The power of denial is an amazing thing. Yes, there is always plenty of debate possible about the value of a company — whether it should be higher or lower. But there isn’t debate about something else — history.
Today, Tesla and Ford both had their 3rd quarter 2018 financial calls. Upstart, diversified auto/energy company vs. established, focused auto company. Electric vehicles vs. fossil fuel vehicles. How does the competition look?
The big news from Tesla in Q3 2018 is that the company was profitable for only the fourth time in its history. That was enough to send its share price higher in after-hour trading, but there was more good news.
Longtime Tesla short firm Citron Research has totally flipped on Tesla [TSLA]. It has gotten straight from its position shorting the stock all the way on over to a comfortable long position in the stock, according to a report issued by the firm today. The longtime shorter of Tesla’s stock issued a multi-page report to justify its change of heart, citing numerous charts from CleanTechnica in support of the change — well, four charts out of the 18 we published on Sunday.
Recently, there was a misinformed article from Linette Lopez of Business Insider titled “Tesla needs over $1 billion in cash over the next 6 months, and Wall Street is going nuts figuring out where it’s going to come from.”
I am writing this piece to refute what was said.
In the last article I wrote on this topic (“Tesla Q3 Revenue, EPS, & Delivery Numbers: Estimates vs Reality”), I mentioned my overall delivery estimates along with my revenue and EPS for Q3 of 2018. I estimated Tesla would deliver 83,181 deliveries. I was decently close, 99.6% accurate, so I’ll give myself a goal on that.
One of the things that irks me about supposed Tesla critics is that many of them pretend to be idiots and pretend that everyone else is an idiot.
But it’s actually not just about Tesla — it’s EV critics and concern trolls in general.
When companies report earnings, the financial news mentions how the company’s revenue and earnings per Share (EPS) performed against professional estimates. If a company beats both, the stock price will usually go higher. And if they miss both, the stock price will go the opposite way, lower. If either misses, financial analysts will ask management questions on the conference call to get a better idea of how the underlying business is doing.
While this letter was being prepared for publication, Elon Musk released the news that he decided not to follow through on his idea of taking Tesla private. That news made the goal of this letter obsolete. But the arguments in it are as valid today as they were yesterday, making it still worthy of publication.
There has been intense focus in the media this year on Tesla’s financials and Tesla’s debt. The media coverage would make you think Tesla is one of the only companies in the world that takes on a large amount of debt. Not only is that obviously not true, but a certain James Stephenson took to Twitter yesterday to highlight in bubble chart format how dramatically unbalanced that narrative is when you compare Tesla’s debt to GM’s debt.
