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Elon Musk Bailed Out of $6bn Google Takeover To Save Tesla From 2013 Bankruptcy
An anonymous reader sends word that Elon Musk almost sold Tesla to Google in 2013 when the company was close to bankruptcy. "Elon Musk had a deal to sell his electric car company Tesla, to Google for $6bn (£4bn) when it was heading for bankruptcy with just two weeks' worth of cash left in the bank. During the first week of March 2013, Musk spoke to his friend Larry Page, chief executive of Google, about the search giant buying his car company, which at the time was suffering from falling sales amid technical problems with the few Model S luxury sedan cars it had delivered. Ashlee Vance, author of upcoming book Elon Musk: Tesla, SpaceX and the Quest for a Fantastic Future, claims in an extra for Bloomberg two people 'with direct knowledge of the deal' said Musk and Page agreed to the buyout and shook on a price of around $6bn. This was plus promises from Google to invest $5bn for factory expansion and to not break Tesla up or close it down."
More competition is better. We know google is working on their own car - but the Tesla is here today and doing better than anyone ever thought. No wonder the guy can do rocket science.
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
Nevermind, I read "bailed out" to mean the company was saved by the sale, or the company was "bailed out," not that he opted out of the sale. I still think the headline could be more clear.
https://www.eff.org/https-everywhere
This is FUD. You may argue that Department of Energy should have acted as venture capitalist and demanded more return, but it is not a loss. It is potential profit that was not received. Congress explicitly required Department lend on low rates and they have good reasons for it. Department is not a venture capitalist and should not act as such, such activity should be left to private business, not Government entity. There is big difference between corporations requiring bailout because of their own mismanagement or fraud while doing usual business and corporations trying to introduce something completely new, that may benefit all taxpayers in the long run. Hence the loan was from Department of ENERGY, not Treasury.
google boys are not. They chase what they consider to be the good dollars. The others, chase the easy dollars, no matter how corrupt it based on.
I prefer the "u" in honour as it seems to be missing these days.
Yeah, the DoE got its loan repaid *in full*, *early*, and *with interest*, and the result was a successful American company providing employment and driving innovation with world-leading products, built in America, and paying US taxes. But according to the dimwit that wrote that article, because the DoE was in a position to bend Tesla over and fuck it in the ass, and they did not do that, that represents a "DISASTER" for taxpayers. Sometimes you just have to shake your head and move on.
As such, there is no reason to believe that they will not consider building their own cars. And if they were to do so, I am guessing that they will Work with Tesla to make their own.
There is a very good reason to believe they will not consider building their own cars. The reason is economics. Cars are a generally low margin business with huge capital requirements. The engineering and manufacturing are something Google has absolutely no expertise or advantage in. A VERY profitable large car manufacturer has profit margins around 8-10% (see Porsche or Toyota) and most are somewhere between 0-5% most of the time. Google right now has profit margins around 25%. If they got into the car business in any sort of meaningful way their profit margins would drop like a rock along with their share price. They would be jumping into a cutthroat business that they have zero advantage or experience in. Even if they bought a company like GM outright, it would be basically nothing but a huge distraction from their primary business. A company like Tesla they could manage because it is so small but eventually they would probably sell it off.
While Google has the financial means to get into the car business if they wanted to, they would be insane to do so. I could easily see them providing technology used in cars but I don't see any (sane) reason why they would actually want to make cars themselves.
This is FUD. You may argue that Department of Energy should have acted as venture capitalist and demanded more return, but it is not a loss. It is potential profit that was not received. Congress explicitly required Department lend on low rates and they have good reasons for it. Department is not a venture capitalist and should not act as such, such activity should be left to private business, not Government entity. There is big difference between corporations requiring bailout because of their own mismanagement or fraud while doing usual business and corporations trying to introduce something completely new, that may benefit all taxpayers in the long run. Hence the loan was from Department of ENERGY, not Treasury.
And yet, the federal government makes loans to grad students in the 6% to 7% range. A failing tech company with a billionaire owner gets low interest loans because of the potential for the future, but low and middle income grad students, who really are the future get high rate loans.
But there is no such thing as a free market. Yet most people still agree that competition helps drive [pun] the economy.
It isn't really about a free market, but about capitalism as an economic system. According to capitalism, Tesla, should have gone to the banks or investors and if Musk's plan was good, he would have received the capital he needed to stave off bankruptcy. He actually did that and had a deal worked out. However, the government also intervened in the market and offered him a better deal. That is not capitalism, but corporatism (which is the politically correct modern name for fascism).
Either way, Musk and Tesla would have staved off bankruptcy, the difference is that with the government bailout/loan, Musk gets to keep control of Tesla, whereas the Google investment would have split control. It's not so much about a free market, but instead about the government intervening in the economy that seems to benefit only a select few. I'm not saying that the government should not have loaned the money to Musk. I am saying it should only have done so if there were no other option. Since there was another option, although less palatable to Musk, he should not have received a federal bailout.
Put differently, unlike the GM bailout, this bailout was to somebody in the 1% group to enable him to make luxury automobiles for others in the 1%. All paid for by the 99% who can't afford such a vehicle in the first place. It may be argued that GM was too big to allow to fail, but it is hard to argue that about Tesla, particularly when there was private financing available.
No, "corporatism" was Mussolini's preferred phrase, over that of "fascism." It is not "fascism" by any stretch of the imagination for a company to get a loan from the government.
And subjected himself to the whims of the corporations that gave him money? I'm sure they totally wouldn't interfere with the way the company operated, they'd never start demanding ridiculous growth at the cost of product quality and customer service, not at all.
At worst there is no difference. At best, it prevented an actually innovative company from sinking and its technology dispersing into the market, never to be heard from again while GM et. al. continued doing what they were doing.
So because one wrong policy is wrong, we should make all other policies that are remotely related wrong too? Is that what you are arguing here?
How about we just fix the wrong one (higher-than-mortgage-rates interest-bearing student loans)?
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
"but low and middle income grad students, who really are the future"
How so? Does the government get some guarantee on these grad students that's any better than what the DOE has? I don't think so.
Everyone seems to forget that Apple had a smoking gun in the $1B+ QuickTime vs. Windows Media lawsuit, and one of the conditions of Gates and Jobs making a deal was cross-licensing all patents.
THAT is what Gates wanted. Jobs needed the cash to keep Apple afloat (which he got far more of by liquidating Apple's holdings in ARM after killing Newton), but also needed the legal squabbles to go away and needed a reason for people to continue buying Mac, and Office was that reason.
One of the reasons NeXT never went anywhere is because Microsoft refused to write Office for NeXTSTEP. Jobs learned from that.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
So because one wrong policy is wrong, we should make all other policies that are remotely related wrong too? Is that what you are arguing here?
How about we just fix the wrong one (higher-than-mortgage-rates interest-bearing student loans)?
I, for one, would support that 100%. But, until they do, why should billionaires get a better government interest rate than the average person?
"but low and middle income grad students, who really are the future"
How so? Does the government get some guarantee on these grad students that's any better than what the DOE has? I don't think so.
Actually, yes. These loans can't even be dismissed via bankruptcy and many government benefits are tied to the repayment of them.
No it won't business deals fail all of the time. Remember the Sprint/T-Mobile merger? It failed. Previously AT&T's attempt at buying T-Mobile also failed and Deutsche Telekom received a hefty premium for AT&T dropping the deal.
As per the original acquisition agreement, Deutsche Telekom will receive $3 billion in cash as well as access to $1 billion worth of AT&T-held wireless spectrum.
So there may or may not have been a penalty associated with this deal not going through, the article doesn't discuss this.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
I don't know where you picked you stats, but recently Tesla just announced otherwise.
Actually I watched the recent excitement regarding Tesla on CNBC earlier this month, but googling shows: ...
The record was broken through a 55 percent sales increase for the same period from the previous year."
"April 5 (UPI) -- Tesla Motors announced it broke a company record for the first quarter of 2015
http://www.upi.com/Top_News/Wo...
Student loans are the most secure loans made.
You cannot default on a student loan. You can be in bankruptcy, broke, homeless, unemployed, with kidney failure, and you still cannot default on your student loan. There are only two ways out: pay it off, or die. And seeing as how most folks incur student loans when they are 18-26, odds are strongly in favor of the lender.
You can refinance student loans, people didn't in the past because your student loan was at ~3%. When the House GOP refused to pass a continuation of the low rate program, they jumped to 6-7%. So at this point, if you have equity in your house, life insurance, or retirement fund, it may well be worth it to refi with a secured loan and get back to 3-5% APR.
Also, my credit union was just advertising new vehicle loans for 2.85% APR. And as far as secured loans go, vehicles suck on the secondary market, there's just too much depreciation as soon as you drive it off the lot. But if you're paying 7%, or the 18% number you mention, it's because your credit rating is likely crap. Heck, even my credit card is at 9%, and I'm sure there are better rates out there.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs