail 13y agoEven Musk said he reckons the price is overvalued about a month back.
- ck2 13y agoKeep dropping, I'd like to buy some.
- pyrrhotech 13y agoGood buying opportunity here
- stcredzero 13y agoPeople bellyache about taking 20 minutes for a half charge, completely trapped in their old thought patterns around cars and ignoring the actual use case: "Do you really want to know how long it takes to charge a Tesla Motors Model S most days? 20 seconds. That's how long it takes to plug the car in when you get home. The car is ready in the morning. It's just like your cell phone." http://arstechnica.com/business/2013/11/tesla-lost-38m-in-third-quarter-stock-tumbles-over-12-percent/?comments=1&post=25634191 http://arstechnica.com/business/2013/11/tesla-lost-38m-in-th...