Why Tesla Is Worth More Than GM
technologyreview.com
Why Tesla Is Worth More Than GM
1–10 of 55 posts
Re: Why Tesla Is Worth More Than GM
#2A minor point, but "...because of things like online shopping, which has put hundreds of thousands of retail workers out of a job."
Makes me wonder... the method of product selection and delivery have changed from in store browsing and carry out, to online browsing and delivery. Instead of sales personnel and cashiers, it involves warehousing (to a larger degree) and delivery vehicles. Employment in sales/cashiers therefore would drop, while employment in warehouses and delivery companies would have increased.
What are the relative ratios? For every x retail jobs lost, how many y 'logistics' jobs are created? Once automatic warehouses and autonomous vehicles are pervasive, is it a 100% loss?
Re: Why Tesla Is Worth More Than GM
#3A minor point, but "...because of things like online shopping, which has put hundreds of thousands of retail workers out of a job." Makes me wonder... the method of product selection and delivery have changed from in store browsing and carry out, to online browsing and delivery. Instead of sales personnel and cashiers, it involves warehousing (to a larger degree) and delivery vehicles. Employment in sales/cashiers th…
Employment in warehouses stays unchanged, because people are not buying more. They don't have more money to spend just by switching to online browsing.
Re: Why Tesla Is Worth More Than GM
#4A minor point, but "...because of things like online shopping, which has put hundreds of thousands of retail workers out of a job." Makes me wonder... the method of product selection and delivery have changed from in store browsing and carry out, to online browsing and delivery. Instead of sales personnel and cashiers, it involves warehousing (to a larger degree) and delivery vehicles. Employment in sales/cashiers th…
I suspect it's really difficult to an exhaustive analysis required to see the full implications. It's easy to say 'this shop has seen foot count fall and when we interview people this is why they say they come less' (though with all of the problems such surveys entail), but it's less easy to see the magnitudes involved in the full pipeline - e.g. delivery workers who now deliver to customers instead of shops.
It ends up being more productive to look at much broader economic data, but that allows you less ability to drill into the specifics because you are looking at a much larger population, and have less ability to derive why something occurred.
Re: Why Tesla Is Worth More Than GM
#5A minor point, but "...because of things like online shopping, which has put hundreds of thousands of retail workers out of a job." Makes me wonder... the method of product selection and delivery have changed from in store browsing and carry out, to online browsing and delivery. Instead of sales personnel and cashiers, it involves warehousing (to a larger degree) and delivery vehicles. Employment in sales/cashiers th…
Employment in warehouses stays unchanged, because people are not buying more. They don't have more money to spend just by switching to online browsing.
Deliveries surely require more people though? Delivering to a store is less efficient than delivering to 100 houses.
Re: Why Tesla Is Worth More Than GM
#6Earlier quoted context omitted.
Employment in warehouses stays unchanged, because people are not buying more. They don't have more money to spend just by switching to online browsing.
Deliveries surely require more people though? Delivering to a store is less efficient than delivering to 100 houses.
You are cutting out the requirement to build/lease a store and operate it - I suspect you could buy/lease and operate a lot of vans for the costs of a store.
Re: Why Tesla Is Worth More Than GM
#7A minor point, but "...because of things like online shopping, which has put hundreds of thousands of retail workers out of a job." Makes me wonder... the method of product selection and delivery have changed from in store browsing and carry out, to online browsing and delivery. Instead of sales personnel and cashiers, it involves warehousing (to a larger degree) and delivery vehicles. Employment in sales/cashiers th…
Employment in warehouses stays unchanged, because people are not buying more. They don't have more money to spend just by switching to online browsing.
I'm not sure this is true. Online prices tend to be lower than in store. So the cost of goods overall is lower and consumers effectively can buy more items.
Also, when considering retail, the shipments from warehouse to store are in bulk, whereas shipments direct to consumer are small numbers of discrete items, which requires more handling for picking, packing and shipping.
Re: Why Tesla Is Worth More Than GM
#8Earlier quoted context omitted.
Employment in warehouses stays unchanged, because people are not buying more. They don't have more money to spend just by switching to online browsing.
I'm not sure this is true. Online prices tend to be lower than in store. So the cost of goods overall is lower and consumers effectively can buy more items. Also, when considering retail, the shipments from warehouse to store are in bulk, whereas shipments direct to consumer are small numbers of discrete items, which requires more handling for picking, packing and shipping.
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Re: Why Tesla Is Worth More Than GM
#9It is just not true that Tesla is worth more than GM in the common understanding of that. The real answer to "Why Tesla is Worth More Than GM" is one sentence: GM has more debt than Tesla.
People understand (and the article gives reasons why) "worth more than" to be that the GM brands + factories + assets + future prospects are worth less than Tesla brands + Tesla factories + Tesla assets + Tesla future prospects. But this is not true in actuality. This is because Tesla is worth more than GM based on Market Capitalization, not Enterprise Value. The difference between these companies is that GM has $51B in net debt while Tesla has $2.6b.
If GM wanted to be "worth more than Tesla" (using market cap), they could do it tomorrow by issuing $51B in new stock and paying off their debt. Why doesn't GM do this? Because they actually believe their stock is undervalued, and would rather buy their own stock than sell it.
Debt (leverage) is different across different companies. If you aren't familiar with how different debt levels affect the market cap, the following pages are worth a read:
https://medium.com/@ruzbehb/tesla-is-not-valued-at-more-than...
http://www.investopedia.com/exam-guide/cfa-level-1/corporate...
Re: Why Tesla Is Worth More Than GM
#10> What’s more, where GM’s production led to eight jobs in its supply chain for every one person it employed directly, the ripple effects of the Big Five’s businesses, with the exception of Apple, are much smaller.
Would Amazon's ripple effect be pretty big too? All the products it sells have manufacturers (who have employees). Or is it better described by disintermediation, where a product that is sold via Amazon now would have been sold via brick & mortar before?