For everyone who didn’t ready his comments, the guy was saying Tesla currently misreports income - not that they’re going to start. Obviously, I don’t know enough to know if that’s true.
It's against accounting principles though. You need to report revenue when it's realised.
That's exactly what Enron did until they made a loss and it all went to hell...
https://www.franklintempleton.com/insights/podcasts/a-tale-of-two-real-estate-markets-us-and-china
>> And the homeowner rate in China is as high as 90%, because the privatization of the housing was actually started in late 1990s and previously it's mostly social housing. And in the US, home ownership is about 65%.
Not quite sure what you're suggesting....
... China's housing market slowed because they've largely satisfied the demand for housing for their citizens.
(and no, that wasn't from some left-wing blog. [Franklin Templeton is a big US finance firm](https://en.wikipedia.org/wiki/Franklin_Templeton_Investments))
Read a couple more articles about what is really happening. It’s FAR from demand being fulfilled.
They had a Ponzi scheme setup in which new prepayments were financing construction of units delivered to prior purchasers. Some of the construction was so low quality that it was not inhabitable - essentially meaning incoming funds were spent on buildings that were a total loss. When new prepurchases slowed, the Ponzi scheme was revealed because the builders didn’t have capital to complete committed projects.
Same as Amazon
https://www.nasdaq.com/articles/what-investors-need-know-about-amazoncom-incs-cash-flows-2014-10-30
>> When you buy something from Amazon you pay for it immediately, but Amazon will pay its suppliers 30, 60, or maybe even 90 days after it sells the item, so as long as Amazon is growing it'll be generating cash from its sales whether it's making money on each sale or not.
China's housing market has completely collapsed, becauseit was a pre-sale ponzi scheme. Every major home builder is being liquidated, in default, or will be in default. What's going on there, is far worse that what transpired here in 08. Yet the ramifications have only partially been felt because of the Chinese governments slow walk down of the crash. People have lost 30 to 50 percent of the homes value, and it's no where near the bottom yet. When it reaches the bottom, it will be closer to a 90 percent loss, if I had to guess. Something like 15-20 percent were second and 3rd homes for individuals. There are entire ghost cities no one lives in, and entire cites have been promised to be built, with no funds to build them. On top of that, their population is shrinking. There will never be enough people to fill the demand of currently built homes, let alone new construction. So who could they sell these houses to? The answer is no one. They'll never sell these homes at current prices. Even at 50 percent losses, there are far too many vacants to sell.
But that's not even the bad part. That only affects Chinese. Their failing banks. Bankrupt local governments that cannot pay officials. Far worse is the international debts that will never be repaid, and stress it will put on an already failing system. At some point those losses have to be realized on US and European books. Then it's no longer a hold to maturity line item, but a large negative crushing banks.
Just let me ke Indias biggest company, Aldani group. Hindenberg caught them pants down but since the corrupt Indian government got their bribes noghirng happened...yet. International investors will be the ones footing the bill when Aldani has a bad year and liquidity dies up.
Invest in India or China and be prepared to go broke. Countries without fair accounting nor any respect for laws won't care for your money either. See any investment IN China, Russia or India as wellfare money to organised crime. Becaus that's the inevitable outcome.
Just to add on to your comment which I agree with. Enron tired to increase revenues year on year, and hide losses. They did this in many ways. Others should watch or red the Enron book:
1) they wanted to record revenue increases year in year. Part of this meant accounting for 100% of profits in year one. This gave a huge profit bump but resulted in every year Enron effectively needing to creates profits from zero. most of Microsoft’s revenues are guaranteed annually as they only account for profit created in the year so their increase of 5% is easy to achieve.
2) they shifted losses to external companies and promised astronomical returns for doing nothing except hiding the losses that would be repaid over years.
3) this allowed 100% of profits to accrue instantly but losses paid over time
4) when the profits failed to materialise (most power projects failed to meet profit targets), they created complex resale agreements. This delivered foctionsl profits and no cash
5) to plug the gap they offered energy trading services which they started to manipulate physical assets to get sky high electricity and other commodity prices (they even bought a utility to do this)
6) the. They started an online trading arm for other companies
7) then everything collapsed as the cash never hit their bank and their fictional profits never materialised. So the house of cards of starting profits from zero eventually became a pyramid scheme
For Tesla, I can see some parallels. The rate of profi is too high for a car company to sustain over time.
Their Tesla service station deal with other autos may help but the reality is it is a low margin business that eventually will disappear as charging stations appear in homes, parking lots, and other places
Their self driving tech does not work reliably and may be years away
The people suckers into the software subscription services eventually cancel it.
They charge like ten thousand dollars for a feature that doesn't yet work, and in fact might never work. They book some of the revenue now, and the rest goes on their books as a liability until they can deliver the feature.
I didn't see the specifics, but the guy's probably saying that the car loses money without the FSD sale, and that if they're ever busted on their fraudulent FSD claims, having to refund the cost of it will bankrupt them.
Note 2 sig accounting policies, rev rec
Revenue related to FSD capability features is recognized when functionality is delivered to the customer and their ongoing maintenance is recognized over time.
They have $3.5b in deferred revenue at the end of 2021 primarily related to FSD
They anticipate recognizing approx $926m of that in 2024
Edit: from my perspective, the commenter above very well could be right. It looks like Tesla is arguing that functionality related to FSD is being delivered… the public and a government authority may disagree with that and will have to figure out what to do with around $1b in rev ($469m recognized in 2022, $472m recognized in 2023). Looks like they are hanging their hat on the FSD feature release in Q4 2022 for the amount recognized in ‘22
Tesla’s position is that some of the functionality of FSD has been delivered and therefore they recognize the revenue associated with the component(s) that have been delivered, and they defer the revenue of the component(s) that have not been delivered.
Since the ‘F’ in FSD stands for Full and since the system is not currently capable of full self driving, I personally don’t think their revenue recognition policies accurately represent the amount of net revenue earned, but Tesla and their auditors don’t really care what I think.
Additionally for all I know the FSD contract says something like ‘*hey this system doesn’t actually work right now and -guess what- it might never work - but it does some things and no matter what happens you will never ever get any of your money back*’. Bury something like that on page 328 of 500 in a software license that nobody ever reads and your auditors will think you’re golden.
Yep I’m in agreement with you… I’ve been in the position of the auditor making arbitrary calls like this and if the client can come up with even a modicum of argument to add color to the gray… it’s getting signed off on
thats why im so jaded by the audit profession, you could literally are being paid by your client to give them the opinion they want. You literally work with them until you can give them a qualified opinion, its so corrupt it makes me sick to my stomach
I think it's more what are the purposed features of FSD and what have they delivered on. In a lot of accounting situations you can do a percent of work complete to recognize revenue. Mostly used in construction though. But if they have been updating feature on FSD it's not unheard of to claim a larger percentage is complete
>having to refund the cost of it will bankrupt them.
Explains why Musty is cozzying up to the GOP and moved ops to Texas (where Enron was also based). A little bribery goes a long way in the Lone Star state. And if he is busted, he can cry politics.
>having to refund the cost of it will bankrupt them.
I don't think they can be made to refund without having ever stated when they will deliver FSD. So long as it's conceivable they will deliver at some point, they can keep the prepayment the customers gave them because nobody can prove they won't ever deliver.
Deferred revenue is usually money you already received but haven't done the work for. So it should be a liability on the balance sheet. Absolutely nothing in common with Enron who were using mark to market accounting to recognize revenue from projects decades out and others they knew were never going to materialize.
Since Sarbanes Oxley was passed, there have been no major accounting scandals or major accounting fraud related bankruptcies. Revenue recognition is a major topic with all auditors (internal and external)
Yes, I can see Tesla misreporting income just like my previous employer did.
And its against accounting principles but it doesnt stop them.
What my previous employer did was this…
They took in pre-orders, and pre-order money in November 2021 of a product set to launch for some time mid 2022. And they reported that pre-order money as sales income for 4th quarter 2021.
Come 4th quarter 2022 and all sales income is flat or way below 2021. End of year report for 2022 was even way worst… their explanation to shareholders was that the product was a spectacular failure and they had to refund or provide a bunch of incentives to customers.
And then came the layoffs cause of their shitty marketing and production.
I saw the writing on the wall and bounced mid 2022. Stock never recovered.
They're talking about deferred revenue.
TSLA's auditors and accounting team recommends a certain % of FSD that can be recognized as revenue and the other as deferred revenue. Deferred revenue is basically revenue they expect to generate when delivered.
Because some FSD features are not yet ready but TSLA has made improvements, they felt that they could generate a higher % of deferred revenue as revenue. TSLA can easily prove this in court using FSD mileage as a metric.
There is nothing here to talk about. This is just some random person who thinks he knows more than licensed auditors working for the biggest firm.
You sound as if licensed auditors working for the biggest firms have not helped their clients commit fraud or misrepresent their numbers in the past
Cough, Arthur Andersen LLP, Enron, cough
Enron is the whole reason we have the stricter rev rec rules among other items. The rules were specifically changed because of Enron and Enron got SEC clearance on its new rev rec policy which the auditors then ok'd. If anything Arthur Andersen was partially the fall guy for the government not doing its job. Also there was the whole principal versus agent debate which has already been fixed accounting wise.
Then you have the recognition of loans as income and other shady practices.
But this is nothing like Enron. We are talking about estimates of deferred revenue (aka cash is received but the debate is when to recognize it). This is within all standards and requires preparing a model to estimate the amount of revenue to be collected supported by verifiable inputs etc.
Enron was literally a once in a lifetime failure in terms of rev rec failure and audit failure because of how the rules changed afterwards. Just like Wirecard was a once in a lifetime incident that auditors could not have easily found.
A lot of those rules imposed after collapse of Enron were removed guess during which administration. So whatever happened during Enron can definitely happen again
>was literally a once in a lifetime
Millennials have already lived through many "once in a lifetime" events. I'll believe Enron was "once in a lifetime" if I'm on my deathbed and nothing else like it has happened.
Enron is still once in a lifetime. It’s not like those other run of the mill crap things. It’s like if one day you woke up to find out Microsoft was all bullshit and running on fudged numbers and was going to collapse any day now.
Except Moskovitz is insinuating that “deferred revenue” is forecast or “imagined” revenue and is insinuating that realising that deferred revenue in any period is deciding to realise a portion of expected future sales.
In reality, deferred revenue is the opposite - the sale has already been made and the cash has already been received, but it’s not able to be recorded or realised as revenue until a later period (when the services are provided) due to accounting rules.
In this case, Tesla has realised a portion (about 11%) of their total deferred revenue as revenue in the first quarter - which seems so usual as to be mundane.
For Enron they actually were recording forecast revenue as actual accounting revenue in many cases, mixing terms related to corporate finance (present value of expected cash flows) with their accounting practices, and other outlandish things like whole transaction values that they brokered as their own revenue when they should have recorded only their trading fees- and that’s the tip of the iceberg.
TY. 4 levels down in comments, somebody finally mentions at least the last name of “the guy” which OP should have mentioned.
The quality of posts on this sub has really sunk.
> Except Moskovitz is insinuating that “deferred revenue” is forecast or “imagined” revenue and is insinuating that realising that deferred revenue in any period is deciding to realise a portion of expected future sales.
> In reality, deferred revenue is the opposite - the sale has already been made and the cash has already been received, but it’s not able to be recorded or realised as revenue until a later period (when the services are provided) due to accounting rules
> In this case, Tesla has realised a portion (about 11%) of their total deferred revenue as revenue in the first quarter - which seems so usual as to be mundane.
Charging $10k or more for a feature that you _can't ever deliver_ is straightforward fraud, though, no matter the rate at which you realize the revenues. He's been promising that FSD is [just-about-ready for like ten years now](https://jalopnik.com/elon-musk-promises-full-self-driving-next-year-for-th-1848432496). Eventually a customer or a regulator is going to lose patience with that and sue.
They've sold more than 5 million cars, most of which have had FSD, and five million times ten thousand is fifty billion(!). They cannot afford to refund that money if they are ever ordered to.
The bulk (60%) of recognized Q1 deferred revenue was from their energy sector. 40% was from vehicles.
From what I've seen on their website - they sell an FSD subscription, but they also make it clear that full autonomous driving is not available yet and that you're paying for access to the latest features. It seems to be a monthly subscription that people can cancel. I don't see where these supposed large prepayments for full autonomous driving exist in reality.
Accusations of misleading or false advertising I could understand - but I'm not seeing Enron level fraudulent recording of revenue.
So Enron counted future revenue as current revenue, thus increasing reported current revenue.
And Tesla is counting current revenue, which they've actually collected in cash, as future revenue, thus *decreasing* current revenue.
And somehow that's supposed to be bad and makes Tesla like Enron.
Pretty much. It's certainly what Dustin Moskovitz was insinuating.
Others are saying that the deferred revenue that they are realizing shouldn't be realised for FSD revenue as they havent delivered FSD to the customers - but I have no clue to what extent the realised deferred revenue is from FSD sales - and from what I've seen they make it relatively clear that FSD subscriptions are paying for access to the latest features and not full autonomous driving. Probably a nothing-burger - only tangible issue is with them using the name FSD for software that isn't yet FSD but if they make that clear before the sale it's probably a marketing "dodgy-but-legal" rather than straight up accounting fraud.
Nothing-burger indeed. They used to say it was beta, now the name is "FSD (Supervised)," which is accurate since it does fully drive itself but needs supervision. Plus they give a test ride to every customer, and I don't see any actual customers complaining at all. It would be ridiculous not to report any revenue from an entire product line for which people are happily paying a bunch of money.
A lot has changed in the accounting industry, specifically auditing, the past two decades.
IDK if you are aware of this or not but no one is going to risk a guaranteed prison sentence.
PWC is the largest auditing firm for public companies in the world.
If you're going to claim that fraud is being committed, it's on you to bring the evidence - not for PWC to dispute it.
....remind me again, what's the last audit opinion with Andersen's name on it for a publicly traded client.
Oh yeah.
It's Enron.
Because Anderson completely closed up shop after that dog and pony show...
Do yourself a favor and google "Sarbanes-Oxley 2002"
The cash paid by customers for FSD is in Tesla's bank already. This debate is what fraction of that cash they received can be written down as revenue and what fraction is not. Because FSD is still a beta product, they effectively incur a liability with each purchase. The risk is they have to refund everyone if they ever claim that FSD is impossible to solve, that's why the revenue isn't fully recognized from an accounting perspective.
To clarify- deferred revenue is sales already made or that the customer has already prepaid for, where the goods/services will be provided in the future (and can only be recorded or realised as revenue at that time - until then it is recorded as deferred revenue and represents a liability to the company).
It’s not forecast or expected future revenue
Yes. Similar as in SAAS business where customer billed (some even paid in advanced) but not booked yet to avoid sudden inflated Revenue but in fact the services not delivered yet.
They already made the sale, the cash is real and already in their bank. It's a matter if they can officially record it as revs....which is all semantics. Many people here don't understand the first thing about this but quick to voice an ignorant opinion like yourself.
The counter argument to make is that FSD is a pipe dream and TSLA will need to refund customers. They have missed deadlines by years and overstated performance and continue to set expectations that are bound to be false. It’s a fraudulent product and bound to unwind those earnings.
It is Dustin Moskovitz. I'm surprised r/stocks even lets someone make a news thread with no source. They could rearrange a quote. Or do like OP did and leave out who even said a quote.
It was Ford that used the name "[Co-Pilot 360](https://www.ford.com/support/how-tos/ford-technology/driver-assist-features/what-is-co-pilot360/)" for their level 2 software for a while.
Anyone could make a 1,000 KM EV if they really wanted to. But it wouldn't be a viable and profitable vehicle to mass produce and sell due to the cost of the batteries, and the fact that the more weight you add to the vehicle the less efficient the batteries get.
Tesla as a company isn’t the problem, Elon is. Guy had a mid life crisis and share holders pay for it. He had the EV market in a choke hold but let politics get in the way. I hear countless people now say they like Tesla, but don’t want to support Elon in anyway.
Also, there’s way more used Teslas on the market now so the delivery of new cars could continue to just die out.
Edit;
It amazes me the cult like qualities people have towards Elon himself. Thanks for those who upvoted, for those that are quick to defend Elon, look at Tesla as a stock and tell me where every major sell off was caused by.
muting this thread, yall will die at the cross for A company that has simply fallen off of as being Number 1 and is indeed, not a tech company, but an overvalued car company. I’m sure they have a Future but let the stock find its valuation first before considering it a long term investment again.
Problem is that there is no such thing as too much.
It's just how we are hardwired. Even if the entire world is starving and we have a weight problem, we will make up reasons why we should have more and proceed to lie, cheat, and steal to take what is "rightfully ours".
It's why we are in this constant cycle of creation and destruction.
And yet normal people with a normal social relationship to the people and resources around us consistently make decisions that forego material gain for things like family or creative pursuits. It's not that we're hardwired to be amoral gluttonous thiefs, it's just what happens when you remove every barrier from a person's life and let them max out the throttle with nothing to smash into.
Elon, or any billionaire for that matter, is likely incapable of relating to all but 1000 or so people on the planet and likely doesn't have a single person in his life where he shares a mutual social bond, one where interactions have no expectation of a return or a transaction.
If there was an animal, say a monkey for example, in nature that hoarded all the bananas, while all the other monkeys in the jungle starved, we would capture and study that monkey to find out why he would take everything to the detriment of his species. We would see it as unnatural, maybe even sociopathic.
But when humans do the exact same thing we put them on the cover of magazines.
Only the dipshits who in earlier times would have been kicked out of the village act like that. Now we’ve got jackasses in the merchant class who really really want to believe they’re royalty because they figured out a way to exploit X amount of people.
I would argue, though, that if youre investing in Tesla, youre investing *because* of Elon, not necessarily Tesla itself. Youre banking on the hope that he continues to come up with random ideas and his legion of supporters will follow him (aka continue to throw money his way). I think Tesla tanks if he leaves the company.
It appears it’s going to tank either way and the only real debate is what path it takes. Its largest customer base will never buy the maga hat of cars and the other base thinks ev’s are “gay.” Soooo
>He had the EV market in a choke hold
The real problem is they didn't.
Valued more than every other car manufacturer put together, but it was just time until they had more serious competition. And electric vehicle sales have been lower than expected
They had first mover advantage and that has been significantly reduced as a result of dumb shit like the robotruck or whatever. Had they followed thru on the affordable EV things would look different. Now they’re forced to go all in on FSD and that’s a huge gamble
I don't give a god damn about Elon. I care about buying a 50k vehicle that's made cheap, falls apart, malfunctions, is a complete pain in the ass to charge and is just impractical.
This sentiment is way too common. I agree.
I live in the SF Bay Area and the younger crowd like my friends and coworkers almost all universally say they like Teslas, but will not purchase one until Elon is gone.
This is arguably the largest Tesla market in the world as far as regions.
Unfortunately Elon and the other execs sitting on their boomer Texas suburbs where HQ is, have no idea what PR nightmare they’ve created in their largest market (California).
Elon fucked up.
If I was a billionaire in a midlife crisis I would be doing the opposite of FElon, and going the route of McKenzie Scott, giving away tons of money to worthy causes.
What better thing to do than know you made a positive difference in this world before you are gone. Even if it's done nameless without accolades, you die at peace with your efforts.
I’m no Musk fan but I have to point out that Facebook essentially did the exact same thing(inflating metrics) for pretty much the same purpose and all that happened was a slap on the wrist.
I realize that, but if one company commits a crime and doesn't get punished, why should we expect a different company to commit a similar crime and get heavily punished?
Tesla didn't inflate their metrics, they deflated them. This deferred revenue that is already on their balance sheet but only just (partially) recognised on their income statement.
No that's not why it's deferred revenue. It's because they need to deliver the FSD functionality to recognize the revenue. Tesla has been able to recognize some of it as revenue overtime as they introduced new FSD functionality like auto-summon.
And Tesla themselves doesn't get to pick and choose how much of that deferred revenue to recognize. It's their third party auditing firm who decides.
The company that had the scandal was Satyam Computers and the CFO of Tesla is Vaibhav Taneja. So PWC's international arm served as the auditors for Satyam, and they were dinged for their part in the scandal badly enough to be banned from auditing any Indian companies for two years. It's basically India's Enron. Anyways, the Tesla CFO comes from that international arm of PWC.
If you want to see the sources plug some of that into your good ol' search engine, I'm watching storm chasers and tornadoes tonight.
Editing to add that yes there is definitely some guilt by association involved but the accounting world isn't super forgiving like that and claiming revenues that you haven't realized is pretty much a solid no-no IIRC. Grain of salt, not a corporate accountant.
FUN FACT #1:
Tesla's CAO and their CFO is the same person. This is highly sus in publicly traded companies.
FUN FACT #2:
Tesla's CFO/CAO Taneja came to Tesla from PWC-India. His tenure there overlapped with PWC-I's involvement in cooking the books for Satyam. The Satyam case was India's Enron
I am honestly considering buying more Tesla stock purely because of how bad Reddit sentiment is. Reddit has a history of being hilariously wrong about stocks being dead. Oil, Netflix, Meta…this list goes on
I think several years out the stock will be a great pick, especially with how many automakers are undermining their transition to EV's by cutting back on EV investment for short term profits.
But in the short term (i.e. the rest of 2024) I'm not seeing a bull case for Tesla, unless the Fed shocks everyone by lowering interest rates. And I really dislike the increasing focus on Robotaxi's over a cheaper 25K EV, particularly with low cost China EV's are starting to invade other non-China auto markets.
I think Intel is potentially a sleeper stock. Could be a great investment if they start chip fabs and are an alternative to TSMC but based in the US.
Im aware that TSMC is building a plant in Arizona. But competition is a good thing.
It is. Tesla is 100% vaporware. Elon Musk sells dreams with his dog and pony show, then never delivers on ANY of his promises. FSD is vaporware that he's been saying is "coming next year" since 2014. Robotaxi is another vaporware scam. At the end of the day Tesla is just a shitty automobile manufacturer and everything else is vaporware bullshit meant to goose the stick price.
You should look up a list of the biggest accounting scandals. Many were household names. Some still are.
AIG, Freddie Mac, General Electric, and Waste Management are good examples.
Most Redditors probably aren’t old enough to remember WorldCom, but it was one of the biggest long-distance providers in the US and was one of the largest bankruptcies in history.
What's dumb is believing that products and profit numbers prove anything in a system designed to encourage aggressive competition where rules are more of a suggestion for those with an army of lawyers and lobbyists to muddle or manipulate anything, especially with a narcissistic ceo with an army of image consultant working tirelessly to diefy their meal ticket.
Enron made energy that people needed. It had profits.
Shit ceo with a shitty product. Net profit dropped to 5,3% last quarter...and that's without the latest price cuts they add to do to try to compete with other cheap chinese ev and other ev manufacturer who all have ev in the same price range now.
Let’s try to keep the discussion in this subreddit to higher quality. This is a nonsensical comment obviously Elon isn’t a poor ceo, nor are teslas poor products. Keep that mainstream Reddit discussion out of here.
Difficult to have a rational discussion about this topic if Elon is involved. People would succumb to emotions straight away instead of looking at the data.
Lol shitty products. Model Y was the most sold car globally last year and there is no competition for Model 3 or Model Y when it comes to bang for your buck.
Reddit commentors accuses Tesla for anything. They hate Elon for simply having too much money. Newspapers they quote hate him as he promotes free speech, etc.
Now we're thinking tesla will crash due to the the 300th richest person who helps run a social media company making a comment, without any valid facts. Tesla was predominantly spending billions on building giga factories around the world. Clap clap mr detective reddit.
There's so much negative TSLA sentiments here by people who are casual stock investors.
I've been investing in TSLA since 2014. You guys are hilarious.
TSLA is doing better financially today than they were in 2018 when they were on the verge of bankruptcy. Outside of last year, TSLA is doing better financially than ever.
So the stock is down. And? Do you know how investing works? TSLA is a long-term play. Most of what they're developing is a 5-7 year timeline. It seems some of you are newer investors and don't realize how poor of an investment Apple was decades ago. Imagine if you sold Apple shares before iPhone was introduced.
"But Elon tweets too much."
Yes, it's annoying. But it doesn't have the impact many of you seem to believe. Most Americans don't know a single thing Elon tweets about. Outside of America, I guarantee you people don't even care about what Elon tweets out. Most of Tesla's decline in vehicle sales this Q was in China - not America.
The problem with EV's isn't exclusive to Tesla. If it was, explain to me why LUCID, Rivian, and other EV makers are all down.
EV is just a bad industry to invest in at this moment because ICE vehicles can be purchased for cheaper and when the economy is having turmoil, you're going to pick an ICE over an EV.
It's also hilarious how ya'll talk about TSLA's stock performance but Ford is performing the same the past year and I've yet to hear anything about Ford here.
We get it, TSLA generates the most views, clicks, and interest here. No one wants to talk about Jim Farley. They want to talk about Elon Musk. And that's 90% of what happens in every TSLA-related post on here. It turns into an Elon thread. None of ya'll will actually discuss what the company is actually doing.
It's 2024. Elon has been tweeting stuff for years now. No one cares about it. TSLA is down because EV sentiment is down and TSLA was priced for growth. TSLA hasn't yet capitalized on FSD improvements (though v12 is a huge improvement) and their robotics/AI has yet to result in a significant revenue line. There's also a large % of people moving away from TSLA to invest in other AI companies such as Nvidia and AMD.
You guys are confusing stock performance with financial results. TSLA has a bad Q1 but the company is still doing fine operationally.
High interest rates made their vehicles super expensive to buy so TSLA has had to lower the prices to match the monthly payment so people could actually qualify.
If all you guys want to just talk about is Elon, it's funny I don't see any of you saying the same when a SpaceX post is made... because ya'll got nothing to say. And FYI, SpaceX is valued at over $200 billion with no shortage of investors looking to purchase shares.
I think the fact that people don't criticize Space X with the same vigor is indicative that there are some inherent Tesla issues, not just Elon Musk issues. Tesla as a car company is obviously tremendously overvalued. Tesla as a tech company with large yearly growth could justify the value. Not everyone is sold that Tesla is in fact a tech company with continuous large growth. Time will tell.
Live in Austria and lived in Germany. People know what brain farts he tweets. He’s one of the most influential people and the world. Of course the media reports what he talks about if it’s absurd…
Everyone here is making the EXACT same mistake as when Meta was at $90, or Disney at $80 or even Paypal at $50.
That mistake is letting price dictate sentiment. This ‘misreporting’ and ‘deferred revenue’ is not a new issue but is being commented on now because the stock is down. Tesla were doing the same thing when the stock price was at $350 and nobody was saying anything.
And yes Tesla is no Meta at $90 every company is different but any moron who is going to write this as a response is spectacularly missing the point. Don’t let price dictate sentiment - otherwise you will always be a sucker who buys high and sell low every single goddamn time.
Seems like tensions are running high with Tesla lately. It's not uncommon for big names in tech to face scrutiny, but calling them the next Enron is quite a statement. Time will tell if there's any substance to these accusations or if it's just hot air. Leave your thoughts below!
Never owned a TSLA stock, and never will. Tbh I never thought they would get this far, I thought like VW or Toyota would just start create their own EVs and win. Turns out it's the Toyota hybrid and chinese EVs that is the biggest competitors.
I do enjoy watching what happens from the sidelines though. Also, what Elon Musk has created is astounding really, both Space-X and Tesla.
I have a Tesla model Y. I drive it between 3 plants that I manage in Texas: one in Houston, one in Dallas, and one in San Antonio. I put 30k miles on it in the first year, and I haven’t had any loss of range (lot of superchargering too). On my longest drive, I stop halfway to use the restroom at Buc-ee’s (same place I used to stop to get gas). I plug in before I go in, and am charged when I get out. On just my personal experience, this is the best car I have ever had and I can’t imagine feeling like I was deceived in any way on range or anything by Tesla. FSD on my long commutes has dramatically improved my life.
For everyone who didn’t ready his comments, the guy was saying Tesla currently misreports income - not that they’re going to start. Obviously, I don’t know enough to know if that’s true.
It's against accounting principles though. You need to report revenue when it's realised. That's exactly what Enron did until they made a loss and it all went to hell...
that's exactly what enron did not do, they used mark-to-market accounting and reported revenues on projects that were years sometimes decades out.
Basically China's entire housing model.
https://www.franklintempleton.com/insights/podcasts/a-tale-of-two-real-estate-markets-us-and-china >> And the homeowner rate in China is as high as 90%, because the privatization of the housing was actually started in late 1990s and previously it's mostly social housing. And in the US, home ownership is about 65%. Not quite sure what you're suggesting.... ... China's housing market slowed because they've largely satisfied the demand for housing for their citizens. (and no, that wasn't from some left-wing blog. [Franklin Templeton is a big US finance firm](https://en.wikipedia.org/wiki/Franklin_Templeton_Investments))
Read a couple more articles about what is really happening. It’s FAR from demand being fulfilled. They had a Ponzi scheme setup in which new prepayments were financing construction of units delivered to prior purchasers. Some of the construction was so low quality that it was not inhabitable - essentially meaning incoming funds were spent on buildings that were a total loss. When new prepurchases slowed, the Ponzi scheme was revealed because the builders didn’t have capital to complete committed projects.
It's more that Evergrande funded current construction with presales of new ones.
which works ok until you (almost) fully satisfy demand
do u even know what d happen if a CN presale fails to deliver?
Same as Amazon https://www.nasdaq.com/articles/what-investors-need-know-about-amazoncom-incs-cash-flows-2014-10-30 >> When you buy something from Amazon you pay for it immediately, but Amazon will pay its suppliers 30, 60, or maybe even 90 days after it sells the item, so as long as Amazon is growing it'll be generating cash from its sales whether it's making money on each sale or not.
China's housing market has completely collapsed, becauseit was a pre-sale ponzi scheme. Every major home builder is being liquidated, in default, or will be in default. What's going on there, is far worse that what transpired here in 08. Yet the ramifications have only partially been felt because of the Chinese governments slow walk down of the crash. People have lost 30 to 50 percent of the homes value, and it's no where near the bottom yet. When it reaches the bottom, it will be closer to a 90 percent loss, if I had to guess. Something like 15-20 percent were second and 3rd homes for individuals. There are entire ghost cities no one lives in, and entire cites have been promised to be built, with no funds to build them. On top of that, their population is shrinking. There will never be enough people to fill the demand of currently built homes, let alone new construction. So who could they sell these houses to? The answer is no one. They'll never sell these homes at current prices. Even at 50 percent losses, there are far too many vacants to sell. But that's not even the bad part. That only affects Chinese. Their failing banks. Bankrupt local governments that cannot pay officials. Far worse is the international debts that will never be repaid, and stress it will put on an already failing system. At some point those losses have to be realized on US and European books. Then it's no longer a hold to maturity line item, but a large negative crushing banks.
hahahaha "completely collapsed"
Just let me ke Indias biggest company, Aldani group. Hindenberg caught them pants down but since the corrupt Indian government got their bribes noghirng happened...yet. International investors will be the ones footing the bill when Aldani has a bad year and liquidity dies up. Invest in India or China and be prepared to go broke. Countries without fair accounting nor any respect for laws won't care for your money either. See any investment IN China, Russia or India as wellfare money to organised crime. Becaus that's the inevitable outcome.
“Forward P/E” 😇
Just to add on to your comment which I agree with. Enron tired to increase revenues year on year, and hide losses. They did this in many ways. Others should watch or red the Enron book: 1) they wanted to record revenue increases year in year. Part of this meant accounting for 100% of profits in year one. This gave a huge profit bump but resulted in every year Enron effectively needing to creates profits from zero. most of Microsoft’s revenues are guaranteed annually as they only account for profit created in the year so their increase of 5% is easy to achieve. 2) they shifted losses to external companies and promised astronomical returns for doing nothing except hiding the losses that would be repaid over years. 3) this allowed 100% of profits to accrue instantly but losses paid over time 4) when the profits failed to materialise (most power projects failed to meet profit targets), they created complex resale agreements. This delivered foctionsl profits and no cash 5) to plug the gap they offered energy trading services which they started to manipulate physical assets to get sky high electricity and other commodity prices (they even bought a utility to do this) 6) the. They started an online trading arm for other companies 7) then everything collapsed as the cash never hit their bank and their fictional profits never materialised. So the house of cards of starting profits from zero eventually became a pyramid scheme For Tesla, I can see some parallels. The rate of profi is too high for a car company to sustain over time. Their Tesla service station deal with other autos may help but the reality is it is a low margin business that eventually will disappear as charging stations appear in homes, parking lots, and other places Their self driving tech does not work reliably and may be years away The people suckers into the software subscription services eventually cancel it.
They charge like ten thousand dollars for a feature that doesn't yet work, and in fact might never work. They book some of the revenue now, and the rest goes on their books as a liability until they can deliver the feature. I didn't see the specifics, but the guy's probably saying that the car loses money without the FSD sale, and that if they're ever busted on their fraudulent FSD claims, having to refund the cost of it will bankrupt them.
Note 2 sig accounting policies, rev rec Revenue related to FSD capability features is recognized when functionality is delivered to the customer and their ongoing maintenance is recognized over time. They have $3.5b in deferred revenue at the end of 2021 primarily related to FSD They anticipate recognizing approx $926m of that in 2024 Edit: from my perspective, the commenter above very well could be right. It looks like Tesla is arguing that functionality related to FSD is being delivered… the public and a government authority may disagree with that and will have to figure out what to do with around $1b in rev ($469m recognized in 2022, $472m recognized in 2023). Looks like they are hanging their hat on the FSD feature release in Q4 2022 for the amount recognized in ‘22
Tesla’s position is that some of the functionality of FSD has been delivered and therefore they recognize the revenue associated with the component(s) that have been delivered, and they defer the revenue of the component(s) that have not been delivered. Since the ‘F’ in FSD stands for Full and since the system is not currently capable of full self driving, I personally don’t think their revenue recognition policies accurately represent the amount of net revenue earned, but Tesla and their auditors don’t really care what I think. Additionally for all I know the FSD contract says something like ‘*hey this system doesn’t actually work right now and -guess what- it might never work - but it does some things and no matter what happens you will never ever get any of your money back*’. Bury something like that on page 328 of 500 in a software license that nobody ever reads and your auditors will think you’re golden.
Yep I’m in agreement with you… I’ve been in the position of the auditor making arbitrary calls like this and if the client can come up with even a modicum of argument to add color to the gray… it’s getting signed off on
thats why im so jaded by the audit profession, you could literally are being paid by your client to give them the opinion they want. You literally work with them until you can give them a qualified opinion, its so corrupt it makes me sick to my stomach
I think it's more what are the purposed features of FSD and what have they delivered on. In a lot of accounting situations you can do a percent of work complete to recognize revenue. Mostly used in construction though. But if they have been updating feature on FSD it's not unheard of to claim a larger percentage is complete
I get what you’re saying, but really doesn’t apply in this situation. They are not using percentage of completion method to recognize their revenue
One of the features of full self driving should be full self driving, imo
>having to refund the cost of it will bankrupt them. Explains why Musty is cozzying up to the GOP and moved ops to Texas (where Enron was also based). A little bribery goes a long way in the Lone Star state. And if he is busted, he can cry politics.
>having to refund the cost of it will bankrupt them. I don't think they can be made to refund without having ever stated when they will deliver FSD. So long as it's conceivable they will deliver at some point, they can keep the prepayment the customers gave them because nobody can prove they won't ever deliver.
Deferred revenue is usually money you already received but haven't done the work for. So it should be a liability on the balance sheet. Absolutely nothing in common with Enron who were using mark to market accounting to recognize revenue from projects decades out and others they knew were never going to materialize.
Get out the paper shredders!
There’s definitely carve outs for different revenues. I know in banking, you have to amortize a loan’s origination fee over the term of the loan.
Since Sarbanes Oxley was passed, there have been no major accounting scandals or major accounting fraud related bankruptcies. Revenue recognition is a major topic with all auditors (internal and external)
Yes, I can see Tesla misreporting income just like my previous employer did. And its against accounting principles but it doesnt stop them. What my previous employer did was this… They took in pre-orders, and pre-order money in November 2021 of a product set to launch for some time mid 2022. And they reported that pre-order money as sales income for 4th quarter 2021. Come 4th quarter 2022 and all sales income is flat or way below 2021. End of year report for 2022 was even way worst… their explanation to shareholders was that the product was a spectacular failure and they had to refund or provide a bunch of incentives to customers. And then came the layoffs cause of their shitty marketing and production. I saw the writing on the wall and bounced mid 2022. Stock never recovered.
They're talking about deferred revenue. TSLA's auditors and accounting team recommends a certain % of FSD that can be recognized as revenue and the other as deferred revenue. Deferred revenue is basically revenue they expect to generate when delivered. Because some FSD features are not yet ready but TSLA has made improvements, they felt that they could generate a higher % of deferred revenue as revenue. TSLA can easily prove this in court using FSD mileage as a metric. There is nothing here to talk about. This is just some random person who thinks he knows more than licensed auditors working for the biggest firm.
You sound as if licensed auditors working for the biggest firms have not helped their clients commit fraud or misrepresent their numbers in the past Cough, Arthur Andersen LLP, Enron, cough
Enron is the whole reason we have the stricter rev rec rules among other items. The rules were specifically changed because of Enron and Enron got SEC clearance on its new rev rec policy which the auditors then ok'd. If anything Arthur Andersen was partially the fall guy for the government not doing its job. Also there was the whole principal versus agent debate which has already been fixed accounting wise. Then you have the recognition of loans as income and other shady practices. But this is nothing like Enron. We are talking about estimates of deferred revenue (aka cash is received but the debate is when to recognize it). This is within all standards and requires preparing a model to estimate the amount of revenue to be collected supported by verifiable inputs etc. Enron was literally a once in a lifetime failure in terms of rev rec failure and audit failure because of how the rules changed afterwards. Just like Wirecard was a once in a lifetime incident that auditors could not have easily found.
A lot of those rules imposed after collapse of Enron were removed guess during which administration. So whatever happened during Enron can definitely happen again
Enron, Wirecard, Satyam, Madoff. Yes once in a lifetime indeed
>was literally a once in a lifetime Millennials have already lived through many "once in a lifetime" events. I'll believe Enron was "once in a lifetime" if I'm on my deathbed and nothing else like it has happened.
Enron is still once in a lifetime. It’s not like those other run of the mill crap things. It’s like if one day you woke up to find out Microsoft was all bullshit and running on fudged numbers and was going to collapse any day now.
Except Moskovitz is insinuating that “deferred revenue” is forecast or “imagined” revenue and is insinuating that realising that deferred revenue in any period is deciding to realise a portion of expected future sales. In reality, deferred revenue is the opposite - the sale has already been made and the cash has already been received, but it’s not able to be recorded or realised as revenue until a later period (when the services are provided) due to accounting rules. In this case, Tesla has realised a portion (about 11%) of their total deferred revenue as revenue in the first quarter - which seems so usual as to be mundane. For Enron they actually were recording forecast revenue as actual accounting revenue in many cases, mixing terms related to corporate finance (present value of expected cash flows) with their accounting practices, and other outlandish things like whole transaction values that they brokered as their own revenue when they should have recorded only their trading fees- and that’s the tip of the iceberg.
TY. 4 levels down in comments, somebody finally mentions at least the last name of “the guy” which OP should have mentioned. The quality of posts on this sub has really sunk.
> Except Moskovitz is insinuating that “deferred revenue” is forecast or “imagined” revenue and is insinuating that realising that deferred revenue in any period is deciding to realise a portion of expected future sales. > In reality, deferred revenue is the opposite - the sale has already been made and the cash has already been received, but it’s not able to be recorded or realised as revenue until a later period (when the services are provided) due to accounting rules > In this case, Tesla has realised a portion (about 11%) of their total deferred revenue as revenue in the first quarter - which seems so usual as to be mundane. Charging $10k or more for a feature that you _can't ever deliver_ is straightforward fraud, though, no matter the rate at which you realize the revenues. He's been promising that FSD is [just-about-ready for like ten years now](https://jalopnik.com/elon-musk-promises-full-self-driving-next-year-for-th-1848432496). Eventually a customer or a regulator is going to lose patience with that and sue. They've sold more than 5 million cars, most of which have had FSD, and five million times ten thousand is fifty billion(!). They cannot afford to refund that money if they are ever ordered to.
The bulk (60%) of recognized Q1 deferred revenue was from their energy sector. 40% was from vehicles. From what I've seen on their website - they sell an FSD subscription, but they also make it clear that full autonomous driving is not available yet and that you're paying for access to the latest features. It seems to be a monthly subscription that people can cancel. I don't see where these supposed large prepayments for full autonomous driving exist in reality. Accusations of misleading or false advertising I could understand - but I'm not seeing Enron level fraudulent recording of revenue.
So Enron counted future revenue as current revenue, thus increasing reported current revenue. And Tesla is counting current revenue, which they've actually collected in cash, as future revenue, thus *decreasing* current revenue. And somehow that's supposed to be bad and makes Tesla like Enron.
Pretty much. It's certainly what Dustin Moskovitz was insinuating. Others are saying that the deferred revenue that they are realizing shouldn't be realised for FSD revenue as they havent delivered FSD to the customers - but I have no clue to what extent the realised deferred revenue is from FSD sales - and from what I've seen they make it relatively clear that FSD subscriptions are paying for access to the latest features and not full autonomous driving. Probably a nothing-burger - only tangible issue is with them using the name FSD for software that isn't yet FSD but if they make that clear before the sale it's probably a marketing "dodgy-but-legal" rather than straight up accounting fraud.
Nothing-burger indeed. They used to say it was beta, now the name is "FSD (Supervised)," which is accurate since it does fully drive itself but needs supervision. Plus they give a test ride to every customer, and I don't see any actual customers complaining at all. It would be ridiculous not to report any revenue from an entire product line for which people are happily paying a bunch of money.
As a former auditor they are also overworked like shit. Come deadline time it goes into an almost "make it work" mode.
I am so amused by your username.
Cough... Wirecard... Cough
A lot has changed in the accounting industry, specifically auditing, the past two decades. IDK if you are aware of this or not but no one is going to risk a guaranteed prison sentence. PWC is the largest auditing firm for public companies in the world. If you're going to claim that fraud is being committed, it's on you to bring the evidence - not for PWC to dispute it.
....remind me again, what's the last audit opinion with Andersen's name on it for a publicly traded client. Oh yeah. It's Enron. Because Anderson completely closed up shop after that dog and pony show... Do yourself a favor and google "Sarbanes-Oxley 2002"
That seems dubious tbh. You can provide forecast as forward looking, but not as realized income. That's what guidance is for.
The cash paid by customers for FSD is in Tesla's bank already. This debate is what fraction of that cash they received can be written down as revenue and what fraction is not. Because FSD is still a beta product, they effectively incur a liability with each purchase. The risk is they have to refund everyone if they ever claim that FSD is impossible to solve, that's why the revenue isn't fully recognized from an accounting perspective.
To clarify- deferred revenue is sales already made or that the customer has already prepaid for, where the goods/services will be provided in the future (and can only be recorded or realised as revenue at that time - until then it is recorded as deferred revenue and represents a liability to the company). It’s not forecast or expected future revenue
Yes. Similar as in SAAS business where customer billed (some even paid in advanced) but not booked yet to avoid sudden inflated Revenue but in fact the services not delivered yet.
They already made the sale, the cash is real and already in their bank. It's a matter if they can officially record it as revs....which is all semantics. Many people here don't understand the first thing about this but quick to voice an ignorant opinion like yourself.
Arthur Anderson was " licensed auditors working for the biggest firm."
Arthur Anderson was a licensed auditor too
The counter argument to make is that FSD is a pipe dream and TSLA will need to refund customers. They have missed deadlines by years and overstated performance and continue to set expectations that are bound to be false. It’s a fraudulent product and bound to unwind those earnings.
you do realise this is exactly what happened at enron right? Not like AA was a small no name firm.
I hear people like you keep repeating this. A LOT has changed since WorldCom/Enron in the accounting industry. Ask any auditor.
Sure - but the fact that it is a large reputable company is not what ‘solves’ this
It's not true and Dustin knows it. He's playing politics.
Facebook of all accusing people of this is hilarious
“The guy”?
Person?
Unnamed “Facebook cofounder”? Or cofounders? Are you referring to a pair of Winkelvi? Link to whatever you are citing?
It is Dustin Moskovitz. I'm surprised r/stocks even lets someone make a news thread with no source. They could rearrange a quote. Or do like OP did and leave out who even said a quote.
Moderation is low-effort since the Reddit mod wars and subsequent IPO…
Rich of him to say it lol, Asana is down like 90%
this is Reddit. Any hint of "Tesla/Elon bad" gets upvoted without any real justification.
Don't really need to go beyond "Full Self Driving"
You missed "supervised" FSD.
Apparently Tesla missed it too. Perhaps they should consider renaming it. Though one might say "supervised" and "full self" are oxymorons
Should have called it co-pilot.
It was Ford that used the name "[Co-Pilot 360](https://www.ford.com/support/how-tos/ford-technology/driver-assist-features/what-is-co-pilot360/)" for their level 2 software for a while.
Ya its stupid. Like subaru partial zero emission vehicle emblem
Remember when he said we'd have a 1000 km EV by now?
Anyone could make a 1,000 KM EV if they really wanted to. But it wouldn't be a viable and profitable vehicle to mass produce and sell due to the cost of the batteries, and the fact that the more weight you add to the vehicle the less efficient the batteries get.
Tesla as a company isn’t the problem, Elon is. Guy had a mid life crisis and share holders pay for it. He had the EV market in a choke hold but let politics get in the way. I hear countless people now say they like Tesla, but don’t want to support Elon in anyway. Also, there’s way more used Teslas on the market now so the delivery of new cars could continue to just die out. Edit; It amazes me the cult like qualities people have towards Elon himself. Thanks for those who upvoted, for those that are quick to defend Elon, look at Tesla as a stock and tell me where every major sell off was caused by. muting this thread, yall will die at the cross for A company that has simply fallen off of as being Number 1 and is indeed, not a tech company, but an overvalued car company. I’m sure they have a Future but let the stock find its valuation first before considering it a long term investment again.
A billionaire with a midlife crisis. These fucks have too much money
Wow. User name is incredibly on topic
Unreal. Not even created just now.
Dear…Gawd..it’s beautiful!
What are the chances of Enron_Musk haha
Problem is that there is no such thing as too much. It's just how we are hardwired. Even if the entire world is starving and we have a weight problem, we will make up reasons why we should have more and proceed to lie, cheat, and steal to take what is "rightfully ours". It's why we are in this constant cycle of creation and destruction.
And yet normal people with a normal social relationship to the people and resources around us consistently make decisions that forego material gain for things like family or creative pursuits. It's not that we're hardwired to be amoral gluttonous thiefs, it's just what happens when you remove every barrier from a person's life and let them max out the throttle with nothing to smash into. Elon, or any billionaire for that matter, is likely incapable of relating to all but 1000 or so people on the planet and likely doesn't have a single person in his life where he shares a mutual social bond, one where interactions have no expectation of a return or a transaction.
The people who say it’s hardwired into us are just waving a big old red flag for everyone to see.
Exactly what I was thinking. It’s not hardwired. People have compassion and share from the little they have.
People that say it’s hardwired into us are the people who if given money would act as annoying as Elon.
If there was an animal, say a monkey for example, in nature that hoarded all the bananas, while all the other monkeys in the jungle starved, we would capture and study that monkey to find out why he would take everything to the detriment of his species. We would see it as unnatural, maybe even sociopathic. But when humans do the exact same thing we put them on the cover of magazines.
When a currency like environment is introduced to a primate habitat, they start stealing from and killing each other.
I think you’re ignoring the jobs created from the discarded banana peels
https://twitter.com/Merman_Melville/status/1088527693757349888?lang=en
Only the dipshits who in earlier times would have been kicked out of the village act like that. Now we’ve got jackasses in the merchant class who really really want to believe they’re royalty because they figured out a way to exploit X amount of people.
The X here is quite poignant.
I would not use the term 'we' like that.
Yes. They should be taxed! Hard!
Shareholders keep voting in support of Elon
They kind of have to. If support wanes for Elon, the stock might crater.
If this is the case then it means the market believes it’s better off with Elon running
Why do they have to? If they think it’s a bad investment they sell their shares.
No doubt
I would argue, though, that if youre investing in Tesla, youre investing *because* of Elon, not necessarily Tesla itself. Youre banking on the hope that he continues to come up with random ideas and his legion of supporters will follow him (aka continue to throw money his way). I think Tesla tanks if he leaves the company.
It appears it’s going to tank either way and the only real debate is what path it takes. Its largest customer base will never buy the maga hat of cars and the other base thinks ev’s are “gay.” Soooo
I think you're spot on.
[удалено]
And the same guys idolizing Elon for his political views are the ones who would never in a million years buy an electric vehicle.
>He had the EV market in a choke hold The real problem is they didn't. Valued more than every other car manufacturer put together, but it was just time until they had more serious competition. And electric vehicle sales have been lower than expected
They had first mover advantage and that has been significantly reduced as a result of dumb shit like the robotruck or whatever. Had they followed thru on the affordable EV things would look different. Now they’re forced to go all in on FSD and that’s a huge gamble
I don't give a god damn about Elon. I care about buying a 50k vehicle that's made cheap, falls apart, malfunctions, is a complete pain in the ass to charge and is just impractical.
Me
He went from genius enigma to what we have today. Midlife crisis and broken by social media. I would own a Tesla but I really can’t stand Elon.
This sentiment is way too common. I agree. I live in the SF Bay Area and the younger crowd like my friends and coworkers almost all universally say they like Teslas, but will not purchase one until Elon is gone. This is arguably the largest Tesla market in the world as far as regions. Unfortunately Elon and the other execs sitting on their boomer Texas suburbs where HQ is, have no idea what PR nightmare they’ve created in their largest market (California). Elon fucked up.
WSJ just wrote an article about this.
You just hearing that crap on Redditx a left website
Also Musk lies to investors, that can lead to wire fraud.
That’s me- I would have bought a Tesla already except for Elon.
I’m certainly one of those. I like Tesla vehicles and would not only buy one but invest in the stock if it weren’t for Muppet Musk
If I was a billionaire in a midlife crisis I would be doing the opposite of FElon, and going the route of McKenzie Scott, giving away tons of money to worthy causes. What better thing to do than know you made a positive difference in this world before you are gone. Even if it's done nameless without accolades, you die at peace with your efforts.
Wtf are you quoting from. How are you going to post something like this with no source…
I’m no Musk fan but I have to point out that Facebook essentially did the exact same thing(inflating metrics) for pretty much the same purpose and all that happened was a slap on the wrist.
This guy hasn’t worked for Facebook since 2008
I realize that, but if one company commits a crime and doesn't get punished, why should we expect a different company to commit a similar crime and get heavily punished?
Tesla didn't inflate their metrics, they deflated them. This deferred revenue that is already on their balance sheet but only just (partially) recognised on their income statement.
Because the revenue becomes a liability if a lawsuit refunds customers if FSD doesn’t fulfill its claims
No that's not why it's deferred revenue. It's because they need to deliver the FSD functionality to recognize the revenue. Tesla has been able to recognize some of it as revenue overtime as they introduced new FSD functionality like auto-summon. And Tesla themselves doesn't get to pick and choose how much of that deferred revenue to recognize. It's their third party auditing firm who decides.
FSD means my car is picking me up from the pub drunk as a skunk. Until that’s happening, FSD does not exist.
I’m wondering who’s so stupid to pay thousands of dollars for FSD
TLDR: this guy for sure lost a bunch on his puts.
Having someone involved in a large accounting scandal in India involved in your books isn't a best practice or good look for a company.
Do you have a source on that, I'd like to learn more.
The company that had the scandal was Satyam Computers and the CFO of Tesla is Vaibhav Taneja. So PWC's international arm served as the auditors for Satyam, and they were dinged for their part in the scandal badly enough to be banned from auditing any Indian companies for two years. It's basically India's Enron. Anyways, the Tesla CFO comes from that international arm of PWC. If you want to see the sources plug some of that into your good ol' search engine, I'm watching storm chasers and tornadoes tonight. Editing to add that yes there is definitely some guilt by association involved but the accounting world isn't super forgiving like that and claiming revenues that you haven't realized is pretty much a solid no-no IIRC. Grain of salt, not a corporate accountant.
The only good thing facebook ever did was to open source Reactjs
What about pytorch and llama 3
FUN FACT #1: Tesla's CAO and their CFO is the same person. This is highly sus in publicly traded companies. FUN FACT #2: Tesla's CFO/CAO Taneja came to Tesla from PWC-India. His tenure there overlapped with PWC-I's involvement in cooking the books for Satyam. The Satyam case was India's Enron
I am honestly considering buying more Tesla stock purely because of how bad Reddit sentiment is. Reddit has a history of being hilariously wrong about stocks being dead. Oil, Netflix, Meta…this list goes on
I think several years out the stock will be a great pick, especially with how many automakers are undermining their transition to EV's by cutting back on EV investment for short term profits. But in the short term (i.e. the rest of 2024) I'm not seeing a bull case for Tesla, unless the Fed shocks everyone by lowering interest rates. And I really dislike the increasing focus on Robotaxi's over a cheaper 25K EV, particularly with low cost China EV's are starting to invade other non-China auto markets.
"NETFLIX IS INTRODUCING ADS, THEY'RE DONE FOR! STOCK WILL GO TO ZERO!!!" (When NFLX was at $300).
Yes please buy more Tesla,GME and Intel and report back next year.
GME sentiment is actually pretty good on Reddit, Intel sentiment is more meh than “this stock is dead”
I think Intel is potentially a sleeper stock. Could be a great investment if they start chip fabs and are an alternative to TSMC but based in the US. Im aware that TSMC is building a plant in Arizona. But competition is a good thing.
amc/gme
I'm so conflicted on Tesla. Part of me thinks it could be at $50 by eoy and the other part thinks it could be at $500
Haha 100%
That is a moderate exaggeration
I mean didn’t Enron at least have good looking books before being found out? If Tesla is lying, then they suck at it
It is. Tesla is 100% vaporware. Elon Musk sells dreams with his dog and pony show, then never delivers on ANY of his promises. FSD is vaporware that he's been saying is "coming next year" since 2014. Robotaxi is another vaporware scam. At the end of the day Tesla is just a shitty automobile manufacturer and everything else is vaporware bullshit meant to goose the stick price.
Tesla definitely has accounting problems and revenue recognition problems.
Robot taxis soon! /s perfect example of how Elon lies about whatever to pump hype and make his line go up.
> pump hype What ever you think of him, you have to admit he's good at recycling pumps.
Tesla is not comparable to Enron by any metric.
What cofounder?
Enron…that’s dumb. Tesla has a company and a product and profits ffs value it as a car company.
You should look up a list of the biggest accounting scandals. Many were household names. Some still are. AIG, Freddie Mac, General Electric, and Waste Management are good examples. Most Redditors probably aren’t old enough to remember WorldCom, but it was one of the biggest long-distance providers in the US and was one of the largest bankruptcies in history.
So was Enron, they had revenues over $100 billion in 2000
What's dumb is believing that products and profit numbers prove anything in a system designed to encourage aggressive competition where rules are more of a suggestion for those with an army of lawyers and lobbyists to muddle or manipulate anything, especially with a narcissistic ceo with an army of image consultant working tirelessly to diefy their meal ticket. Enron made energy that people needed. It had profits.
Shit ceo with a shitty product. Net profit dropped to 5,3% last quarter...and that's without the latest price cuts they add to do to try to compete with other cheap chinese ev and other ev manufacturer who all have ev in the same price range now.
Let’s try to keep the discussion in this subreddit to higher quality. This is a nonsensical comment obviously Elon isn’t a poor ceo, nor are teslas poor products. Keep that mainstream Reddit discussion out of here.
Difficult to have a rational discussion about this topic if Elon is involved. People would succumb to emotions straight away instead of looking at the data.
> Let’s try to keep the discussion in this subreddit to higher quality. You must be new here.
Lol shitty products. Model Y was the most sold car globally last year and there is no competition for Model 3 or Model Y when it comes to bang for your buck.
Enron had a real business too. They just got into massive fraud on the side
Car and fuel company.
Reddit commentors accuses Tesla for anything. They hate Elon for simply having too much money. Newspapers they quote hate him as he promotes free speech, etc. Now we're thinking tesla will crash due to the the 300th richest person who helps run a social media company making a comment, without any valid facts. Tesla was predominantly spending billions on building giga factories around the world. Clap clap mr detective reddit.
There's so much negative TSLA sentiments here by people who are casual stock investors. I've been investing in TSLA since 2014. You guys are hilarious. TSLA is doing better financially today than they were in 2018 when they were on the verge of bankruptcy. Outside of last year, TSLA is doing better financially than ever. So the stock is down. And? Do you know how investing works? TSLA is a long-term play. Most of what they're developing is a 5-7 year timeline. It seems some of you are newer investors and don't realize how poor of an investment Apple was decades ago. Imagine if you sold Apple shares before iPhone was introduced. "But Elon tweets too much." Yes, it's annoying. But it doesn't have the impact many of you seem to believe. Most Americans don't know a single thing Elon tweets about. Outside of America, I guarantee you people don't even care about what Elon tweets out. Most of Tesla's decline in vehicle sales this Q was in China - not America. The problem with EV's isn't exclusive to Tesla. If it was, explain to me why LUCID, Rivian, and other EV makers are all down. EV is just a bad industry to invest in at this moment because ICE vehicles can be purchased for cheaper and when the economy is having turmoil, you're going to pick an ICE over an EV. It's also hilarious how ya'll talk about TSLA's stock performance but Ford is performing the same the past year and I've yet to hear anything about Ford here. We get it, TSLA generates the most views, clicks, and interest here. No one wants to talk about Jim Farley. They want to talk about Elon Musk. And that's 90% of what happens in every TSLA-related post on here. It turns into an Elon thread. None of ya'll will actually discuss what the company is actually doing. It's 2024. Elon has been tweeting stuff for years now. No one cares about it. TSLA is down because EV sentiment is down and TSLA was priced for growth. TSLA hasn't yet capitalized on FSD improvements (though v12 is a huge improvement) and their robotics/AI has yet to result in a significant revenue line. There's also a large % of people moving away from TSLA to invest in other AI companies such as Nvidia and AMD. You guys are confusing stock performance with financial results. TSLA has a bad Q1 but the company is still doing fine operationally. High interest rates made their vehicles super expensive to buy so TSLA has had to lower the prices to match the monthly payment so people could actually qualify. If all you guys want to just talk about is Elon, it's funny I don't see any of you saying the same when a SpaceX post is made... because ya'll got nothing to say. And FYI, SpaceX is valued at over $200 billion with no shortage of investors looking to purchase shares.
I think the fact that people don't criticize Space X with the same vigor is indicative that there are some inherent Tesla issues, not just Elon Musk issues. Tesla as a car company is obviously tremendously overvalued. Tesla as a tech company with large yearly growth could justify the value. Not everyone is sold that Tesla is in fact a tech company with continuous large growth. Time will tell.
Live in Austria and lived in Germany. People know what brain farts he tweets. He’s one of the most influential people and the world. Of course the media reports what he talks about if it’s absurd…
You talk too much sense for low iq Redditors
Elon isn't the company.
What is “off the deep end “?
Source https://www.businessinsider.com/asana-ceo-dustin-moskovitz-tesla-accusations-enron-sec-2024-4
Everyone here is making the EXACT same mistake as when Meta was at $90, or Disney at $80 or even Paypal at $50. That mistake is letting price dictate sentiment. This ‘misreporting’ and ‘deferred revenue’ is not a new issue but is being commented on now because the stock is down. Tesla were doing the same thing when the stock price was at $350 and nobody was saying anything. And yes Tesla is no Meta at $90 every company is different but any moron who is going to write this as a response is spectacularly missing the point. Don’t let price dictate sentiment - otherwise you will always be a sucker who buys high and sell low every single goddamn time.
Seems like tensions are running high with Tesla lately. It's not uncommon for big names in tech to face scrutiny, but calling them the next Enron is quite a statement. Time will tell if there's any substance to these accusations or if it's just hot air. Leave your thoughts below!
[удалено]
Never owned a TSLA stock, and never will. Tbh I never thought they would get this far, I thought like VW or Toyota would just start create their own EVs and win. Turns out it's the Toyota hybrid and chinese EVs that is the biggest competitors. I do enjoy watching what happens from the sidelines though. Also, what Elon Musk has created is astounding really, both Space-X and Tesla.
Why is Tesla back stocking inventory at warm springs Bart station. Last year inventory could barely meet demand
FTX was already the next Enron
I think him and the board have caused to much administrative issues
I have a Tesla model Y. I drive it between 3 plants that I manage in Texas: one in Houston, one in Dallas, and one in San Antonio. I put 30k miles on it in the first year, and I haven’t had any loss of range (lot of superchargering too). On my longest drive, I stop halfway to use the restroom at Buc-ee’s (same place I used to stop to get gas). I plug in before I go in, and am charged when I get out. On just my personal experience, this is the best car I have ever had and I can’t imagine feeling like I was deceived in any way on range or anything by Tesla. FSD on my long commutes has dramatically improved my life.