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23 Feb 2017

Tesla reports loss of $121.3 million in Q4

Even with a highly-anticipated Model 3 launch set for 2017 end, Tesla lost $121.3 million in the quarter ended December 31.

The company's reported revenue of $2.3 billion in Q4 2016 was 88% higher than the $1.2 billion in 2015.

CFO Jason Wheeler will be leaving the company in April to be replaced by former CFO Deepak Ahuja, who had retired in 2015.

In context

Tesla Q4 earnings indicate low profitability but overvaluation


What could have affected Tesla's 2016 performance?

Tesla was criticized for missing its vehicle-delivery guidance. CEO Elon Musk promised to manufacture 500,000 units by 2018 but failed to build even 90,000 units last year.

Tesla attributed the loss to capital expenses of $522 million for Model 3 production.

Further, it acquired SolarCity, a solar panel company, in November. The acquisition increased its operating expenses by another $85 million.

Non-disclosure of SolarCity acquisition

Solar energy services provider, SolarCity had consistently made losses till Tesla acquired it for $2.6 billion. Analysts say that it is hard to ascertain from the limited financial figures provided by Tesla exactly how much of its overall $121million net loss is related to SolarCity.

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What does this report indicate about Tesla's performance?

Tesla quarterly revenues stood at $2.28 billion with a loss per share at $0.69. It means that the operating expenditure has increased more than expected.

When a company is expanding, it is the capital expenditure (to build capacity) that should go up, not operating expenditure that pertains to day-to-day maintenance. If the trend of rising operating expenses sustains, Tesla will struggle to maintain profitability.

Tesla going high on RSI, gets sell signal


Tesla going high on RSI, gets sell signal

Relative Strength Index (RSI) measures the speed in which a stock price fluctuates in a given period of time.

RSI above 70 indicates that a stock is overbought and given a "sell signal." Conversely, anything below 30 is considered "oversold" and considered a "buy signal."

Tesla's RSI soared to 83 last week, the highest level in more than 4 years, drawing a sell signal.


Tesla gets a new CFO

In order to pursue opportunities in public policy, CFO Jason Wheeler decided to leave Tesla in April.

Deepak Ahuja, who was also Tesla's first CFO will replace him. Ahuja had joined Tesla in 2010, after working for 15 years with Ford Motors.

Ahuja had held Tesla's initial public offering in 2010 and had retired after appointing Wheeler to replace him in 2015.

Model 3 orders cancelled over Trump-Musk collaboration

Last month, some aspiring Model 3 owners reportedly cancelled bookings to protest Tesla CEO Elon Musk's association with US President Donald Trump as advisor. Musk was accused of siding with Trump on the unpopular ban on immigrants even though he disapproved of Trump before elections.

Goldman Sachs downgrades Tesla, shares fall further

01 Mar 2017

Goldman Sachs downgrades Tesla, shares fall further

Shares of Tesla fell by 5% after a downgrade by Goldman Sachs (GS) from "neutral" to "sell", triggering speculations that Tesla's Model 3 production might be delayed further. "Sell" refers to an analyst's recommendation to exit a stock.

Tesla has traded between $180 and $280 in recent years. However, GS analyst David wrote that "it may be headed toward the bottom of that range".

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