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Tesla Passes Ford by Market Value

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Re: Tesla Passes Ford by Market Value

#591

Post by peterbonney »

skybrian wrote: post #590
peterbonney wrote: post #573

Earlier quoted context omitted.

> 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 comp…

> isn't there supposed to be a consensus way that the market prices risk, on average?

Consensus on the price of risk, yes. Consensus on risk preferences, no. :) I.e. two people can agree that a one year US Treasury Bill paying 0.50% interest is worth exactly par, and yet come to completely different conclusions about whether they want to own it at that price.

I.e. you're absolutely right about achieving a consensus on how to value an asset, but people's differing risk preferences are a major reason we have markets in the first place - it's not just zero-sum wagering on what will go up and what will go down.

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

To the extent a company has debt, the risk (and expected return) of its equity will always be higher than the risk (and expected return) of an identical company without debt: the equity holders have levered up by borrowing and magnified their risk and potential return. I don't know if that answers your question or not, though.

Re: Tesla Passes Ford by Market Value

#592

Post by astrange »

unlmtd wrote: post #62

If I actually trusted the derivative counterparties to remain solvent, I'd reopen a trading to put a long short strategy on this. Everybody seems so have missed the glaring fact that the electric transport isn't going to go anywhere; the lucky ones will have good bi/tricycles, or horse/mules and cart. Motorized transport wasn't a product of humanity's sheer desire for it! It was only caused by the incomparably immens…

Are there any public ebike companies?

Re: Tesla Passes Ford by Market Value

#593

Post by kirillzubovsky »

ovulator wrote: post #119
dsugarman wrote: post #55

Earlier quoted context omitted.

Tesla is potentially a trillion dollar company and it's biggest current hurdle is getting it's production up to meet an enormous demand. The reason it's trading at a higher market cap is because Ford doesn't have any growth potential and Tesla is still trading at a fraction of what it could be. Of course there is still a ton of risk factors for them, but expected value for investing should be based on the chance of s…

What are you basing that trillion dollar evaluation off of? Combining the 5 largest auto manufactures on earth and you are still well short of a trillion dollar company.

Ha! I just wrote about it this morning. Tesla's potential is not in the car business as we used to know it, but in the way it's going to play out in the next decade. Based on everything happening right now, it's not an IF but WHEN kind of question. Here, some detailed thoughts : http://kirillzubovsky.com/what-is-tesla-really/

Re: Tesla Passes Ford by Market Value

#594

Post by kirillzubovsky »

dan1234 wrote: post #2

Interesting, but market cap isn’t everything - FTA: "While Tesla’s market capitalization has swelled in size, Ford still overshadows the Palo Alto, California-based company in most other financial metrics. Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Last year, Ford had annual revenue of $151.8 billion compared with Tesla’s $7 billion. And when it comes…

It's not about the number of cars that Tesla can sell today, and it's not even about the cars it will sell in the next decade, it's about the market domination a decade from now, and I see Tesla as a clear-cut winner. A few concrete thoughts here - http://kirillzubovsky.com/what-is-tesla-really/

Re: Tesla Passes Ford by Market Value

#595

Post by officelineback »

Spooky23 wrote: post #441
tbabb wrote: post #369

Earlier quoted context omitted.

> The "mobility" market will be about the size of the taxi, bus, and train market. - A personal, individual vehicle which comes to pick you up where you are and take you to exactly where you want to go is a much MUCH higher value proposition than public transit. - Add self-driving to the mix, and the cost of that service will plummet. - When the car providing that service can drive itself, then there is little to no…

This is a common pattern to electric and self-driving enthusiasts, but unfortunately it's the automotive equivalent of Wired articles about the internet circa 1996. Problems include: - Cost. All of the (limited) Tesla automation technologies cost more than my last car. - Liability. Who is liable for mishaps? As Uber has demonstrated accidents and traffic violations happen with automated tech. - Utility. The majority…

Good point. Cars will still be valuable for road trips, but lots and lots of people will choose to skip car ownership and just settle for local, self-driving travel.

Maybe there will be a stratified market for rental self-driving cars; one for "just this trip" and another for "five days of exclusive use for a road trip."

Re: Tesla Passes Ford by Market Value

#596

Post by officelineback »

wang_li wrote: post #371
Certhas wrote: post #309

Earlier quoted context omitted.

> 's valuation is also based on the idea that clean energy will replace fossil fuels. Last month Tesla sold 10,000 electric vehicles to Fords 2,500. If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. The entire technology platform on which these 6,7 million Ford sales rest is about to be swapped out in little over a decade. [1] https://arstechnica.c…

> If we are serious about climate change, then sometime in the 2030s [1] we have to stop building new combustion engines. Or there might be a breakthrough in carbon capture, converting atmospheric CO2 into petroleum and we can drive combustion engines forever. CO2 capture is an area of active research and it's entirely possible that advances there will make Tesla and Solar City moot.

Isn't vegetation essentially a form of carbon capture, and it's not nearly effective enough to keep up with human CO2 emissions?

Re: Tesla Passes Ford by Market Value

#597

Post by kirillzubovsky »

Hydraulix989 wrote: post #272
dan1234 wrote: post #2

Interesting, but market cap isn’t everything - FTA: "While Tesla’s market capitalization has swelled in size, Ford still overshadows the Palo Alto, California-based company in most other financial metrics. Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Last year, Ford had annual revenue of $151.8 billion compared with Tesla’s $7 billion. And when it comes…

Meanwhile, this very same day, another article topped HN: "Ford tops list of automated driving leaders in Navigant study. Tesla ranks 12th" https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto... Like parent said, market cap isn't everything.

There's no such thing as "independent research." Any article like that is always paid for by the company that ends up "leading" in it; that's how these research companies make their money.

I worked for this lovely company once where we paid hundreds of thousands of dollars to a consulting company to "research" how we were the dopest, only to have pretty much written the entire document for them. Go figure...

Re: Tesla Passes Ford by Market Value

#598

Post by kirillzubovsky »

kirillzubovsky wrote: post #597
Hydraulix989 wrote: post #272

Earlier quoted context omitted.

Meanwhile, this very same day, another article topped HN: "Ford tops list of automated driving leaders in Navigant study. Tesla ranks 12th" https://techcrunch.com/2017/04/03/ford-tops-the-list-of-auto... Like parent said, market cap isn't everything.

There's no such thing as "independent research." Any article like that is always paid for by the company that ends up "leading" in it; that's how these research companies make their money. I worked for this lovely company once where we paid hundreds of thousands of dollars to a consulting company to "research" how we were the dopest, only to have pretty much written the entire document for them. Go figure...

ps. From that TC article: "Ford has already responded to their position in the study, with a Medium post from CTO Raj Nair expressing their satisfaction at being ranked number one. " -- if this doesn't read like a pre-plan PR, I don't know what does.

Re: Tesla Passes Ford by Market Value

#599

Post by clock_tower »

vectorjohn wrote: post #584
clock_tower wrote: post #572

Earlier quoted context omitted.

> 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).

Are you familiar with streetcar suburbs? They'd have a streetcar running along a commercial street, with residential streets branching off from it; typically one would have a walk of a few blocks from streetcar stop to house. I don't know if a return to that pattern is the future I expect, but it's certainly the one I'm hoping for.

Re: Tesla Passes Ford by Market Value

#600

Post by kirillzubovsky »

John23832 wrote: post #7
adamnemecek wrote: post #4

Earlier quoted context omitted.

Investors invest based on promise of future value. How much is Ford expected to grow?

If they can properly pivot into the electric car market, a lot. Ford has all the infrastructure that Tesla is attempting to build now (aside from the batteries, but that is something that Ford could easily partner with another manufacture to get). They know how to mass produce cars (granted right now, ICE cars). That's not an easy feat. They have a large manufacturing and maintenance base that, frankly, Tesla can't r…

Tesla has already figured out how to mass produce cars. The move between 200k cars and 200,000,000 cars is hard, but not rocket-science hard, and they can always hire the right people to help. But can Ford figure out how to make cars that drive themselves at 80mph on highway? Having driven in Ford cars, I don't believe they can. They can barely figure out how to make a radio control panel that doesn't suck.
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