1/5 Questions from my team on your NPV assumptions - we blv the answers are VERY important given your equity is 100% valued on your NPV assumptions as there there are no actual “earnings”, or even EBITDA at RUN. (1) As you are aware, your Callisto ABS currently has a default...
2/6... rate of 2.6% (in the best housing market the US has seen in decades); thus, why are you assuming, in your NPV calculations, all of your solar loans/leases have a default rate of 0% (the analyst at Kroll who rates your ABS paper has told us that he does NOT keep records...
3/6... on loans that re-perform, thus, while this is an answer we've heard provided, this can't be true); furthermore, the NOVA Kroll analyst told my team, in no uncertain terms, that the “majority of solar ABS loans that default do not re-perform”; so, why are you saying the...
4/6... opposite? Do you have data to back up this claim that you can share? (2) Currently, the lowest US inflation measure (i.e., CPI) is sitting at +6.2% YoY; thus, how is it possible that your assumption of a 20-30yr discount rate of 5.0% is apropos? What’s the cost of debt...
5/6... and cost of equity that go into your assumptions? and, (3) In your 90% renewal assumption on all of your leases forever, are you assuming the same solar panels are used upon renewal, and how much costs do you include for “equipment replacements”, and what equipment are...
6/6... you assuming is replaced (I don’t think this includes solar panels) – i.e., your warranty is 20yrs, but the inverter warranty is only 8-to-10yrs I believe; are you assuming costs for all inverters, or no? Any help here is GREATLY appreciated!
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Questions from my team (given we are not provided the dial in number or a call back from mgmt ever): (1) can you explain how with 101.8K more cars sold in 3Q21 vs. 3Q20 and a reported $2.9bn improvement in COGS/unit sold in 3Q21 vs. 3Q20 your reported FCF is down -$29mn 3Q21 YoY?
(2) Can you explain why your other segments continue to show negative earnings (3Q21 Services & Other had GMs of -2% vs. -4% in 2Q21; 3Q21 Energy/Storage had gross margins of 0% vs. 2% in 2Q21)? (3) A/Rs were down a little, but inventories were up a lot; was there a fleet sale...
... reversal in the quarter? (4) A/Ps and accrued liabilities contributed a LOT to cash; when you stop expanding, will your cash flow stop? (5) Why is your cash balance down, again, QoQ, despite record sales?
1/4 There has been a massive underinvestment in the industries that represent the things people consume due to the cost of equity in areas like energy generation, food making, clothing, etc. being artificially inflated (i.e., think 20-30% cost of equity currently vs. 7-9% in…
2/4… normal times); resultantly, the investment decision in these segments has demanded stock buybacks over reinvestment in the underlying biz. Consequently, due, largely to Central Bank manipulation of all stocks (w/ much of the new money creation going to asset managers like…
3/4… Blackrock/Vanguard, who allocate money virtually blindly with VERY little ACTUAL due-diligence), all equities are being bid higher, no matter what’s happening in the underlying business, driving up the cost of equity (& thus discouraging reinvestment in businesses…
1/11 The China Problem in a Nutshell: Property has become too expensive in China - i.e., the price-to-income ratio in Beijing, Shenzhen, and Shanghai all exceed 40x, vs. 22x for London, and 12x for NY; the definition of unaffordable housing, according to The Urban Reform...
2/11... Institute, is a ratio of 3x. Thus, due to broad-based pressure, President Xi has begun to "prick" the property bubble in China in an effort to make things affordable for his population (which, by the way, saw a peak in working age folks - i.e., people between the ages...
3/11... of 15 to 64 - in 2015, and is expected to begin declining by 2030 [according to the World Bank]). The problem, unfortunately, is real estate construction accounts for ~29% of China's GDP, while China's property sector, alone, is ~20% of global steel & copper...
1/5 China posted "catastrophic" property sales data for the week of 10/1-to-10/8, & with: (a) Evergrande missing a 3rd round of (offshore) bond payments today, (b) Modern Land asking investors to push back a $250mn bond payment due Oct. 25th by 3 months to "avoid any potential...
2/5... payment default", and (c) Xinyuan Real Estate proposing payment of just 5% of the principal on a note due Oct. 15 (which Fitch called a distressed exchange), all hell is breaking lose in the Chinese bond market. Stated differently, contagion is spreading beyond just the...
3/5... property development space. And, given local governments (i.e., LGFV) in China derive ~70% of their income from land sales, if problems in China's construction market begin to impact nominal land prices negatively, this could trigger a massive problem in the world's...
1/4 You do great work, but I think you’re wrong here… let me explain; quantitative easing is actually a form of tightening (if banks aren’t lending more) in that: (a) it aggregates money at the commercial banking level, and (b) if: ▲ Assets (A) = ▲Reserves (R) + ▲…
2/4… Banknotes in circulation (BK) + ▲ Government deposits (GD) =, then rearranging the formula: ▲ (R) = ▲ (A) – ▲ (BK) – ▲ (GD); stated differently, using MATH, and by definition, banks CANNOT cause the amount of reserves at the central bank to fall by “lending them…
3/4… out” to customers. Thus, while banks have a TON of excess reserves, banks CAN NOT and WILL NOT lend out those excess reserves held at the Fed to non-bank entities.
For this reason, the more QE Central Banks engage in, the cheaper the money is for bank-to-bank lending…
Cool. You didn't really address why you've had a total of 61 recalls vs. just 3 for the rest of the entire US motobike industry (i.e., 10 players combined), but maybe we can take this offline. However, is the below chart still accurate (based on your 2Q orders, assuming no new...
... orders, you've converted only ~12% of your pre-orders; if yes, can you understand why some may see your reported pre-orders as "sketchy")? Also, can you explain why on November 19, 2020 you announced a 90-day trial period with the City of Orlando Mayor Buddy Dyer’s...
... office as a potential first responder vehicle, which sent your stock price MUCH higher to $9/shr from $20/shr within 2 days; yet, a day before, on Nov. 18, 2020, the day before your Orlando 90-day first responder trial period was announced, Arcimoto filed a safety recall...