I'm sure Elon Musk doesn't care about whether you want to invest in his company or not.
Actually, he does, though he's much more concerned about the institutions who own the bulk of TSLA. Because if the stock price drops enough then he'll be margin called on the loans he took out against his shares. He'll be forced to sell his own position in the company. It'll be an interesting show to watch. Six or so institutions, along with Musk, own ~75% of the shares. Once one of them gets spooked enough by the deteriorating financials and starts dumping, that could trigger the others to start dumping, which at some point could trigger a margin call against Musk's shares. On the other side, you have largest position by short sellers of any company, who at some point will have to buy shares to cover their position, pushing the price up. Even Enron took a while to go to 0.
True! Just look at Musk. He's borrowed hundreds of millions of dollars against his Tesla shares to maintain his jet-setting lifestyle. He doesn't have to pay taxes on it and he doesn't risk upsetting the house of cards by selling shares and spooking others to sell.
I never understood companies that paid dividends instead of paying off their loans. The only reason to do that is if you expect to go bankrupt and want to drain the company of assets.
Apple has about $100B in debt and pays out a dividend. Are they about to go bankrupt?
It makes perfect sense for a company to use debt for financing in this era of historically low interest rates. If they don't have the cash flow to service that debt(see Tesla) then it becomes a problem.
"Everyone loves to compare Tesla to GM or Ford as if they are good companies. Don't forget GM actually *did* go bankrupt in 2009 (and Ford nearly did). As for debt, check out GM's and Ford's balance sheets. GM is carrying $99B of debt, and Ford is carrying $158B (per Yahoo Finance)."
Ford and GM have billions in the bank. Their revenues are many times more than Tesla's. They pay a dividend. You can't compare outstanding debt between Tesla and them. The only reason Tesla is compared to Ford or GM at all is because of its ludicrous market cap.
Dunno about gas prices in your country or how much you drive, but here in America $22k worth of gas will get over 200k miles out of any car with decent gas mileage.
When making the argument on costs of mileage between gasoline and BEVs, people tend to forget to factor in the cost of a new battery for the BEV.
For lending Tesla $1,000 at 0% interest and using you to advertise an artificial "reservation count". In turn, helping lift the stock price so Elon could borrow hundreds of millions against it while insiders(like brother Kimbal) could cash out at a crazy valuation. Feel honored, the last time Musk thanked the shareholders was when they bailed him and other insiders out by tying the failing SolarCity albatross to Tesla's neck. The question now is, who's going to bail out Tesla?
Keep this in mind depositors; in a bankruptcy you are an unsecured creditor. And given that the Fremont plant was just put up for collateral, there will be very little(if any) left once the secured creditors are paid.
The one thing that really sets Tesla apart is their heavy use of bundling.
The one thing that sets Tesla apart is that there is no $35K Model 3. It's complete vaporware and can not be bought. People were suckered into giving Tesla an interest free $1,000 loan thinking they'd get a $35K Model 3 with the $7.5K tax credit, all to get as high of a reservation count for Musk to crow about and push the stock price ever higher.
A reservation count that when probed a bit and asked by an analyst about the actual conversion rate when a holder is asked to configure, Musk prefixed his response with a full 15 seconds of silence before saying the question was, "too dry" and decided to spend the next 20 minutes allowing a dozen questions by a YouTube fan boy with a whole 51 shares to his name. It doesn't take Freud to know that the truth was something not supportive of the narrative Musk is trying to push.
I recommend people listen to the archived 1Q18 conference call, including the two previous. If you're not an investor they are very amusing. If you are then they scream run for the exits. It's fun to go back and read Musk's comments about, "productizing the factory", listen to him rant about "stepped exponential production" curves and "air friction" being a potential limiter, and then read his short tweet admitting that he has no idea what he's doing and wasted billions of investor dollars trying to over automate final assembly. It's too bad we're not going to have too many more calls to laugh at.
Matthew Schwall, director of field performance engineering, has left Tesla to go work for Waymo. He was the contact point for safety regulators. A role that has perhaps more stressful given the multiple investigations going on regarding accidents. Petty soon it'll just be Musk and his cyber dragon.
Roger Easton is a better candidate see https://en.wikipedia.org/wiki/...
As I recall both the Navy and the Air Force had different ideas for a GPS system. Eventually the Navy version was selected and the Air Force was chosen to manage it. The Air Force system as I recall involved a mix of low orbiting satelites and geo-syncronous ones.
I'd mod this up if I had points. Roger Easton is the inventor of GPS and a better pick for this award.
On second thought, maybe the fact that Parkinson is still alive might have some bearing on who won the award.
Roger Easton is a better candidate see https://en.wikipedia.org/wiki/...
As I recall both the Navy and the Air Force had different ideas for a GPS system. Eventually the Navy version was selected and the Air Force was chosen to manage it. The Air Force system as I recall involved a mix of low orbiting satelites and geo-syncronous ones.
I'd mod this up if I had points. Roger Easton is the inventor of GPS and a better pick for this award.
It's always a tragedy to see your project, the one you raised from zero and cared for, be deeply fucked in the ass by a faceless corporation.
Much like when your daughter gets married...
I'm sure billions of dollars eases the butt hurt. But really, why is one surprised when someone wants to buy your project for a fortune and they then want to monetize it?
The Model S/X battery packs are 'overbuilt' in comparison to cheaper BEVs. When new, the BMS never completely discharges(and may never completely charge) the cells to help preserve them. Don't expect the Model 3 battery packs to last as long since it's a less expensive vehicle. It's also the reason Tesla made sure to state warranty for the battery pack in Model 3 only applies if the battery pack loses over 70% of its capacity with in the warranty period. Of course, who knows what entity may be around to service that warranty in a few years.
Both for their cars and their factory. They're getting sued for their FSD fraud, and they've wasted time and money over auto mating their Fremont factory for the Model 3 line. Now Musk is going to have a 24/7 shift for the Model 3 line. How ever close they were to positive margins on the $60K Model 3 have now become that much more elusive. And the $35K Model 3? Phffft.
Tesla will end up merging with or being bought by a car maker. It's the smart thing to do. Tesla's got the software. They have everything else. The Liliputians didn't rule the day either.
Even if Tesla's market cap falls to $5B(less than $30 a share, assuming no further dilution), nobody will buy it given its $24B in liabilities. Assets will be sold piecemeal after reorg.
I know, right! The Model 3 is already the best selling (as in actual deliveries) EV. It also outsells similarly priced 4-door ICE competitors like the Acura TLX, Mercedes C/CLA, Audi A4, Lexus RC, and the BMW 2, 3, and 4 series.
I fully expect WSJ articles soon with articles like "Tesla Manufacturing Impacted by Maintenance: Robot 127E was taken down for maintenance during the second shift at the Tesla factory in Freemont, California during the second shift today. Production was adversely impacted with 7 fewer Model 3's produced than expected while capacitor C12 was replaced..."
This argument is flawed. The other manufacturers have model variances to spread their buyers among. Tesla has just three.
Neither company makes a net profit, however Tesla is apparently worthy more in spite of have less than a tenth of the income. It's overpriced.
Huh? GM's EPS is $5.15 and at its current share price pays a dividend with a 3.87% yield. Tesla has the dubious honor of increasing its losses per share even as share dilution increases.
Elon Musk, on the Model 3 production, 2017: "So -- but what people should absolutely have zero concern about, zero, is that Tesla will achieve a 10,000-unit production week by the end of next year."
Elon Musk, 2012: "The electricity used by the Supercharger comes from a solar carport system provided by SolarCity, which results in almost zero marginal energy cost after installation. Combining these two factors, Tesla is able to provide Model S owners free long distance travel indefinitely. () The Supercharger system will always generate more power from sunlight than Model S customers use for driving."
Elon Musk, 2013: "Model S is designed to allow a fast battery swap, exchanging your battery for a fully charged battery in less than half the time it takes to refill a gas tank. () Hopefully, this is what convinces people finally that electric cars are the future."
Elon Musk, 2014: "I am confident in the German consumer. I bet that from the end of 2014 onwards, we can sell 10,000 cars in Germany annually () By the end of 2014, we'll have 25 German Service Centres () We'll have 200 maybe 300 cars per week going to Germany (10,400 to 15,600 annually)."
Elon Musk, 2014: "I expect that in the long run, Tesla will build a battery factory in Germany."
Elon Musk, 2015: "The response has been overwhelming, OK, like crazy. In the course of like less than a week, we've had 38,000 reservations for the Powerwall, 2,500 reservations for Powerpack. So, it's like crazy off the hook. Yeah. And it seems to have gone super viral."
Elon Musk, 2015: "I don't want to sort of name specific suppliers, but our biggest challenges are with the second row seat, which is, it's an amazing seat, like a sculptural work of art, but a very tricky thing to get right. The falcon-wing door actually seems to probably not be a critical path item."
Elon Musk, 2015: "We should be able to do 90 percent of miles driven within three years," Elon Musk told the Financial Times in 2013, "The problem with Google's current approach (LIDAR among other sensors) is that the sensor system is too expensive," Musk said. "It's better to have an optical system, basically cameras with software that is able to figure out what's going on just by looking at things."
Elon Musk, 2016: "If you're in New York and the car's in Los Angeles, you can summon your car to you from your phone and tell the car to find you. It'll automatically charge itself along the journey () I might be slightly optimistic on that, but I don't think significantly optimistic that we can do that in two years"
Elon Musk, 2016: "We plan to fund about $1.5 billion in capital expenditures without accessing any outside capital other than our existing sources that support our leasing and finished goods inventory."
Elon Musk, 2016: "So as a rough guess, I would say we would aim to produce 100,000 to 200,000 Model 3s in the second half of next year. That's my expectation right now. Yeah, so that's the thing. () The date we are setting with suppliers to get to a volume production capability with the Model 3 is July 1 next year."
Elon Musk, 2016: "The probability of having an accident is 50 percent lower if you have Autopilot on () Even with our first version, it's almost twice as good as a person."
Elon Musk, 2016: "With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid. () Culturally, this is a great fit."
Elon Musk, 2016: Musk told analysts the company's current plan "does not require any capital raise for the Model 3 at all."
I don't think that it's good to view those deposits as being risk free as the bankruptcy court may not agree to give the money back.
The deposits weren't put into an escrow account. They were fed into Tesla's massive cash incinerator. As such, deposit holders are unsecured creditors and stand behind secured creditors in a bankruptcy. Among the unsecured creditors, there is priority, and its not clear where deposit holders fall. Given the relatively small amount each Model 3 depositor paid, a bankruptcy judge may pay them out first. However, given that manufacturing assets are traditionally worth pennies on the dollar in a bankruptcy(even the "Alien Dreadnought" type), the secured creditors may take all, leaving deposit holders with nothing.
Slashdot Mirror
Hey, it worked for circuses for years. Why not car production?
It's very appropriate; Tesla is quite the circus of a company.
I'm sure Elon Musk doesn't care about whether you want to invest in his company or not.
Actually, he does, though he's much more concerned about the institutions who own the bulk of TSLA. Because if the stock price drops enough then he'll be margin called on the loans he took out against his shares. He'll be forced to sell his own position in the company. It'll be an interesting show to watch. Six or so institutions, along with Musk, own ~75% of the shares. Once one of them gets spooked enough by the deteriorating financials and starts dumping, that could trigger the others to start dumping, which at some point could trigger a margin call against Musk's shares. On the other side, you have largest position by short sellers of any company, who at some point will have to buy shares to cover their position, pushing the price up. Even Enron took a while to go to 0.
as debts have tax benefits,
True! Just look at Musk. He's borrowed hundreds of millions of dollars against his Tesla shares to maintain his jet-setting lifestyle. He doesn't have to pay taxes on it and he doesn't risk upsetting the house of cards by selling shares and spooking others to sell.
I never understood companies that paid dividends instead of paying off their loans. The only reason to do that is if you expect to go bankrupt and want to drain the company of assets.
Apple has about $100B in debt and pays out a dividend. Are they about to go bankrupt? It makes perfect sense for a company to use debt for financing in this era of historically low interest rates. If they don't have the cash flow to service that debt(see Tesla) then it becomes a problem.
"Everyone loves to compare Tesla to GM or Ford as if they are good companies. Don't forget GM actually *did* go bankrupt in 2009 (and Ford nearly did). As for debt, check out GM's and Ford's balance sheets. GM is carrying $99B of debt, and Ford is carrying $158B (per Yahoo Finance)."
Ford and GM have billions in the bank. Their revenues are many times more than Tesla's. They pay a dividend. You can't compare outstanding debt between Tesla and them. The only reason Tesla is compared to Ford or GM at all is because of its ludicrous market cap.
Dunno about gas prices in your country or how much you drive, but here in America $22k worth of gas will get over 200k miles out of any car with decent gas mileage.
When making the argument on costs of mileage between gasoline and BEVs, people tend to forget to factor in the cost of a new battery for the BEV.
For lending Tesla $1,000 at 0% interest and using you to advertise an artificial "reservation count". In turn, helping lift the stock price so Elon could borrow hundreds of millions against it while insiders(like brother Kimbal) could cash out at a crazy valuation. Feel honored, the last time Musk thanked the shareholders was when they bailed him and other insiders out by tying the failing SolarCity albatross to Tesla's neck. The question now is, who's going to bail out Tesla?
Keep this in mind depositors; in a bankruptcy you are an unsecured creditor. And given that the Fremont plant was just put up for collateral, there will be very little(if any) left once the secured creditors are paid.
The one thing that really sets Tesla apart is their heavy use of bundling.
The one thing that sets Tesla apart is that there is no $35K Model 3. It's complete vaporware and can not be bought. People were suckered into giving Tesla an interest free $1,000 loan thinking they'd get a $35K Model 3 with the $7.5K tax credit, all to get as high of a reservation count for Musk to crow about and push the stock price ever higher.
A reservation count that when probed a bit and asked by an analyst about the actual conversion rate when a holder is asked to configure, Musk prefixed his response with a full 15 seconds of silence before saying the question was, "too dry" and decided to spend the next 20 minutes allowing a dozen questions by a YouTube fan boy with a whole 51 shares to his name. It doesn't take Freud to know that the truth was something not supportive of the narrative Musk is trying to push.
I recommend people listen to the archived 1Q18 conference call, including the two previous. If you're not an investor they are very amusing. If you are then they scream run for the exits. It's fun to go back and read Musk's comments about, "productizing the factory", listen to him rant about "stepped exponential production" curves and "air friction" being a potential limiter, and then read his short tweet admitting that he has no idea what he's doing and wasted billions of investor dollars trying to over automate final assembly. It's too bad we're not going to have too many more calls to laugh at.
The amusement rides and hats might be the only thing he can make a profit on. Carnival barker, indeed!
Matthew Schwall, director of field performance engineering, has left Tesla to go work for Waymo. He was the contact point for safety regulators. A role that has perhaps more stressful given the multiple investigations going on regarding accidents. Petty soon it'll just be Musk and his cyber dragon.
Roger Easton is a better candidate see https://en.wikipedia.org/wiki/... As I recall both the Navy and the Air Force had different ideas for a GPS system. Eventually the Navy version was selected and the Air Force was chosen to manage it. The Air Force system as I recall involved a mix of low orbiting satelites and geo-syncronous ones.
I'd mod this up if I had points. Roger Easton is the inventor of GPS and a better pick for this award.
On second thought, maybe the fact that Parkinson is still alive might have some bearing on who won the award.
Roger Easton is a better candidate see https://en.wikipedia.org/wiki/... As I recall both the Navy and the Air Force had different ideas for a GPS system. Eventually the Navy version was selected and the Air Force was chosen to manage it. The Air Force system as I recall involved a mix of low orbiting satelites and geo-syncronous ones.
I'd mod this up if I had points. Roger Easton is the inventor of GPS and a better pick for this award.
It's always a tragedy to see your project, the one you raised from zero and cared for, be deeply fucked in the ass by a faceless corporation. Much like when your daughter gets married...
I'm sure billions of dollars eases the butt hurt. But really, why is one surprised when someone wants to buy your project for a fortune and they then want to monetize it?
Pretty soon Elon will be wearing all the hats. Or maybe he'll assign his cyborg dragon to fill some of the roles.
The Model S/X battery packs are 'overbuilt' in comparison to cheaper BEVs. When new, the BMS never completely discharges(and may never completely charge) the cells to help preserve them. Don't expect the Model 3 battery packs to last as long since it's a less expensive vehicle. It's also the reason Tesla made sure to state warranty for the battery pack in Model 3 only applies if the battery pack loses over 70% of its capacity with in the warranty period. Of course, who knows what entity may be around to service that warranty in a few years.
Because people are really stupid. Really stupid. People loan the government money tax-free and celebrate when they get a "refund" on their taxes.
At least there's no risk of the government going bankrupt and you being stuck as an unsecured creditor.
Both for their cars and their factory. They're getting sued for their FSD fraud, and they've wasted time and money over auto mating their Fremont factory for the Model 3 line. Now Musk is going to have a 24/7 shift for the Model 3 line. How ever close they were to positive margins on the $60K Model 3 have now become that much more elusive. And the $35K Model 3? Phffft.
Tesla will end up merging with or being bought by a car maker. It's the smart thing to do. Tesla's got the software. They have everything else. The Liliputians didn't rule the day either.
Even if Tesla's market cap falls to $5B(less than $30 a share, assuming no further dilution), nobody will buy it given its $24B in liabilities. Assets will be sold piecemeal after reorg.
I know, right! The Model 3 is already the best selling (as in actual deliveries) EV. It also outsells similarly priced 4-door ICE competitors like the Acura TLX, Mercedes C/CLA, Audi A4, Lexus RC, and the BMW 2, 3, and 4 series.
I fully expect WSJ articles soon with articles like "Tesla Manufacturing Impacted by Maintenance: Robot 127E was taken down for maintenance during the second shift at the Tesla factory in Freemont, California during the second shift today. Production was adversely impacted with 7 fewer Model 3's produced than expected while capacitor C12 was replaced..."
This argument is flawed. The other manufacturers have model variances to spread their buyers among. Tesla has just three.
There is nothing trivial when a car company which took prepaid orders is years late.
And takes orders for a $35K version that'll never be produced.
It is a swindle.
Indeed. Swindled to provide an interest-free loan that one may get back if the company goes bankrupt.
Neither company makes a net profit, however Tesla is apparently worthy more in spite of have less than a tenth of the income. It's overpriced.
Huh? GM's EPS is $5.15 and at its current share price pays a dividend with a 3.87% yield. Tesla has the dubious honor of increasing its losses per share even as share dilution increases.
They must need to shut shut down the line to let those robots cool off from that air friction!
And one of my favorites...
Elon Musk, on the Model 3 production, 2017: "So -- but what people should absolutely have zero concern about, zero, is that Tesla will achieve a 10,000-unit production week by the end of next year."
Musk says a lot of things:
Elon Musk, 2012: "The electricity used by the Supercharger comes from a solar carport system provided by SolarCity, which results in almost zero marginal energy cost after installation. Combining these two factors, Tesla is able to provide Model S owners free long distance travel indefinitely. () The Supercharger system will always generate more power from sunlight than Model S customers use for driving."
Elon Musk, 2013: "Model S is designed to allow a fast battery swap, exchanging your battery for a fully charged battery in less than half the time it takes to refill a gas tank. () Hopefully, this is what convinces people finally that electric cars are the future."
Elon Musk, 2014: "I am confident in the German consumer. I bet that from the end of 2014 onwards, we can sell 10,000 cars in Germany annually () By the end of 2014, we'll have 25 German Service Centres () We'll have 200 maybe 300 cars per week going to Germany (10,400 to 15,600 annually)."
Elon Musk, 2014: "I expect that in the long run, Tesla will build a battery factory in Germany."
Elon Musk, 2015: "The response has been overwhelming, OK, like crazy. In the course of like less than a week, we've had 38,000 reservations for the Powerwall, 2,500 reservations for Powerpack. So, it's like crazy off the hook. Yeah. And it seems to have gone super viral."
Elon Musk, 2015: "I don't want to sort of name specific suppliers, but our biggest challenges are with the second row seat, which is, it's an amazing seat, like a sculptural work of art, but a very tricky thing to get right. The falcon-wing door actually seems to probably not be a critical path item."
Elon Musk, 2015: "We should be able to do 90 percent of miles driven within three years," Elon Musk told the Financial Times in 2013, "The problem with Google's current approach (LIDAR among other sensors) is that the sensor system is too expensive," Musk said. "It's better to have an optical system, basically cameras with software that is able to figure out what's going on just by looking at things."
Elon Musk, 2016: "If you're in New York and the car's in Los Angeles, you can summon your car to you from your phone and tell the car to find you. It'll automatically charge itself along the journey () I might be slightly optimistic on that, but I don't think significantly optimistic that we can do that in two years"
Elon Musk, 2016: "We plan to fund about $1.5 billion in capital expenditures without accessing any outside capital other than our existing sources that support our leasing and finished goods inventory."
Elon Musk, 2016: "So as a rough guess, I would say we would aim to produce 100,000 to 200,000 Model 3s in the second half of next year. That's my expectation right now. Yeah, so that's the thing. () The date we are setting with suppliers to get to a volume production capability with the Model 3 is July 1 next year."
Elon Musk, 2016: "The probability of having an accident is 50 percent lower if you have Autopilot on () Even with our first version, it's almost twice as good as a person."
Elon Musk, 2016: "With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid. () Culturally, this is a great fit."
Elon Musk, 2016: Musk told analysts the company's current plan "does not require any capital raise for the Model 3 at all."
I don't think that it's good to view those deposits as being risk free as the bankruptcy court may not agree to give the money back.
The deposits weren't put into an escrow account. They were fed into Tesla's massive cash incinerator. As such, deposit holders are unsecured creditors and stand behind secured creditors in a bankruptcy. Among the unsecured creditors, there is priority, and its not clear where deposit holders fall. Given the relatively small amount each Model 3 depositor paid, a bankruptcy judge may pay them out first. However, given that manufacturing assets are traditionally worth pennies on the dollar in a bankruptcy(even the "Alien Dreadnought" type), the secured creditors may take all, leaving deposit holders with nothing.