But in actuality, what I have is an "Rplate," a $700 plate-sized Kindle-like screen on the back of my car -- high-contrast grayscale e-ink and all.
Great, a $700 screen to do something I can do with a $1 piece of stamped metal which won't fall apart the first winter it is exposed to and won't be stolen by some merry pranksters.
The device also contains an RFID and GPS chip that allow me to see where my car is at any given moment, to voluntarily track my trips, and to even optionally display DMV-approved customized messages in a small font below the plate number itself.
I know where my car is because I'm driving it. If it gets stolen I doubt this fancy license plate will help since it would be removed almost immediately. Same with tracking my trips which my smartphone handles more than adequately and can do other things besides. And WhyTF would I want a DMV approved message on my plate? I can already do that with a license plate holder without DMV approval.
Were I an actual paying customer, I'd be paying $7 per month in a service fee, too, mostly to offset the data connection to Verizon. The one-time $700 price tag alone is a bit high for me.
"A bit too high"? That price is obscene for something that solves no obvious problem.
Also, there are still unanswered questions about its security and what it means to voluntarily hand over so much personal location data to a single company.
That's not an unanswered question. They will sell the data to the highest bidder. If you don't know that already you are an idiot.
I agree - the study was to see if caffeine was the cause of longer life - turns out any coffee led to longer life.
No it did not prove that coffee led to a longer life. It merely showed that there was a correlation between coffee drinking and living longer. Those are NOT the same thing and it entirely possible that the two facts have nothing to do with one another.
Control for other causes among 500K participants over the entire breadth of the island of Great Britain? What do you want??
I want some effort putting into determining whether or not this correlation actually means anything before they report it as if it actually means something. There are all kinds of weird correlations that are statistically significant but don't actually mean anything or have any direct relationship. For example the divorce rate in the State of Maine has a 99% correlation with the per capita consumption of margarine in the US. Those two facts clearly have nothing to do with one another and yet they correlate incredibly strongly with large populations behind each.
The latest findings come from a study published Monday in JAMA Internal Medicine that included about a half-million people in England, Scotland and Wales. "We found that people who drank two to three cups per day had about a 12 percent lower risk of death compared to non-coffee drinkers" during the decade-long study, says Erikka Loftfield, a research fellow at the National Cancer Institute
And what other factors did they control for? Age, income, working conditions, gender, diet, age, and many other things can affect longevity. This sounds like yet another idiotic study that found a correlation and jumps to the hasty generalization about its implications. The abstract provides no indication any effort was made to control for other possible causes. The real question is whether coffee is the proximal cause or if it is just a convenient correlation result due to other factors.
I'm also curious who funded this particular study... Hate to be cynical but one has to wonder.
The stock valuation is definitely high because of speculation, but it's long term not short.
How long do you think is "long term"? Even a long term play still needs to have a justifiable ROI. It doesn't matter if it returns a 10% gain if it takes 10 years to do it based on the companies operating fundamentals.
If they can actually maintain sales and production of 5000 Model 3's a week that will generate profits around a couple billion a year, working from the assumption that their gross profit margin is only 20%.
Gross margin is not relevant here except insofar as it affects net margin. If Tesla builds 5000 Model 3s per week and sells them for $50K each then that is ~$13 billion in revenue (slightly over double their current revenue). 20% gross margin is in line with other automakers so the question is what the net margin will be. The most profitable automakers out there top out at around 11% net margins. Let's pretend Tesla can match that somehow even though they clearly won't in the near term. That would be a profit of $1.43 billion assuming some ludicrously optimistic assumptions come to pass. But realistically Tesla would be lucky to capture a fraction of that in the next few years. They might be very profitable in time but it won't happen in the next 12 months and they have some debt to serve next year.
Then you have to figure out how long it would take for the shareholders to recoup their money. With a market cap of $60 billion (equity) plus $10 billion in debt (debt gets paid first over equity) and profits of $1.43 billion it will take 49 YEARS for TSLA to generate a positive return on that investment at current share prices. ROI = Annual Cash Flow / Equity and that works out to around a 2.8% ROI under completely unrealistic profit assumptions of 11% net margins. I'm a patient guy but I need an ROI before I'm dead.
That's hilarious logic right there. You don't even understand that you're not comparing the same thing, do you?
What exactly do you think is not "the same thing"? Do you not recognize the same data for both companies? You think Tesla is somehow special so that profits and revenues shouldn't play any role in determining market cap?
So, what you're saying is that you don't know anything about Tesla. I get it.
Ok smart guy. Show us how brilliant your financial analysis is. Prove your case. Show me how Tesla is going to make a profit large enough to justify a valuation 50% larger than Ford with 7% of the revenue and negative profits nor any near term expectations of significant profits. Dazzle me with your brilliant insight.
With this level of expertise, I can't imagine why you're not the next Warren Buffet.
Never claimed to be Buffet but you don't have to be to know that TSLA is a ludicrously overvalued stock. Someday it might make sense for TSLA to be worth more than Ford but that day is definitely not today.
Ford's valuation is based on future earnings potential.
Correct. Same is true for any company. Tesla included. However stock prices in the sort term routinely can deviate from this rational analysis. We saw quite a lot of this back during the dotcom bubble.
Whether that's accurate or not, Tesla can change direction vastly more rapidly than can FoMoCo.
Tesla's valuation cannot possibly be based on any rational analysis of future free cash flows. The fact that they are currently more nimble than Ford is pretty much irrelevant in the short to medium term. Short term valuations don't have to be based on anything rational. Long term though they pretty much always are. Show me any rational analysis whereby Tesla's future earnings potential exceeds Ford's within the next 5 years by enough to justify their current valuation.
Investors need a return on their investment within a reasonable time period. Tesla is so overpriced that it is unreasonable to expect a return on investment any time soon. Doesn't mean it is a bad company or that they won't be profitable. It just means that they aren't likely to generate enough profits to provide a rational ROI to investors in a useful time frame. Right now we just have a bunch of people playing a game of who is the Greater Fool.
Not necessarily. You could be hoping that one of their competitors buys them.
Doesn't change the equation. If you buy Tesla stock and hypothetically GM buys Tesla, you still have an investment in Tesla and you still are hoping for misfortune for the competition because if someone buys a Tesla then they are not buying someone else's brand of vehicle. It might bump your ROI but it remains a zero sum game whereby a long position in one auto company is de-facto a synthetic short position in every other auto company.
Simple logic. Ford made $8 billion in PROFIT last year on $156 billion in revenue and has a market cap of $40 billion or so. Tesla lost $2 billion on $11 billion in revenue and has a market cap of $60 billion? Further Tesla has shown no credible path whereby they will generate profits superior to Ford's in the future. If you think that makes any kind of sense you are out of your mind. There is no rational scenario you can propose whereby Tesla is going to generate enough profit to justify that market cap in less than 15 years (and that's being generous) even with ludicrously optimistic assumptions.
I'm not entirely disagreeing, but I'm not willing to make the claim that it's "irrationally over priced", because Tesla is in a position that few companies have ever been in.
Evidently you do not recall the dotcom era around 1998-2000. Irrationally overpriced companies are nothing even remotely new and Tesla is not covering any new ground there. Seriously, show me any credible story whereby Tesla generates enough profits to justify their current market cap in less than 15 years. At the end of the day stock prices and market caps are all about profits (including expected profits), otherwise investors eventually have to look elsewhere to make money. If I invest $1000 in Tesla but have to wait 15 years to recover my money while playing a game of who is the greater fool then I'm an idiot.
Tesla has already sold pretty much all of the vehicles it will produce this year, and maybe next year, without sales people, showrooms or a national advertising campaign.
Impressive but let me know how you think they are going to manage that trick when they sell as many vehicles as Ford does. It's easy to sell out when you cannot produce all that much to begin with. 5000 vehicles a week? Ford makes and sells about 17,000 F-150s each week just on that model alone and they aren't scrambling to do it either. And more importantly they are making huge profits along the way.
Yes, compared to the established car companies, Tesla's valuation looks insane.
Compared to pretty much ANY company Tesla's valuation IS insane.
Ford, a company that killed all their car models, to focus on constructing trucks and SUVs exclusively, at a time when oil prices are going up? If anything I think they are over valued.
Several problems with your analysis. 1) I think you hugely underestimate the demand for trucks, particularly in the US 2) Ford has pretty much never made a profit on passenger cars in the last 30 years. 3) There is nothing preventing them from electrifying their trucks to hybrids or EVs and in fact Ford is doing just that. 4) Ford is comparably priced to comparable companies with comparable product portfolios. They also posted a profit of $8.4 billion last year. That sort of profit easily justifies a market cap of $40 billion.
The shorters are the ones who set themselves up to profit from the misfortune of others, and collectively have also been working to bring about that misfortune.
When a stock is as irrationally over priced as Tesla there is nothing wrong with betting that it will fall back toward sanity. Honestly we need people who are willing to bet with their own money when something seems wrong. Tesla is doing some really interesting things but there is no rational basis for them to have a market cap larger than Ford. I honestly am kind of a fan of Tesla but I'm also a fan of financial sanity.
Furthermore when you are in a mature market like automobiles ANY investment is de-facto a bet on the misfortune of others. If you buy stock in Ford you are effectively hoping for misfortune for Toyota or GM. It's near as makes no difference a zero sum game. If you buy stock in Tesla you are hoping for misfortune for their competitors. That's fine but it's not really much different than shorting TSLA directly.
If it fails then it fails expensively, which discourages people from that practice thereby reducing the amount of misfortune in the world.
They are taking a risk and they are well aware of that fact but I think their thesis is correct. Tesla's current stock price cannot be justified with any rational analysis of likely future free cash flows. A $60 billion market cap on a company with $11 billion in revenue that has never made an operational profit? That's bananas. The only real question is when Tesla's stock price will come back to Earth. Might take a while but sooner or later it has to happen.
Amazon did care about short term results, and generally hit or exceeded their short term targets.
That is completely not true. Here is every letter to shareholders from Jeff Bezos since 1997. Read the letter from 1997 and then you'll understand. Amazon hasn't given a shit about short term financial targets since their inception.
However, nobody else brags near his level and where he underachieves, nobody else goes to start with.
"Underachieve"? Seriously? Yes he sets unrealistic self imposed deadlines and misses a fair number of them but anyone calling Musk an underachiever is delusional. The guy has started PayPal, SpaceX, Tesla, SolarCity, and The Boring Company and he actively manages the last four. He has completely reshaped the space launch business and it looks likely he will do the same to the auto business. If that's underachieving then give me some of that.
Frankly if you had achieved 10% of what he has you'd be bragging about it too. And bragging isn't really a problem if you can actually back it up and so far he mostly has.
You can't run a line 24/7/365. There's routine maintenance, cleaning and various other reasons that production equipment needs to shut down for a period of time.
Nobody expects them to. But it isn't unheard of to run assembly plants on three shifts either. Maintenance time and equipment upgrades are scheduled in advance whenever possible - often weekends or between shifts. I've seen this handled a variety of ways depending on the particular equipment needs. It's challenging but not a new problem or an unsolved one.
If I had stock in Tesla (or any car company) I would rather want to know how many cars they sell, not how many they produce.
Every car they produce at the moment is effectively already sold so at least for now it's the same number. Once they get through the initial bolus of orders then it will be more interesting. Of related interest Tesla doesn't maintain large stocks of inventory like the traditional automakers (they are basically building to order), nor do they account for when a sale occurs in precisely the same way either.
Corporate goals/deadlines are generally always 'self imposed'. Seems folks think Tesla deserves some type of credit for this?
Not where there are big interest payments coming due in the near future.
It is the mark of a well run company to be able to accurately predict performance and then to hit those goals on schedule.
That's one way to measure it but the most important measure is their ability to consistently develop and maintain substantial free cash flow. Nobody really cares if a company meets artificial expectations if they consistently generate substantial profits. Companies generally can only "predict" performance accurately by fudging the numbers anyway. If you see a company that consistently "beats" wall street expectations by just a little every quarter, you can be dead certain there is some financial engineering going on. (I'm an accountant so I should know) In reality businesses are rarely so predictable so some amount of variation should be expected. You just don't want any huge negative surprises but a little up and down is generally fine unless you are some wall street asshat who only cares about the current quarter.
Musk isn't very good at defining targets that can be hit on schedule and/or hitting them on schedule. That doesn't mean he will fail, but it is generally a bad sign.
For most companies I would regard this as a negative but it's no secret that Musk sets very hard to achieve "deadlines" all the time so I think that is baked into the stock price. In a way it's kind of genius in that he acts a little irrational so it makes it harder for analysts to hold him to a standard of performance. He's also taking a page from the Amazon playbook in not really giving a shit about short term results and apologetically so.
If you only look at the quarter average, they won't be making anywhere near 5000 a week, especially given they've had several shutdowns to retool.
That doesn't really matter looking forward. The question is whether they can get to the necessary production rate fast enough to get the cash flowing and without blowing up quality in the process. Sure it would be nice if they did 5000 on average for the previous quarter but it's no secret that they weren't going to do that. The question is whether they can continue to meet production milestones next quarter and whether those will be sufficient to get the cash flow going fast enough to keep the company afloat.
Their main problem will still be cash flow, since they're not making enough to cover their expenses. If the "pay another $2500 to order now" thing doesn't pan out, they'll need even more high-interest loans, or worst case, another round of stock offerings.
Yes cash flow is THE big question. Elon likes to push the limits so it will be interesting to watch Tesla over the next 6-12 months.
Facebook has admitted providing dozens of tech companies with special access to user data after publicly saying it restricted such access in 2015.
It's not a problem if you don't use Facebook. (or less of a problem anyway) I understand why people use Facebook but I really don't see the value proposition as anywhere near sufficient for me to trust them with any sensitive data. I can't control what other people do but I'll be damned if I'm going to help them out by volunteering my information just so people I barely interact with can pretend to be my "friend".
As other people have pointed out, the magic letters here are "SLA". You must have a contract stating what the vendor's responsibilities are and be able to enforce that contract.
A contract is only as valuable as your ability to ensure it is enforceable. When you are dealing with a company the size of Google they can hire some flesh eating lawyers and have the bank account to keep you busy until you die and so if you plan to bring a lawsuit you'd better be prepared for shock and awe. Just having a contract isn't enough by itself.
You are right that a service level agreement is a very good idea but it isn't going to matter if it is cheaper for them to screw you anyway.
Otherwise, you don't have a business, you just have a hobby.
That's a nice sound bite but it's complete BS. When you are a small business or a startup you generally simply don't have the resources to fight a company the size of Google. You can have whatever agreements you want but if they decide to screw you there isn't much you can do about it. I've started several companies where we had to depend more than is ideal on a single large vendor and it's freaking terrifying if/when you don't have alternatives - contract or no.
Never trust your data to a third party when millions are at stake -- let alone critical infrastructure reliability.
While that is reasonable advice, sometimes that isn't an option. Sometimes the only reasonable way to do things is through a third party. Furthermore sometimes the third parties can do a better job than I could do myself, even accounting for their flaws.
Pretend? Sports DON'T matter, unless you want them to. People get to choose how they waste their time.
Sports DO matter and plenty of people want them to. It's an industry worth hundreds of billions of dollars. Millions of people make their livelihoods from sports. When over a billion people watch the same event it's pretty safe to say it matters. It might not matter to you but it does matter.
Not in the US it didn't. For better or worse few people here give a shit about the World Cup. We only care about events we can actually win. When we suck worse than Panama we pretend it doesn't matter.
Google is a a software company that makes some hardware.
Google is an advertising company but if you call them a software company it's not far from the mark.
Apple is a hardware company that makes some software.
No they are not. They are a software company that only sells (most of) their software with a piece of hardware. But the hardware is just the packaging - not the secret sauce. Apple doesn't make hardware - they outsource that. There really isn't much difference between Apple's hardware and the competition. They DO make software - it's the core of what they do. You can tell what a company's core business is by what they do themselves versus what they buy from others. Apple's software is what people pay for. Few would buy an Apple computer without OS X and few would buy an iPhone if it ran Android. Hardware is critical to Apple's business model but calling Apple a hardware company is to misunderstand the company at a fundamental level.
I doubt Apple will ever get Maps to the quality as Google Maps is. It isn't money or resources, but how the company culture approaches the problem.
I agree with this to an extent. Apple isn't really culturally oriented towards organizing information like Google is. Apple is good at interfaces and design and user experience. Arguable among if not the best. But they never have been the best at applications and big data. Not to say they are incompetent but others do it better. Apple is exceptional at some things but they tend to pigeonhole themselves with design dogma and are more focused on building integrated devices than worrying about the information that goes on them.
Why bother trying to maintain their failed maps system when there are several others they could partner with?
Because you don't want to depend on third party vendors for something like that if you don't have to. Not at Apple's scale anyway. For mobile devices these days it qualifies as critical functionality. The importance of it almost cannot be overstated. So yeah it makes sense for Apple to be rolling their own so to speak.
And frankly their maps system hasn't failed. Far from it. It's got flaws of course but it's been getting the job done just fine for lots of people. The problem isn't that it is terrible but rather that it lags the competition to some degree. It would be bad for Apple if it started lagging too far behind. For some people it already does.
The electrical grid is already there but it is already buckling under demand
Not where I live it isn't. If it was buckling under demand then we would see routine blackouts or brownouts and that simply doesn't happen. Maybe if you live in India or some other country with an underdeveloped electrical grid you have that problem.
the infrastructure simply doesn't exist to handle the massive electrical load of everyone having and using an EV.
You don't seem to comprehend the difference between building infrastructure from scratch versus upgrading already existing infrastructure. Yes there will be upgrades needed but the hard work is already done. The wires coming into my house are already robust enough to handle powering an electric vehicle. So are the ones going to your house most likely. So is most of the electrical backbone. Charging an EV is not really worse that running an air conditioner. The rest of the problem is simply adding power plants and back haul wiring and/or solar arrays which would have to happen anyway. We just have to accelerate the pace if we add EVs into the mix.
There literally is no place within a 20 mile radius of my house where I can purchase hydrogen. I can plug an EV into literally every structure I see. EVs have won the day. Get over it.
Slashdot Mirror
But in actuality, what I have is an "Rplate," a $700 plate-sized Kindle-like screen on the back of my car -- high-contrast grayscale e-ink and all.
Great, a $700 screen to do something I can do with a $1 piece of stamped metal which won't fall apart the first winter it is exposed to and won't be stolen by some merry pranksters.
The device also contains an RFID and GPS chip that allow me to see where my car is at any given moment, to voluntarily track my trips, and to even optionally display DMV-approved customized messages in a small font below the plate number itself.
I know where my car is because I'm driving it. If it gets stolen I doubt this fancy license plate will help since it would be removed almost immediately. Same with tracking my trips which my smartphone handles more than adequately and can do other things besides. And WhyTF would I want a DMV approved message on my plate? I can already do that with a license plate holder without DMV approval.
Were I an actual paying customer, I'd be paying $7 per month in a service fee, too, mostly to offset the data connection to Verizon. The one-time $700 price tag alone is a bit high for me.
"A bit too high"? That price is obscene for something that solves no obvious problem.
Also, there are still unanswered questions about its security and what it means to voluntarily hand over so much personal location data to a single company.
That's not an unanswered question. They will sell the data to the highest bidder. If you don't know that already you are an idiot.
I agree - the study was to see if caffeine was the cause of longer life - turns out any coffee led to longer life.
No it did not prove that coffee led to a longer life. It merely showed that there was a correlation between coffee drinking and living longer. Those are NOT the same thing and it entirely possible that the two facts have nothing to do with one another.
Control for other causes among 500K participants over the entire breadth of the island of Great Britain? What do you want??
I want some effort putting into determining whether or not this correlation actually means anything before they report it as if it actually means something. There are all kinds of weird correlations that are statistically significant but don't actually mean anything or have any direct relationship. For example the divorce rate in the State of Maine has a 99% correlation with the per capita consumption of margarine in the US. Those two facts clearly have nothing to do with one another and yet they correlate incredibly strongly with large populations behind each.
The latest findings come from a study published Monday in JAMA Internal Medicine that included about a half-million people in England, Scotland and Wales. "We found that people who drank two to three cups per day had about a 12 percent lower risk of death compared to non-coffee drinkers" during the decade-long study, says Erikka Loftfield, a research fellow at the National Cancer Institute
And what other factors did they control for? Age, income, working conditions, gender, diet, age, and many other things can affect longevity. This sounds like yet another idiotic study that found a correlation and jumps to the hasty generalization about its implications. The abstract provides no indication any effort was made to control for other possible causes. The real question is whether coffee is the proximal cause or if it is just a convenient correlation result due to other factors.
I'm also curious who funded this particular study... Hate to be cynical but one has to wonder.
The stock valuation is definitely high because of speculation, but it's long term not short.
How long do you think is "long term"? Even a long term play still needs to have a justifiable ROI. It doesn't matter if it returns a 10% gain if it takes 10 years to do it based on the companies operating fundamentals.
If they can actually maintain sales and production of 5000 Model 3's a week that will generate profits around a couple billion a year, working from the assumption that their gross profit margin is only 20%.
Gross margin is not relevant here except insofar as it affects net margin. If Tesla builds 5000 Model 3s per week and sells them for $50K each then that is ~$13 billion in revenue (slightly over double their current revenue). 20% gross margin is in line with other automakers so the question is what the net margin will be. The most profitable automakers out there top out at around 11% net margins. Let's pretend Tesla can match that somehow even though they clearly won't in the near term. That would be a profit of $1.43 billion assuming some ludicrously optimistic assumptions come to pass. But realistically Tesla would be lucky to capture a fraction of that in the next few years. They might be very profitable in time but it won't happen in the next 12 months and they have some debt to serve next year.
Then you have to figure out how long it would take for the shareholders to recoup their money. With a market cap of $60 billion (equity) plus $10 billion in debt (debt gets paid first over equity) and profits of $1.43 billion it will take 49 YEARS for TSLA to generate a positive return on that investment at current share prices. ROI = Annual Cash Flow / Equity and that works out to around a 2.8% ROI under completely unrealistic profit assumptions of 11% net margins. I'm a patient guy but I need an ROI before I'm dead.
That's hilarious logic right there. You don't even understand that you're not comparing the same thing, do you?
What exactly do you think is not "the same thing"? Do you not recognize the same data for both companies? You think Tesla is somehow special so that profits and revenues shouldn't play any role in determining market cap?
So, what you're saying is that you don't know anything about Tesla. I get it.
Ok smart guy. Show us how brilliant your financial analysis is. Prove your case. Show me how Tesla is going to make a profit large enough to justify a valuation 50% larger than Ford with 7% of the revenue and negative profits nor any near term expectations of significant profits. Dazzle me with your brilliant insight.
With this level of expertise, I can't imagine why you're not the next Warren Buffet.
Never claimed to be Buffet but you don't have to be to know that TSLA is a ludicrously overvalued stock. Someday it might make sense for TSLA to be worth more than Ford but that day is definitely not today.
Ford's valuation is based on future earnings potential.
Correct. Same is true for any company. Tesla included. However stock prices in the sort term routinely can deviate from this rational analysis. We saw quite a lot of this back during the dotcom bubble.
Whether that's accurate or not, Tesla can change direction vastly more rapidly than can FoMoCo.
Tesla's valuation cannot possibly be based on any rational analysis of future free cash flows. The fact that they are currently more nimble than Ford is pretty much irrelevant in the short to medium term. Short term valuations don't have to be based on anything rational. Long term though they pretty much always are. Show me any rational analysis whereby Tesla's future earnings potential exceeds Ford's within the next 5 years by enough to justify their current valuation.
Investors need a return on their investment within a reasonable time period. Tesla is so overpriced that it is unreasonable to expect a return on investment any time soon. Doesn't mean it is a bad company or that they won't be profitable. It just means that they aren't likely to generate enough profits to provide a rational ROI to investors in a useful time frame. Right now we just have a bunch of people playing a game of who is the Greater Fool.
Not necessarily. You could be hoping that one of their competitors buys them.
Doesn't change the equation. If you buy Tesla stock and hypothetically GM buys Tesla, you still have an investment in Tesla and you still are hoping for misfortune for the competition because if someone buys a Tesla then they are not buying someone else's brand of vehicle. It might bump your ROI but it remains a zero sum game whereby a long position in one auto company is de-facto a synthetic short position in every other auto company.
And you claim that with what authority?
Simple logic. Ford made $8 billion in PROFIT last year on $156 billion in revenue and has a market cap of $40 billion or so. Tesla lost $2 billion on $11 billion in revenue and has a market cap of $60 billion? Further Tesla has shown no credible path whereby they will generate profits superior to Ford's in the future. If you think that makes any kind of sense you are out of your mind. There is no rational scenario you can propose whereby Tesla is going to generate enough profit to justify that market cap in less than 15 years (and that's being generous) even with ludicrously optimistic assumptions.
I'm not entirely disagreeing, but I'm not willing to make the claim that it's "irrationally over priced", because Tesla is in a position that few companies have ever been in.
Evidently you do not recall the dotcom era around 1998-2000. Irrationally overpriced companies are nothing even remotely new and Tesla is not covering any new ground there. Seriously, show me any credible story whereby Tesla generates enough profits to justify their current market cap in less than 15 years. At the end of the day stock prices and market caps are all about profits (including expected profits), otherwise investors eventually have to look elsewhere to make money. If I invest $1000 in Tesla but have to wait 15 years to recover my money while playing a game of who is the greater fool then I'm an idiot.
Tesla has already sold pretty much all of the vehicles it will produce this year, and maybe next year, without sales people, showrooms or a national advertising campaign.
Impressive but let me know how you think they are going to manage that trick when they sell as many vehicles as Ford does. It's easy to sell out when you cannot produce all that much to begin with. 5000 vehicles a week? Ford makes and sells about 17,000 F-150s each week just on that model alone and they aren't scrambling to do it either. And more importantly they are making huge profits along the way.
Yes, compared to the established car companies, Tesla's valuation looks insane.
Compared to pretty much ANY company Tesla's valuation IS insane.
Ford, a company that killed all their car models, to focus on constructing trucks and SUVs exclusively, at a time when oil prices are going up? If anything I think they are over valued.
Several problems with your analysis.
1) I think you hugely underestimate the demand for trucks, particularly in the US
2) Ford has pretty much never made a profit on passenger cars in the last 30 years.
3) There is nothing preventing them from electrifying their trucks to hybrids or EVs and in fact Ford is doing just that.
4) Ford is comparably priced to comparable companies with comparable product portfolios. They also posted a profit of $8.4 billion last year. That sort of profit easily justifies a market cap of $40 billion.
The shorters are the ones who set themselves up to profit from the misfortune of others, and collectively have also been working to bring about that misfortune.
When a stock is as irrationally over priced as Tesla there is nothing wrong with betting that it will fall back toward sanity. Honestly we need people who are willing to bet with their own money when something seems wrong. Tesla is doing some really interesting things but there is no rational basis for them to have a market cap larger than Ford. I honestly am kind of a fan of Tesla but I'm also a fan of financial sanity.
Furthermore when you are in a mature market like automobiles ANY investment is de-facto a bet on the misfortune of others. If you buy stock in Ford you are effectively hoping for misfortune for Toyota or GM. It's near as makes no difference a zero sum game. If you buy stock in Tesla you are hoping for misfortune for their competitors. That's fine but it's not really much different than shorting TSLA directly.
If it fails then it fails expensively, which discourages people from that practice thereby reducing the amount of misfortune in the world.
They are taking a risk and they are well aware of that fact but I think their thesis is correct. Tesla's current stock price cannot be justified with any rational analysis of likely future free cash flows. A $60 billion market cap on a company with $11 billion in revenue that has never made an operational profit? That's bananas. The only real question is when Tesla's stock price will come back to Earth. Might take a while but sooner or later it has to happen.
Amazon did care about short term results, and generally hit or exceeded their short term targets.
That is completely not true. Here is every letter to shareholders from Jeff Bezos since 1997. Read the letter from 1997 and then you'll understand. Amazon hasn't given a shit about short term financial targets since their inception.
However, nobody else brags near his level and where he underachieves, nobody else goes to start with.
"Underachieve"? Seriously? Yes he sets unrealistic self imposed deadlines and misses a fair number of them but anyone calling Musk an underachiever is delusional. The guy has started PayPal, SpaceX, Tesla, SolarCity, and The Boring Company and he actively manages the last four. He has completely reshaped the space launch business and it looks likely he will do the same to the auto business. If that's underachieving then give me some of that.
Frankly if you had achieved 10% of what he has you'd be bragging about it too. And bragging isn't really a problem if you can actually back it up and so far he mostly has.
You can't run a line 24/7/365. There's routine maintenance, cleaning and various other reasons that production equipment needs to shut down for a period of time.
Nobody expects them to. But it isn't unheard of to run assembly plants on three shifts either. Maintenance time and equipment upgrades are scheduled in advance whenever possible - often weekends or between shifts. I've seen this handled a variety of ways depending on the particular equipment needs. It's challenging but not a new problem or an unsolved one.
If I had stock in Tesla (or any car company) I would rather want to know how many cars they sell, not how many they produce.
Every car they produce at the moment is effectively already sold so at least for now it's the same number. Once they get through the initial bolus of orders then it will be more interesting. Of related interest Tesla doesn't maintain large stocks of inventory like the traditional automakers (they are basically building to order), nor do they account for when a sale occurs in precisely the same way either.
Corporate goals/deadlines are generally always 'self imposed'. Seems folks think Tesla deserves some type of credit for this?
Not where there are big interest payments coming due in the near future.
It is the mark of a well run company to be able to accurately predict performance and then to hit those goals on schedule.
That's one way to measure it but the most important measure is their ability to consistently develop and maintain substantial free cash flow. Nobody really cares if a company meets artificial expectations if they consistently generate substantial profits. Companies generally can only "predict" performance accurately by fudging the numbers anyway. If you see a company that consistently "beats" wall street expectations by just a little every quarter, you can be dead certain there is some financial engineering going on. (I'm an accountant so I should know) In reality businesses are rarely so predictable so some amount of variation should be expected. You just don't want any huge negative surprises but a little up and down is generally fine unless you are some wall street asshat who only cares about the current quarter.
Musk isn't very good at defining targets that can be hit on schedule and/or hitting them on schedule. That doesn't mean he will fail, but it is generally a bad sign.
For most companies I would regard this as a negative but it's no secret that Musk sets very hard to achieve "deadlines" all the time so I think that is baked into the stock price. In a way it's kind of genius in that he acts a little irrational so it makes it harder for analysts to hold him to a standard of performance. He's also taking a page from the Amazon playbook in not really giving a shit about short term results and apologetically so.
If you only look at the quarter average, they won't be making anywhere near 5000 a week, especially given they've had several shutdowns to retool.
That doesn't really matter looking forward. The question is whether they can get to the necessary production rate fast enough to get the cash flowing and without blowing up quality in the process. Sure it would be nice if they did 5000 on average for the previous quarter but it's no secret that they weren't going to do that. The question is whether they can continue to meet production milestones next quarter and whether those will be sufficient to get the cash flow going fast enough to keep the company afloat.
Their main problem will still be cash flow, since they're not making enough to cover their expenses. If the "pay another $2500 to order now" thing doesn't pan out, they'll need even more high-interest loans, or worst case, another round of stock offerings.
Yes cash flow is THE big question. Elon likes to push the limits so it will be interesting to watch Tesla over the next 6-12 months.
Facebook has admitted providing dozens of tech companies with special access to user data after publicly saying it restricted such access in 2015.
It's not a problem if you don't use Facebook. (or less of a problem anyway) I understand why people use Facebook but I really don't see the value proposition as anywhere near sufficient for me to trust them with any sensitive data. I can't control what other people do but I'll be damned if I'm going to help them out by volunteering my information just so people I barely interact with can pretend to be my "friend".
As other people have pointed out, the magic letters here are "SLA". You must have a contract stating what the vendor's responsibilities are and be able to enforce that contract.
A contract is only as valuable as your ability to ensure it is enforceable. When you are dealing with a company the size of Google they can hire some flesh eating lawyers and have the bank account to keep you busy until you die and so if you plan to bring a lawsuit you'd better be prepared for shock and awe. Just having a contract isn't enough by itself.
You are right that a service level agreement is a very good idea but it isn't going to matter if it is cheaper for them to screw you anyway.
Otherwise, you don't have a business, you just have a hobby.
That's a nice sound bite but it's complete BS. When you are a small business or a startup you generally simply don't have the resources to fight a company the size of Google. You can have whatever agreements you want but if they decide to screw you there isn't much you can do about it. I've started several companies where we had to depend more than is ideal on a single large vendor and it's freaking terrifying if/when you don't have alternatives - contract or no.
Never trust your data to a third party when millions are at stake -- let alone critical infrastructure reliability.
While that is reasonable advice, sometimes that isn't an option. Sometimes the only reasonable way to do things is through a third party. Furthermore sometimes the third parties can do a better job than I could do myself, even accounting for their flaws.
Pretend? Sports DON'T matter, unless you want them to. People get to choose how they waste their time.
Sports DO matter and plenty of people want them to. It's an industry worth hundreds of billions of dollars. Millions of people make their livelihoods from sports. When over a billion people watch the same event it's pretty safe to say it matters. It might not matter to you but it does matter.
Uber could resume its testing of self-driving vehicles this summer after a long pause
Don't care as long as they do it somewhere else I don't literally get crushed by their arrogance and stupidity and greed.
Obviously the world cup crashed the system.
Not in the US it didn't. For better or worse few people here give a shit about the World Cup. We only care about events we can actually win. When we suck worse than Panama we pretend it doesn't matter.
Google is a a software company that makes some hardware.
Google is an advertising company but if you call them a software company it's not far from the mark.
Apple is a hardware company that makes some software.
No they are not. They are a software company that only sells (most of) their software with a piece of hardware. But the hardware is just the packaging - not the secret sauce. Apple doesn't make hardware - they outsource that. There really isn't much difference between Apple's hardware and the competition. They DO make software - it's the core of what they do. You can tell what a company's core business is by what they do themselves versus what they buy from others. Apple's software is what people pay for. Few would buy an Apple computer without OS X and few would buy an iPhone if it ran Android. Hardware is critical to Apple's business model but calling Apple a hardware company is to misunderstand the company at a fundamental level.
I doubt Apple will ever get Maps to the quality as Google Maps is. It isn't money or resources, but how the company culture approaches the problem.
I agree with this to an extent. Apple isn't really culturally oriented towards organizing information like Google is. Apple is good at interfaces and design and user experience. Arguable among if not the best. But they never have been the best at applications and big data. Not to say they are incompetent but others do it better. Apple is exceptional at some things but they tend to pigeonhole themselves with design dogma and are more focused on building integrated devices than worrying about the information that goes on them.
Why bother trying to maintain their failed maps system when there are several others they could partner with?
Because you don't want to depend on third party vendors for something like that if you don't have to. Not at Apple's scale anyway. For mobile devices these days it qualifies as critical functionality. The importance of it almost cannot be overstated. So yeah it makes sense for Apple to be rolling their own so to speak.
And frankly their maps system hasn't failed. Far from it. It's got flaws of course but it's been getting the job done just fine for lots of people. The problem isn't that it is terrible but rather that it lags the competition to some degree. It would be bad for Apple if it started lagging too far behind. For some people it already does.
The electrical grid is already there but it is already buckling under demand
Not where I live it isn't. If it was buckling under demand then we would see routine blackouts or brownouts and that simply doesn't happen. Maybe if you live in India or some other country with an underdeveloped electrical grid you have that problem.
the infrastructure simply doesn't exist to handle the massive electrical load of everyone having and using an EV.
You don't seem to comprehend the difference between building infrastructure from scratch versus upgrading already existing infrastructure. Yes there will be upgrades needed but the hard work is already done. The wires coming into my house are already robust enough to handle powering an electric vehicle. So are the ones going to your house most likely. So is most of the electrical backbone. Charging an EV is not really worse that running an air conditioner. The rest of the problem is simply adding power plants and back haul wiring and/or solar arrays which would have to happen anyway. We just have to accelerate the pace if we add EVs into the mix.
There literally is no place within a 20 mile radius of my house where I can purchase hydrogen. I can plug an EV into literally every structure I see. EVs have won the day. Get over it.