lol what a great world we live in
https://twitter.com/futurism/status/1314585666538397696?s=21
https://twitter.com/kristennetten/status/1316120294566682625?s=21
https://twitter.com/elonmusk/status/1316258179689443328?s=21
Is it though?
Wow, what a nightmare. Who could have seen this coming?
Maybe next time these idiots will use a contract with performance-based incentives and penalties so as to protect the government’s financial interest while also encouraging experimentation with risky new technologies
FSD went into beta release last night (not for me yet unfortunately:( ) There are some initial videos collected here:
Interesting times.
Or maybe if Musk wasn’t a scam artist.
i just checked in on my fantasy stock market investment sim game (investopedia’s warren buffet million dollar challenge). i bought $25k of tesla in 2016 and apparently it’s worth 3.5 million today lol i remember at the time thinking this is so stupidly overpriced
Congrats on taking Buffet’s million dollars.
That can buy a lot of avatars.
I think you’re ready for the exciting world of passive investment in low cost funds.
An interesting side-angle from the 10-Q that just came out is that Tesla has $1.75bn in deferred revenue relating to future software updates, superchargers, etc., a big chunk of which must relate to FSD. The 10-Q projects that almost $1bn of that will get released in the next year–potentially a big chunk of that is whenever they convince their auditors that their FSD obligation is satisfied. I’m not sure if they have any deferred expenses associated with that revenue–I would guess not, but @spidercrab would surely know.
Anyways, buckle up for Tesla to crush earnings in Q4 or Q1 and then for another round of bizarro bear cases: “Tesla customers pay them in advance for services they haven’t even delivered, then they book huge profits when they do it–this company is doomed!”
What amuses me most about Tesla and their shorts is that you could go back in time to a year ago and they’d be incredulous at the current Tesla price. You wouldn’t even have to tell them there was a 5-1 split. “TSLA at 426 in October 2020? Keep dreaming man”.
You’d think that being THAT relentlessly wrong would teach some humility. It, uh, doesn’t seem to.
That’s the only thread I read on 2+2. It’s the best thing on the internet.
I don’t follow Tesla very closely, but I would expect there not to be any deferred expenses for a case like this. That’s because I assume the company hasn’t yet incurred the costs of providing those upgrades, so there’s nothing to defer. So I imagine it’s similar to a basic software company that implicitly promises future upgrades at no cost.
Basically:
Year 1: Company sells product for $100 and there’s an implicit or explicit promise to continue supporting that product for the next 5 years. The company values that promise at $15.
So in Year 1, the company recognizes $85 of revenue for the component that it earned and records $15 of a liability called deferred revenue. There’s no expense to defer because software designers haven’t yet started working on those upgrades. (Or, more likely, it’s not worth the hassle of trying to measure the extent to which software designers have worked on those upgrades.)
In years 2-6 (or 1-5, whatever), they’ll record $3 of revenue each year, reflecting the “upgrade” component they’re earning over that time. The cost of the software designers will just be recognized in the period they’re performing work.
So in Tesla’s case, if they’re already operating at something like steady state with regard to the number of engineers/designers/whatever working on those updates, I’d expect the $1 billion to flow through revenue with no associated uptick in expenses. That is, they’ll continue incurring the same expenses as they did in the prior year to develop and distribute those upgrades. (This wouldn’t be a pure $1 billion increase in revenue, though, because they recognized $300 million of previously-deferred revenue in 2019.)
Losing play money shouldn’t hurt them too badly though.
Conceptually, the expenses related to the revenue are the developer salaries, but I assume those are all expensed and not charged to COGS or something, right?
Question just because I haven’t heard anyone talk about it. For self driving cars, has there been any advances in working with the government to standardize road design/signals/whatever to help self driving cars be better utilized? It’s just seemed odd to me that all the advancement I hear is on the automobile side of things, when I’ve got to think that changing road design/materials/ etc or whatever would have to yield some results.
And of course it’s fine to hate techbro mega-billionaires, even encouraged. But I can’t hope for bad things to happen to Musk companies like I’d laugh about if Amazon did something dumb or if Facebook gets broken up/fined because of anti-monopoly action or whatever. Because that would mean that electric cars would have a big setbacks or a rocket would blow up, and I’m rooting for rockets and electric cars, I don’t care who’s making them.