Tesla Is Doing Much Better Than Headlines Suggest • Hacker News Board

Re: Tesla Is Doing Much Better Than Headlines Suggest

#31

Post by w1 » Mon, Oct 15, 2018, 6:56 PM UTC

amarka wrote: post #27

bfwi wrote: post #15

Earlier quoted context omitted.

The CEO has shown willingness to fund Tesla Motors and SpaceX with almost all his personal funds. If I remember correctly, he is worth more than Tesla's debt, and unless he is somehow unable to liquidate enough assets to cover that debt, it won't be the end of Tesla.

My understanding is that the majority of his personal net worth is from Tesla (+Solar City) and SpaceX. Would that limit his ability to personally fund Tesla?

Just did some rough math on this. He's reported to have 55% of SpaceX, recently valued at 27.5B [1], and ~19% of Tesla [2], most recently at ~44B, for a combined net worth of ~23B (before any debt). He therefore definitely couldn't personally buy out Tesla at current prices, and any significant investment of personal funds would require the sale of SpaceX shares.

Also, much of his liquid pocket money has come from loans backed by his Tesla Stock. This could be a problem if Tesla stock price drops too much, as the stock he has pledge is required to be no less than a multiple of the money he has borrowed. [3]

Disclosure: I am short Tesla.

[1] https://www.cnbc.com/2018/04/13/equidate-spacex-27-billion-v... [2] https://money.usnews.com/investing/stock-market-news/article... [3] https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-...

Re: Tesla Is Doing Much Better Than Headlines Suggest

#32

Post by JumpCrisscross » Mon, Oct 15, 2018, 6:57 PM UTC

bfwi wrote: post #26

JumpCrisscross wrote: post #19

Earlier quoted context omitted.

> he is worth more than Tesla's debt Most of Elon's net worth is in illiquid SpaceX stock and Tesla shares.

Why is the Tesla stock illiquid? It's publicly traded. I'm sure he could sell SpaceX stock on the secondary market quite easily. SpaceX has never lacked in interest from investors.

> Why is the Tesla stock illiquid? It's publicly traded.

Pardon me, imprecise phrasing. SpaceX stock is illiquid. Tesla stock is liquid, but if Tesla is having financial difficulties its stock will go down. If Elon can sell Tesla shares, Tesla can sell Tesla shares.

> I'm sure he could sell SpaceX stock on the secondary market quite easily

Not "quite easily". One, he's a super material insider. That makes the process more complicated for everyone involved. (It would be difficult to avoid giving everyone else the right to participate on the same terms.)

Two, he's a super material insider. The fact that he's selling will scare away many buyers.

Three, he's a super material insider. His selling SpaceX stock to prop up Tesla screams that nobody is willing to finance Tesla in the open market. It would immediately lead to a rout.

Re: Tesla Is Doing Much Better Than Headlines Suggest

#33

Post by Fuckyourself » Mon, Oct 15, 2018, 6:59 PM UTC

throwawayosiu1 wrote: post #9

Just as a note, the author is from CleanTechnica. They are known to be extremely pro-tesla. Best case scenario - most of their articles quietly ignore the downside and prop up the upside. Worst case - they lie or embellish the truth. Disclosure: I've followed both bulls & bears for almost 6 months - and I've got quite a lot riding in short positions.

I hope you get burned really hard and spend your days on r/wsb/ for being a fucking dummy.

Disclosure: I've followed both bulls & bears for almost 6 months - and I've got quite a little in long positions.

Re: Tesla Is Doing Much Better Than Headlines Suggest

#34

Post by tssva » Mon, Oct 15, 2018, 7:00 PM UTC

throwaway2016a wrote: post #3

I actually really want to buy a Model 3 but these stories that Tesla has a bridge note due in March that they may not be able to cover have me concerned. If I buy a car I want to make sure the company is around to service it. I don't see this article covering that particular article. In fact the word "debt" appears nowhere in it. Edit: I'm actually asking someone to prove the debt issue wrong if they can. It is liter…

The note due in March is convertible. They can cover it with cash, issuing stock or a combination of the two. It should be a concern for stock owners because it might mean dilution of their position but shouldn't be a concern as far as being a company ending event.

Re: Tesla Is Doing Much Better Than Headlines Suggest

#35

Post by bfwi » Mon, Oct 15, 2018, 7:02 PM UTC

w1 wrote: post #31

amarka wrote: post #27

Earlier quoted context omitted.

My understanding is that the majority of his personal net worth is from Tesla (+Solar City) and SpaceX. Would that limit his ability to personally fund Tesla?

Just did some rough math on this. He's reported to have 55% of SpaceX, recently valued at 27.5B [1], and ~19% of Tesla [2], most recently at ~44B, for a combined net worth of ~23B (before any debt). He therefore definitely couldn't personally buy out Tesla at current prices, and any significant investment of personal funds would require the sale of SpaceX shares. Also, much of his liquid pocket money has come from lo…

Thanks for the facts.

You state that he can't buy out Tesla, which is true. But why does he need to buy out Tesla to cover their debt? On the contrary he would need to sell some of his Tesla (and perhaps SpaceX) stock and give the cash to Tesla to cover their debt.

Re: Tesla Is Doing Much Better Than Headlines Suggest

#36

Post by Fuckyourself » Mon, Oct 15, 2018, 7:02 PM UTC

prostoalex wrote: post #6

As much as I'd like the company to succeed, it seems frivolous to dismiss the concerns as short sellers' PR projects and media's desire to drive traffic through clickbait. Bond markets are largely dominated by institutional players who've seen every PR trick in the book, pay astute attention to fundamentals in hopes of finding a minuscule mispricing opportunity, and even they are not treating TSLA positively https://…

No one is dismissing concerns, this article was simply made to point out that there has been a never ending cascade of negative stories about tesla and a lot of people want it to fail.

Re: Tesla Is Doing Much Better Than Headlines Suggest

#37

Post by gumby » Mon, Oct 15, 2018, 7:05 PM UTC

JumpCrisscross wrote: post #18

sokoloff wrote: post #13

> Tesla has achieved enormous results in ramping up its Model 3 production faster than almost any new model car in history. That defies my gut feel, so I checked on carsalesbase to confirm/refute. Nearly any new car model that I look at far outsells the Model 3 during new model ramp up... http://carsalesbase.com/us-car-sales-data/tesla/tesla-model-...

The author describes himself as a cleantech and blockchain reporter [1]. [1] https://medium.com/@michaelbarnard_46445

He's also delighted to have been "mentioned in four books"

Re: Tesla Is Doing Much Better Than Headlines Suggest

#38

Post by _ea1k » Mon, Oct 15, 2018, 7:06 PM UTC

prostoalex wrote: post #6

As much as I'd like the company to succeed, it seems frivolous to dismiss the concerns as short sellers' PR projects and media's desire to drive traffic through clickbait. Bond markets are largely dominated by institutional players who've seen every PR trick in the book, pay astute attention to fundamentals in hopes of finding a minuscule mispricing opportunity, and even they are not treating TSLA positively https://…

OTOH, some of those same investors know that not all tricks are aimed at them, and some tricks are effective.

In this very thread, we have people who are hesitant to buy the car due to solvency concerns: https://news.ycombinator.com/item?id=18222268

Car companies and rumors of solvency issues can often turn into real solvency issues due to the nature of the automotive business and the impact of rumors on sales.

Re: Tesla Is Doing Much Better Than Headlines Suggest

#39

Post by peeters » Mon, Oct 15, 2018, 7:06 PM UTC

jaawn wrote: post #28

sokoloff wrote: post #13

> Tesla has achieved enormous results in ramping up its Model 3 production faster than almost any new model car in history. That defies my gut feel, so I checked on carsalesbase to confirm/refute. Nearly any new car model that I look at far outsells the Model 3 during new model ramp up... http://carsalesbase.com/us-car-sales-data/tesla/tesla-model-...

Which models did you look at? I don't remember a lot of models that are new to the market recently. I checked the Mazda CX-3 and the Nissan Leaf, and the Model 3 does appear to have crushed both of those based on first year numbers.

It's a lot harder to quantify "ramp-up" for these models too, because they almost never have a bare starting point. E.g. CX-3 is (IIRC) based on the Mazda2 platform, so do you include the preceding Mazda2 ramp-up in the number?

Still it's the pro-Tesla person that's making the claim; the onus is on them to provide the numbers or if it's not a fair comparison, to avoid it (or clarify it).

Re: Tesla Is Doing Much Better Than Headlines Suggest

#40

Post by jonknee » Mon, Oct 15, 2018, 7:07 PM UTC

tssva wrote: post #34

throwaway2016a wrote: post #3

I actually really want to buy a Model 3 but these stories that Tesla has a bridge note due in March that they may not be able to cover have me concerned. If I buy a car I want to make sure the company is around to service it. I don't see this article covering that particular article. In fact the word "debt" appears nowhere in it. Edit: I'm actually asking someone to prove the debt issue wrong if they can. It is liter…

The note due in March is convertible. They can cover it with cash, issuing stock or a combination of the two. It should be a concern for stock owners because it might mean dilution of their position but shouldn't be a concern as far as being a company ending event.

> They can cover it with cash, issuing stock or a combination of the two.

They're convertible notes with a fixed conversion rate, Tesla doesn't get to decide on what the noteholder wants. If the stock price isn't high enough whoever is holding the notes will demand cash (cash that Tesla doesn't have).