Tesla’s (NASDAQ:TSLA) M-3 Delayed, Cash Burns, Biggest Q Loss Ever
Tesla, a Waterfall of Misses
TSLA shares down nearly 6% and falling pre-market in NY, as the Quarterly loss was bigger than any analyst expected.
Tesla (NASDAQ:TSLA) posted a net loss of $619.4-M, or 3.70/share, for Q-3 ended 30 September compared with a profit of $21.9-M, or 0.14/share, a year earlier.
Revenue rose 30% to $2.98-B. Excluding items, the company lost 2.92/share.
Tesla warned that its adjusted gross margin would decline to about 15% due to a higher mix of lower-margin Model 3 deliveries in Q-4, but then recover in Q-1 of Y 2018.
Mr. Musk’s M-3 deliveries forecast not to be taken seriously.
Tesla Inc. again pushed its target for its Model 3 as production setbacks at its battery Gigafacatory contributed to record cash burning by hypemeister Elon Musk’s EV maker.
The company now hopes to make 5,000 of the cars per week by late in Q-1 of Y 2018, rather than by the end of Y 2017, Mr. Musk wrote in a letter to shareholders Wednesday.
The main constraint holding back output is on the assembly line that packages battery cells at Tesla’s gigafactory near Reno, Nevada he said.
Tesla shares dropped 4.1% to $307.80 as of 4:54 p.m. in New York, after the close of regular trading.
“While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear,” Mr. Musk and CFO Deepak Ahuja wrote in the shareholder letter.
The early setbacks lengthens the wait for hundreds of thousands of reservation holders and extends the payoff period for investors who want to start seeing returns from the billions the company has spent to expand, those orders can be cancelled on notice and the $1000 deposits due back on demand.
Tesla shares have surged for the year, they have begun to decline, since the EV maker said last month that unspecified bottlenecks led to significantly fewer Model 3s (about 220 Vs the 1500 goal) being produced in Q-3 than its forecast.
Mr. Musk burned $1.42-B of Tesla’s cash in Q-2,, surpassing the $1.16-B the company burnt in the prior Quarter.
Without another huge infusion of cash, Tesla may be required to file for protection under Chapter 11 of the Federal Bankruptcy Act.
Note: All rentier businesses fail, this time it is not different. And it does not matter the Boy Scout Musk is camping out on the roof of the building to oversea production…
The Big Q: Are the sharks circling yet?
I am calling the stock to 250, then 200, then 150, then 75.
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Bearish (-0.37)||Very Bearish (-0.52)||Neutral (-0.21)||Bearish (-0.39)|