Hello Redditors and Gamblers! We are hearing a lot recently from our Ol’ Wacky Stock that is Tesla (TSLA). The company will have its 4Q’s Earning Date the 25th January 2023, i know what you are thinking: “Bruh, shall I Yolo all my savings plus underwear into a call option or a put option??”.

Worry not, my Dear Reader! You came to the right post! In the past days, I gave you an exposé on Tesla’s intrinsic value, price tagging it at $83! Wow! You can read it here.

We all know about Its Textbook development of the price action, following its psychological and emotional wave: graph

Knowing all of this, let's dive into the last company SEC’s filling to see the truth behind the sugar coding of media, management and PR tactics. Companies are required to state the truth and what it is actually happening and expected to happen in the company, that is why they made it so hard and heavy to read and analyse. But lucky you, I went through all that boring ass wall of text to bring ya the Main Key Takeaways from what the management truly expect for the company! Bear in mind my comments will be written as follows [[this is a comment of mine]].

Have a nice reading! Let’s start!

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Automotive—Demand and Sales

[…] However, we operate in a cyclical industry that is sensitive to political and regulatory uncertainty, including with respect to trade and the environment, all of which may also be compounded by any future global impact from the COVID-19 pandemic, inflationary pressures, rising energy prices and increases in interest rates. Moreover, as additional competitors enter the marketplace and help bring the world closer to sustainable transportation, we will have to adjust and continue to execute well to maintain our momentum.

[[As we can see here, Tesla clearly states that the operates in “a cyclical industry that is sensitive to political and regulatory uncertainty” and that it is threatened by “inflationary pressures, rising energy prices and increases in interest rates”. They also announced issues with competitors “as additional competitors enter the marketplace”. We can clearly state with circumstantial evidence that the Company is mainly an automotive company, they avoid saying so directly to maintain the idea of a Tech Company as some investors imagine them to be.]]

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RISK FACTORS

[[Here we will dive into all the risks, problems and issues of Tesla, i will list them all and let you make up your own idea]]

Risks Related to Our Ability to Grow Our Business

1. We may be impacted by macroeconomic conditions resulting from the global COVID-19 pandemic
2. We may experience delays in launching and ramping the production of our products and features, or we may be unable to control our manufacturing costs.
3. Our suppliers may fail to deliver components according to schedules, prices, quality and volumes that are acceptable to us, or we may be unable to manage these components effectively.
4. We may be unable to meet our projected construction timelines, costs and production ramps at new factories, or we may experience difficulties in generating and maintaining demand for products manufactured there.
5. We may be unable to grow our global product sales, delivery and installation capabilities and our servicing and vehicle charging networks, or we may be unable to accurately project and effectively manage our growth.
6. We will need to maintain and significantly grow our access to battery cells, including through the development and manufacture of our own cells, and control our related costs.
7. Our future growth and success are dependent upon consumers’ demand for electric vehicles and specifically our vehicles in an automotive industry that is generally competitive, cyclical and volatile.
8. We face strong competition for our products and services from a growing list of established and new competitors.

Risks Related to Our Operations

1. We may experience issues with lithium-ion cells or other components manufactured at Gigafactory Nevada and Gigafactory Shanghai, which may harm the production and profitability of our vehicle and energy storage products.
2. We face risks associated with maintaining and expanding our international operations, including unfavourable and uncertain regulatory, political, economic, tax and labour conditions.
3. Our business may suffer if our products or features contain defects, fail to perform as expected, or take longer than expected to become fully functional.
4. We may be required to defend or insure against product liability claims.
5. We will need to maintain public credibility and confidence in our long-term business prospects in order to succeed.
6. We may be unable to effectively grow, or manage the compliance, residual value, financing and credit risks related to, our various financing programs.
7. If we are unable to attract, hire and retain key employees and qualified personnel, our ability to compete may be harmed.
8. We are highly dependent on the services of Elon Musk, Technoking of Tesla and our Chief Executive Officer.
9. Our information technology systems or data, or those of our service providers or customers or users could be subject to cyber-attacks or other security incidents, which could result in data breaches, intellectual property theft, claims, litigation, regulatory investigations, significant liability, reputational damage and other adverse consequences.
10. Any unauthorized control or manipulation of our products’ systems could result in loss of confidence in us and our products.
11. Our business may be adversely affected by any disruptions caused by union activities.
12. We may choose to or be compelled to undertake product recalls or take other similar actions.
13. Our current and future warranty reserves may be insufficient to cover future warranty claims.
14. Our insurance coverage strategy may not be adequate to protect us from all business risks.
15. Our debt agreements contain covenant restrictions that may limit our ability to operate our business.
16. Additional funds may not be available to us when we need or want them.
17. We may be negatively impacted by any early obsolescence of our manufacturing equipment.
18. We hold and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.
19. There is no guarantee that we will have sufficient cash flow from our business to pay our indebtedness or that we will not incur additional indebtedness.
20. We are exposed to fluctuations in currency exchange rates.
21. We may need to defend ourselves against intellectual property infringement claims, which may be time-consuming and expensive.
22. Increased scrutiny and changing expectations from stakeholders with respect to the Company’s ESG practices may result in additional costs or risks.
23. Our operations could be adversely affected by events outside of our control, such as natural disasters, wars or health epidemics.

Risks Related to Government Laws and Regulations

1. Demand for our products and services may be impacted by the status of government and economic incentives supporting the development and adoption of such products.
2. We are subject to evolving laws and regulations that could impose substantial costs, legal prohibitions or unfavourable changes upon our operations or products.
3. Any failure by us to comply with a variety of U.S. and international privacy and consumer protection laws may harm us.
4. We could be subject to liability, penalties and other restrictive sanctions and adverse consequences arising out of certain governmental investigations and proceedings.
5. We may face regulatory challenges to or limitations on our ability to sell vehicles directly.
6. The trading price of our common stock is likely to continue to be volatile.

Risks Related to the Ownership of Our Common Stock

1. Our financial results may vary significantly from period to period due to fluctuations in our operating costs and other factors.
2. We may fail to meet our publicly announced guidance or other expectations about our business, which could cause our stock price to decline.
3. Transactions relating to our convertible senior notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of our common stock.
4. If Elon Musk were forced to sell shares of our common stock that he has pledged to secure certain personal loan obligations, such sales could cause our stock price to decline.
5. Anti-takeover provisions contained in our governing documents, applicable laws and our convertible senior notes could impair a takeover attempt.

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[[Damn! I think they indirectly stated that there might be intellectual thief of their tech, something is telling me they know the high risks of corporate espionage by of operating in China. We shall expect the CCP to kick the out after they finish to copy Tesla’s tech.

High risks in the company image is high too, laughable the fact that they cited Musk as “Technoking of Tesla”.

Interesting the part where they said they “might not have enough liquidity to cover costs and expenses and debts that might limit their operations and there is no guarantee that they will have sufficient cash flow to pay indebtedness. This is Bad.”

Here too they cited the entering of strong competition for their products and services from a growing list of established and new competitors.

Issues with Lithium-Ion Cells are also cited.]]

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Over all, there are high risks and treats to the company, many of which are critical and highly dangerous. What do you think? What are your expectations for the company? How is Tesla performance going to in this 4Q 2022? Are you slapping Puts or Calls? Let the community know!