Illuminati Investments

Long/short equity, value, special situations, contrarian
Illuminati Investments
Long/short equity, value, special situations, contrarian
Contributor since: 2012
Yeah, the "Cash Flow from Core Operations" makes no sense.
Not only is there the huge decrease in "Cash flows used in operating activities", more than all of it (117%) comes from "Change in collateralized lease borrowing", whatever that is, since there's only a single line reference to it in the 8K:
Can anyone explain how this actually generates cash that they can use towards their even more massive CapEx needs?
Good stuff, thanks for contributing.
Aligns with my anecdotal experience that there are already way too many MFRM stores to serve the existing population base in most places, yet they refuse to close any because this would hurt the revenue growth that they keep buying through acquisitions, which is the only thing keeping the stock supported.
Once they run out of runway like you note, margins and comps will come crashing down and I expect the stock to follow.
It is "a few quarters later", and there's no evidence that they're going to deliver on ANY of their 2015 promises, but if you want to believe them when they say the exact same things in 2016, go right ahead.
Whichever team Jeff Bezos buys/runs, because they're going to win 262* games this year.
The money to fund their operations is going to come from FCF (Fake Cash Flow), duh.
No need to raise money, the delivery overpromise certainly wasn't a last ditch effort to get the stock price up so they can issue more shares or convertible junk bonds yielding 1% that I'm sure are still in high demand in this environment.
"Model S gross margin tracking toward 30% by Q4 2016"
That's what they said last year, too:
"Our goal is to continue to improve Model S profitability and we believe we can achieve a 30% gross margin on Model S for Q4 of 2015"
And they were more like 20% this quarter, with all the discounting they probably did to (barely) hit their (lowered) annual delivery guidance.
Fool you once, shame on Elon, fool you twice, shame on you.
Just because they whiffed on every forecast last year, from deliveries to non-GAAP "profitability" to being cash flow positive by Q4, doesn't mean they won't whiff again this year on the exact same predictions, right? This time is different?
Don't the horrific margins kinda suggest that they lost as much money as necessary to stuff Q4 to meet (the low end of) their (reduced) guidance.
Forecast one year ago in the 8K:
"In 2015, we expect to deliver about 55,000 Model S and X vehicles, representing more than a 70% increase over 2014 deliveries."
Actual: 50,580, a shortfall of 8%
"Overall we expect to achieve a significantly higher level of non-GAAP profitability this year than the prior year"
"For full year 2014, our net income was $0.14 per share on a non-GAAP basis and a loss of $2.36 per share on a GAAP basis."
"For full year 2015, our net loss was $2.30 per share on a non-
GAAP basis and a loss of $6.93 per share on a GAAP basis"
Not to mention how they also said they'd be cash flow positive in Q4 of last year (actual was -$441M) and now they're saying the same thing this year:
"We expect to generate positive net cash flow and achieve non-GAAP profitability for the full-year 2016."
Fool us once, shame on Elon, get fooled twice, shame on you.
Doesn't mean they'll actually buy any back, they had $763M remaining under the previous repurchase program, yet they haven't bought any back since 2012.
And by the way, they've issued $4.7B in stock based comp since then, so don't expect the share count to go down anytime soon.
I agree with your assessment other than the fact that it's going to add $10B in market cap when Elon walks across water to unveil the Model 3 on March 31.
Yeah, I almost did say "always dubious" since they never seem to meet their forecasts and you had made so many other comments.
But I retract my comment, care to set the record straight as to what you actually forecast?
I'm still at 80K if anyone cares, since if we've learned anything from this latest quarter it seems like they'll lose whatever it takes to hit at least the bottom of their range.
Yeah, but they (hrk) don't need to raise any (hmpf) money because they're (krk) going to be cash flow positive (giggle) by the end of this year (hahaha).
Ah, almost made it through that company line with a straight face, of course that's what they said last year as well.
That's actually a good point. I mean, if they can miss earnings by 9900% and have the stock go up 15%, what would ever cause it to go down?
I mean, it might go up 9900% when Elon walks across water to unveil the Model 3 on March 31.
...and is now starting to reinflate on the dubious forecast that they will sell 80-90K cars this year.
These last four comments echo my sentiments, might as well just throw out all our old Ben Graham textbooks and put everything in the CANT (CRM, AMZN, NFLX, TSLA) miss (other than earnings) stocks.
Misses on everything again yet the shares are up 5% AH, this is like the Bizarro DIS.
Told ya. They reported a loss of 87 cents versus 10 cents earnings expected, missed on revenues, and the stock is up 5% because they said they're still going to deliver 80-90K cars this year...sure.
Why does SA always link to the wrong data for this?
Link above is for last November, here's the updated one:
Pretty sure that's part of her point, if he has to start selling shares then the whole thing could collapse because it would look like he's losing faith in the company, or at least not the financial genius everyone makes him out to be.
Right, so much focus on Star Wars and ESPN that I almost forgot they also have Marvel, although Deadpool is Fox.
I predict they're going to miss on everything except tweets/user, yet the shares are going to soar.
Amen, most analysts' PTs aren't worth their investment banks' underwriting sheets that they're practically written on, or at least for.
BTW, another good chance to short the pop today, caused by Berkshire Partners taking a larger stake.
Maybe people are confusing them with Berkshire Hathaway, but not sure what a PE firm is going to do with a company like MFRM that already has so much debt.
Good stuff, goes into the non-GAAP adjustments I mention in more detail.
I understand the business model but I'm still not sure it will work, given that the Model X was supposed to be the cash cow that paid for all the development they need to enter the mass market with the Model 3.
As I've mentioned in all my "ignorant" comments, I was actually thinking of buying into TSLA around $150 but got scared off by all the production problems they've been having with the Model X, so I guess we'll see if they're starting to get that straightened out when they report earnings.
Ha, talk about the pot calling the kettle black with your meaningless THEN: $5, NOW: $500 statements and calling out Einhorn's -20% performance last year when he averaged +20% for the previous 20 years.
Yep, good call.
Question remains whether the business can remain profitable, but if you back out the cash it's trading at only 15x one quarter's net income, certainly looks cheap.
Thanks, Slim, good to hear from you on something besides AMZN, where I'm sure we're both banging our heads against that crazy valuation too.
Bill Miller's LMOPX fund YTD: -28%
And you were banging on David Einhorn's performance last year...
Down 5% on a huge up day after reporting spectacular earnings. Guess this market cares more about ESPN revenue than overall earnings.
Just to show how absurd this is, if DIS would have taken the "extra" $300M they beat earnings estimates by and bought 5 million ESPN subscriptions themselves to boost Media Network revenue growth from "only" 8% to 13% and this segment's change in operating income from -6% to 15%, the market probably would have liked it more.
If the market's going to be that irrational, I want to be on the other side of the trade. Trying to buy more at $80, let's see if the market is crazy enough to drive it down to that level.
Agree with most of your points, but how can you say TWTR isn't scalable when they have 1/5 the users of FB?
Do they have to have the same amount of users to demonstrate that they're scalable and not a "niche" even though they only have 1/30 the market cap?