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Tesla Passes Ford by Market Value

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Re: Tesla Passes Ford by Market Value

#581

Post by peterbonney »

robzyb wrote: post #533
peterbonney wrote: post #482

Former finance professional here: Ford is actually worth 3 times as much as Tesla, once you factor in debt. The total value of the Ford capital structure ("enterprise value") is about 150 billion. When two companies have wildly different capital structures, you have to compare them on enterprise value, not the market cap of their equity. So while I give kudos to Tesla for building a valuable business, it still has a…

[edit]: Current finance professional here. > When two companies have wildly different capital structures, you have to compare them on enterprise value, not the market cap of their equity. So while I give kudos to Tesla for building a valuable business, it still has a long way to go to catch up to Ford. That is not necessarily true. Market cap and enterprise value are two equally valid ways of measuring value or worth…

> However, the interesting thing here is that Tesla has become more 'valuable' than Ford, for this definition of value.

I think it's a very tortured definition of "value", though... I don't have a Bloomberg terminal in front of me anymore to check, but I'm guessing Ford's bonds are generally trading closer to par than zero. In which case the bondholders are telling you they think there is about $100 billion worth of additional value to Ford's business beyond the value of the equity. That's a really big piece of context to this story.

I agree with you in principle that market cap is a perfectly valid metric, but when you're comparing a majority-equity company to a majority-debt company (assuming the bonds are valued as non-distressed assets) it ignores something very, very significant.

Re: Tesla Passes Ford by Market Value

#582

Post by username223 »

qmr wrote: post #525
username223 wrote: post #366

Earlier quoted context omitted.

It's not "personal belongings," it's "personal space." Hot-sheeting happens where sleeping space is extremely limited, like oil drilling camps, but it hasn't taken off among the general population, despite the fact that you only use your bed for around 1/3 of the day. People are willing to pay for their own beds and, frequently, their own apartments or houses, despite the fact that most of that space goes unused most…

Self driving cars are the future, hardly a fad.

Human extinction is definitely the future, eventually. Beyond that, I find it hard to make absolute statements about the future with no evidence or argument.

Re: Tesla Passes Ford by Market Value

#583

Post by emodendroket »

snambi wrote: post #575
emodendroket wrote: post #288

Earlier quoted context omitted.

There's no need to because there are plenty. People did preorder the Focus RS.

Interesting. When did this happen? Was it discounted?

Not even a whole year ago, and, no, it wasn't discounted, it was marked up.

Re: Tesla Passes Ford by Market Value

#584

Post by vectorjohn »

clock_tower wrote: post #572
vectorjohn wrote: post #507

Earlier quoted context omitted.

Driverless cars can take you between train stations and destinations. No magical form of train will come to your house or go to your office. In fact, this is a perfect use case for driverless cars. The problem with trains everywhere is the wasted time not on the train and the million stops along the way.

> No magical form of train will come to your house or go to your office. Yes they will; the magic trains you're thinking of are called streetcars. And, with the oddities in oil and the difficulties of maintaining suburbia, we'll be moving back to dense streetcar suburbs soon enough.

Even buses don't take you door to door. I can't imagine a future where a streetcar is anywhere near as good as self driving cars (possibly paired with mass transit).

Re: Tesla Passes Ford by Market Value

#585

Post by dkrich »

aerovistae wrote: post #578
dkrich wrote: post #544

Earlier quoted context omitted.

The problem with this analysis is that it ignores current valuation. What if somebody offered to sell you 1,000 shares of ford right now for $1 each? Would you buy? Of course you would because you know that the value of one share is much higher than $1. So despite whether you think Ford has room to grow, it's very possible that the market is simply undervaluing it as a company, all things considered- assets, brand va…

But I would only buy the $1 shares because I know the market value is $11. I can see that incontrovertibly. If they offered it at $11 and we were hypothesizing the real value is yet higher still, I would have no way of knowing that the market will soon come to realize the "true value" and increase the price. It would be a gamble of me betting the market comes to realize they've undervalued the company.

Of course. But your original point was that the only thing to consider is future growth potential and because only Tesla has room to grow that it is a better investment than Ford. My point was that regardless of growth prospects, a company can be undervalued and be a great investment if growth stagnates or even goes down.

That is the basic idea behind value investing and what made Warren Buffett the 2nd wealthiest person in the world.

Re: Tesla Passes Ford by Market Value

#586

Post by smelterdemon »

aianus wrote: post #427
simplyluke wrote: post #339

Earlier quoted context omitted.

The dunning kruger effect is super prominent in the tech community's discussions of Tesla. Plenty of other manufactures are doing innovative things with automation, technology, etc. Not to mention most of them can build a higher quality interior/driver experience for far less than what Tesla wants for a Model S

It's 2017 and a $60,000 Audi still won't let you start it up remotely from your phone and run the heater/AC so it's comfortable by the time you leave your house. Seems like the most basic, obvious, easy to implement feature but they still can't manage it. Apparently because it's "illegal in Germany" to have a car running without an operator behind the wheel. What a joke. Tesla will wipe the floor with them.

You can get an aftermarket remote start installed for $150. That's not some innovative feature unique to Tesla

Re: Tesla Passes Ford by Market Value

#587

Post by bischofs »

sxates wrote: post #429
bischofs wrote: post #394

Earlier quoted context omitted.

1. Nope. Are you just pulling numbers from a hat? Nissan sold 14,000 leafs last year, add that to the 24,000 volts and the 8,000 i3s and you get more than the model S. 2. Im saying the current business is minuscule, if we looked at elons promises as gospel (which you apparently do) we would have had a model x three years ago. LGchem and Samsung SDI are more than capable to meet the demand of the current lithium batte…

1. "Tesla delivered over 76,000 vehicles in 2016" [1]. My math may be rusty, but I'm pretty sure I'm right that they're outselling everyone combined with $100k cars. They're tracking to over 100,000 for 2017. 2. Several billion dollars worth of capital investments disagree with you. And what's important isn't the current market, but the future market - these things are growing and production bottlenecks kill growth.…

1. You are comparing all of tesla models to individual models from other brands

2. You want to speculate on the future market, go ahead, I dont think Tesla has any special position on lithium batteries.

3. Solar is not a hockey stick, not sure what trend lines you are talking about.

4. Talk to anyone working on self driving cars and they will tell you level 5 is at least 10 years away. Can a tesla drive on icey road in northern canada in blizzard conditions with a couple failed sensors? Nope, then it is not level 5.

Re: Tesla Passes Ford by Market Value

#588

Post by aianus »

smelterdemon wrote: post #586
aianus wrote: post #427

Earlier quoted context omitted.

It's 2017 and a $60,000 Audi still won't let you start it up remotely from your phone and run the heater/AC so it's comfortable by the time you leave your house. Seems like the most basic, obvious, easy to implement feature but they still can't manage it. Apparently because it's "illegal in Germany" to have a car running without an operator behind the wheel. What a joke. Tesla will wipe the floor with them.

You can get an aftermarket remote start installed for $150. That's not some innovative feature unique to Tesla

With always-on 3G connectivity and a corresponding app? Link?

I know it's not very innovative but if the incumbents can't even do this then how are they going to leapfrog Tesla at, say, self driving?

Re: Tesla Passes Ford by Market Value

#589

Post by seanmcdirmid »

iamacynic wrote: post #523
seanmcdirmid wrote: post #458

Earlier quoted context omitted.

How many years does Ford have record breaking sales? It happens more often than you'd think and doesn't really prove much.

do you run a business? if not, keep it that way.

Ad hominens are not appreciated on HN.

Re: Tesla Passes Ford by Market Value

#590

Post by skybrian »

peterbonney wrote: post #573
skybrian wrote: post #568

Earlier quoted context omitted.

It seems strange to ignore the terms agreed to when raising money. A company that raises money via loans typically has more obligations than one that raises money via equity. Doesn't the option value for repayment count for anything?

> It seems strange to ignore the terms agreed to when raising money. I'm not sure what you mean by this - can you clarify? > A company that raises money via loans typically has more obligations than one that raises money via equity. Doesn't the option value for repayment count for anything? Certainly the equity of a highly indebted company will behave differently than the equity of a debt-free company. But "different…

Interesting. Yes, tolerance for risk varies with each investor, but isn't there supposed to be a consensus way that the market prices risk, on average? I'm just throwing out terminology here, but what about "risk-adjusted return"? Other things being equal (which they never are), prices should be lower for higher-risk investments, to compensate for the risk taken.

So I'm wondering how enterprise value prices risk compared to market value.

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