Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

A buy-side analyst with over 15 years of experience investing in Asian markets and specializing in the mid-small cap space, emphasizing value investing in companies with good free cash flows/dividends and long-term holding horizons. 
Exempt Financial Adviser (EFA) under CrossASEAN Research Pte Ltd. It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity, Bottom-up Analyst

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Kelusa Asia Focus Funds

Red flags are rising by the day for Tesla.The last 3 months have seen several cringe-worthy incidents.To summarize a few incidents with timelines : 1. On May 7th, 2016 , Joshua Brown a famous Tesla user ( has several videos on youtube ) died in an accident. Tesla's autopilot software he was using failed to detect a trailer truck in the path of his model S.2.  May 18th, 2016.  The company completes a follow-on equity offering to raise 2 bn USD. In the prospectus, we learned Elon Musk would exercise vested options to purchase 5.5 million shares at 6.63$/share but would also sell half those shares.  The prospectus conveniently excluded the incident of May the 7th from the risk factors asking the investor to refer to the latest 10Q filing.  Incidents like these that could lead to potential investigations from the NHSTA generally should be cited as risks. What is also interesting to note is that there was no media coverage of this accident at the time. 3. May 25th, 2016. Musk completes his sale of shares 2.7 million @213 $/share for 585 million dollars.  4. June 21st,  2016. Tesla makes an all-stock offer for Solar City.  Solar City has 3 bn USD of debt and burns approximately 200-300 million USD of cash a quarter.  It was unsuccessful raising equity and although on the face of it Musk explains that there will be synergies between the two companies , given the promise of ramping deliveries  (up from 85k in FY16 ) to over 300k in FY17 for Tesla Motors (with Solar City burning cash the way it is)  the merger could be seen as extremely stressful for Tesla's balance sheet. Musk had bought 10 million USD worth of shares in Solar City in Feb 20165. June 29th, 2016. NHSTA advises the company that it is investigating Tesla's role in the Brown's fatality and subsequently, the company put out a notice to that effect. Media starts aggressively covering the incident. 6. July 3rd, 2016. Tesla releases its Q2 2016 delivery number it delivers 14,370 cars ( below guidance of 17,000 stated ) , they produced 18,345 vehicles and stated they have over 5000 cars in transit currently ( including those in the first quarter ) . A glance at their last few quarters will show a consistent trend of this differential with production exceeding sales which the company really needs to explain better. It also implies severe cash flow burn in Q2 standalone.  To the extent that there were 3500 cars in transit alone in Q2 and each car is a 100,000 USD , it implies some serious inventory build.

Red flags are rising by the day for Tesla.The last 3 months have seen several cringe-worthy incidents.To summarize a few incidents with timelines : 1. On May 7th, 2016 , Joshua Brown a famous Tesla user ( has several videos on youtube ) died in an accident. Tesla's autopilot software he was using failed to detect a trailer truck in the path of his model S.2.  May 18th, 2016.  The company completes a follow-on equity offering to raise 2 bn USD. In the prospectus, we learned Elon Musk would exercise vested options to purchase 5.5 million shares at 6.63$/share but would also sell half those shares.  The prospectus conveniently excluded the incident of May the 7th from the risk factors asking the investor to refer to the latest 10Q filing.  Incidents like these that could lead to potential investigations from the NHSTA generally should be cited as risks. What is also interesting to note is that there was no media coverage of this accident at the time. 3. May 25th, 2016. Musk completes his sale of shares 2.7 million @213 $/share for 585 million dollars.  4. June 21st,  2016. Tesla makes an all-stock offer for Solar City.  Solar City has 3 bn USD of debt and burns approximately 200-300 million USD of cash a quarter.  It was unsuccessful raising equity and although on the face of it Musk explains that there will be synergies between the two companies , given the promise of ramping deliveries  (up from 85k in FY16 ) to over 300k in FY17 for Tesla Motors (with Solar City burning cash the way it is)  the merger could be seen as extremely stressful for Tesla's balance sheet. Musk had bought 10 million USD worth of shares in Solar City in Feb 20165. June 29th, 2016. NHSTA advises the company that it is investigating Tesla's role in the Brown's fatality and subsequently, the company put out a notice to that effect. Media starts aggressively covering the incident. 6. July 3rd, 2016. Tesla releases its Q2 2016 delivery number it delivers 14,370 cars ( below guidance of 17,000 stated ) , they produced 18,345 vehicles and stated they have over 5000 cars in transit currently ( including those in the first quarter ) . A glance at their last few quarters will show a consistent trend of this differential with production exceeding sales which the company really needs to explain better. It also implies severe cash flow burn in Q2 standalone.  To the extent that there were 3500 cars in transit alone in Q2 and each car is a 100,000 USD , it implies some serious inventory build.  

Tesla

Tesla Red Flags Rising by the Day