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1/ Interesting thread here wondering if Q4 is $TSLA bear trap. But isn't record GAAP profit in Q4 inevitable? Deliveries were up 8% over Q3, mostly high ASP; record number produced (so greater manufacturing efficiency). It all works out to a GAAP profit of at least $330MM.
2/ If $TSLA's Q4 is less than $330MM, then Q3 numbers were faked. Likely tricks include unrealistically low warranty reserve, delivering unfinished cars (thereby deferring some COGS), concentrating higher than average regulatory credit sales into the Q.
3/ Assuming Q4 is $330M, and that Q3 & Q4 are sustainable, that works out to a $TSLA P/E ratio of 45 or so. Only eight times higher than the range where other (mostly profitable) auto companies trade. But it's not sustainable, for all the reasons Goldman Sachs outlined yesterday.
4/ So, even with Q4 profit, $TSLA will have lost $800MM in 2018 and face massive losses in Q1 (which will be a disaster because of massive planning failure on EU homologation & evaporated US demand). Analyst EPS forecasts for 2019 are shrinking and will eventually go negative.
5/ But, to the original point: $330MM+ $TSLA GAAP profit in Q4, or Q3 was faked. Just no way around that.
6/ I should add this. Much of $TSLAQ, including some of its most astute members, disagree with me. They believe Elon's email was carefully crafted to show current situation in best possible light in order to avoid scaring Tesla vendors. If so (and it's likely), then Q3 was faked.
