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Tesla Surges Above $500, Leaving Analyst Targets in the Dust

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Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#241

Post by MrPowers »

addicted wrote: post #187
MrPowers wrote: post #111

Earlier quoted context omitted.

The enterprise value is the value of a company. enterprise_value = market_cap + debt - cash Different companies are capitalized differently - some use all equity, some all debt, some a mix. Not sure I agree that other claim holders represent reductions in the "value of the company". The same company can be capitalized different ways - the enterprise value for that company should be unchanged.

Enterprise Value is absolutely not the “value” of the company. The Enterprise value is the actual amount a company will cost you if you buy it at Market Cap. IOW, if you buy a company for a $100bn but it has liabilities of another $100bn that means it’s cost to you is actually $200bn, because you will also have to pay that additional $100bn. That’s why cash reduces the EV of a company, because if you pay $100bn for a…

Market cap is the market value of a company's equity.

market_cap = total_shares_outstanding * share_price

I passed all three CFA exams a few years back and studied this extensively. I might be remembering incorrectly, but think you're making factually incorrect statements. Appreciate your comment and the motivation to think about this more.

I recommend reading up on these terms: * market value of equity * book value of equity * intrinsic value of equity

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#242

Post by bryanlarsen »

Dylan16807 wrote: post #228
bryanlarsen wrote: post #209

Earlier quoted context omitted.

(B). The company is worth $300 billion to the bondholders, and $0 to shareholders, giving a total value of $300 billion. And that's assuming the company is being liquidated. Most companies with viable businesses are worth a lot more than their assets because the big part of the valuation is assumed future earnings.

> The company is worth $300 billion to the bondholders, and $0 to shareholders, giving a total value of $300 billion. But if it was cash and debts instead of assets and debts, the company wouldn't be worth $300 billion to bondholders?

If you spend a dollar to buy a chocolate bar, you say the chocolate bar is worth $1 and that you spent $1.

If you give a teller $1 for 4 quarters, you don't say that you spent $1.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#243

Post by bryanlarsen »

kbutler wrote: post #222
bryanlarsen wrote: post #206

Earlier quoted context omitted.

> Is the company now more or less valuable? More. Normally burning a trillion dollars would have taken about a trillion off the market cap, so if it held steady that means a trillion dollar gain somewhere else.

"There's a pony here somewhere!"

Yup, there's a pony buried in your assumptions.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#244

Post by Dylan16807 »

bryanlarsen wrote: post #242
Dylan16807 wrote: post #228

Earlier quoted context omitted.

> The company is worth $300 billion to the bondholders, and $0 to shareholders, giving a total value of $300 billion. But if it was cash and debts instead of assets and debts, the company wouldn't be worth $300 billion to bondholders?

If you spend a dollar to buy a chocolate bar, you say the chocolate bar is worth $1 and that you spent $1. If you give a teller $1 for 4 quarters, you don't say that you spent $1.

I borrow $10 from a friend.

I currently am worth $0 to that bondholder.

I spend one of those borrowed dollars on a chocolate bar.

Now I'm worth $1 to that bondholder??

The spending is done with a completely different person than the bondholder.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#245

Post by mywittyname »

bentcorner wrote: post #70
stetrain wrote: post #18

Earlier quoted context omitted.

I agree that basic build quality is probably worse than a similarly priced BMW, Audi, etc. I haven't had any quality issues with mine but I know if I started measuring panel gaps it won't measure up to others in the price range. Noise insulation at highway speeds, door closing sounds, etc. don't quite measure up with the price either. Mostly I prefer the simplicity of the vehicle and drivetrain. Alternatives from oth…

> The biggest change I would make to the Model 3 design is ditching the frameless windows and using normal door frames which are less complex (no need for the window to move each time you open a door) and easier to seal up. It'd be interesting to understand why the window needs to move down to open the door. I had a 90's acura integra that also had frameless windows, and the door seal was engineered such that it flex…

Most frameless window cars now have a drip edge around the window that's supposed to keep moisture away from the door seals. The window goes down a bit in order for the window to clear the drip edge. If your battery goes dead in one, then the window will catch a little and pull. It's okay if it happens a few times, but over time it will probably pull the window off of the tracks.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#246

Post by slumdev »

jppope wrote: post #55
oliverx0 wrote: post #11

According to Robinhood: “Tesla's stock has jumped 35% over the past month, becoming the most valuable American car company ever. GM and Ford produced a combined 39x as many cars as Tesla did in 2019, but the electric carmaker is now more valuable than GM and Ford combined. Oh, and Tesla lost almost a billion dollars over the past year while GM and Ford made over $10B in profit. Investors care more about future profit…

Here's what you're missing... Most of the major automakers: Ford, Toyota, Honda, Nissan, Mazda, etc do not have viable business models in the near future. They are so far behind in sustainable transportation its only a matter of time until they lose their economies of scale and are no longer viable businesses. It's an "Iphone moment"... the other car companies have great "flip phones" right now.

Only sort of.

John Q. Public has no reason to buy an EV. Today's gas prices don't put the same dent in his pocket that $5/gallon* gas did. And there's good reason to believe that $5/gallon gas is probably never coming back.

I am for EVs, Tesla, and anything that can keep us from making large portions of Earth unarable and uninhabitable. But most people's car-buying decisions are driven by economic realities, not environmental concern.

*$5/gallon US average price - I understand it's frequently this high on the coasts and in large cities, and it's almost always higher in countries with appropriately levied fuel taxes.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#247

Post by Slartie »

_jal wrote: post #124
SmellyGeekBoy wrote: post #105

Earlier quoted context omitted.

> They did not have any disadvantages besides the high price iPhones couldn't run Flash (which powered all of the interactive content on the internet at the time), couldn't send MMS (which was the way everyone shared photos at the time) or run apps (which was how feature phones added functionality at the time). "Why on Earth would anyone want one of those!?" was a pretty common reaction, yet they still sold like hotc…

> "Why on Earth would anyone want one of those!?" That reaction really only came from makers of competing phones. (RIM execs famously refused to believe the battery life was possible, Balmer threw very unconvincing dismissals.) Everyone else was standing in line to buy one.

Actually, the first one wasn't in that much demand, because it had laughably slow processor and cell standard support even by 2007 standards (no UMTS, which was already available on cell networks back then, just not with an iPhone). Apple fanboys stood in line for it and since Apple wasn't able to even produce enough for them, it seemed like "everyone wanted one".

The iPhone 3G changed this fundamentally; you didn't have to be a die-hard Apple fanboy to justify wanting one of those, because it was the only phone on the market that actually gave you sufficiently usable mobile access to "the real Internet".

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#248

Post by riantogo »

brenden2 wrote: post #7

How do Tesla owners feel about the quality of their cars? I'm genuinely curious. This is merely an anecdote, but in my experience it seems like the overall quality of similarly priced automobiles from more traditional luxury carmakers is much higher. The only significant advantage of the Tesla is the fact that it's 100% electric. Also, this is merely a subjective personal preference, but I just don't like the style o…

It feels different and I was prepared to not like it. My previous car and wife's current car is BMW (leather seats, wood dash etc.). I loved the BMW feel. But these days I try to avoid ending up in my wife's BMW as much as possible.

Whenever I'm in any luxury car it feels nice, but also feels dated. Hard to explain. Kind of like you might enjoy your AirBnb stay in an old chateau but won't want to live there for good.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#249

Post by auiya »

In the US, what sells the most (sadly) are pickup trucks and SUVs. The numbers aren't even close. The big automakers here know this, and have tailored their product lines accordingly. Ford is basically kept afloat singularly by F-series pickup sales, and have cancelled many sedans entirely. They have an entire range of different sized trucks and SUVs for every market segment. Same with Chevrolet. Now pan over to Tesla. Tesla has one single SUV offering, and sales of that SUV are dismal. They just teased a pickup truck release with their 'cybertruck' product, but the design was purposely off-putting, and it only served to make a mockery of the market segment. So with one SUV that doesn't sell, and a parody of what is currently the highest selling platform in the US, I'm not sure why anyone speculates Tesla is in a place of upward trajectory. I don't buy the argument that other car companies can't/won't pivot to counter either. Porsche reverse engineered one of their Model S vehicles, admitted it was quite well-constructed, and then countered with the Taycan (by all reviews a better car) a mere 3-4 years later. I'm glad a company like Tesla exists to force the market to the EV concept, but most people will buy an EV when they know it's supported by a long established and trusted automaker like Toyota, Ford, Chevy, or Honda. Tesla then exists as a proof-of-concept model for the bigger players to follow, not as a displacement.

It should also be noted, many motor companies are also investing quite a bit of money into alternative fuels like synthetic petrol and hydrogen, and don't want to rely on an energy source which is primarily derived from conflict zones. They aren't 100% sold yet that the EV platform is indeed the way forward.

Re: Tesla Surges Above $500, Leaving Analyst Targets in the Dust

#250

Post by bryanlarsen »

kbutler wrote: post #231
bryanlarsen wrote: post #209

Earlier quoted context omitted.

(B). The company is worth $300 billion to the bondholders, and $0 to shareholders, giving a total value of $300 billion. And that's assuming the company is being liquidated. Most companies with viable businesses are worth a lot more than their assets because the big part of the valuation is assumed future earnings.

So you can create infinite value by borrowing more and more money. I'd love to create lots of value for you by borrowing money from you. I would even consent to not destroy any of that value through making payments. The bond is worth $300b to the bondholders, but only because it is expected to be paid back and is secured by the $300b assets. You can prove that by assuming those assets disappeared: how much is the bon…

Every single fair transaction has a net value of $0. If I buy a chocolate bar for $1 that's worth a dollar to me, I'm up one chocolate bar worth $1 and down a dollar. No net worth change, but it is validation the chocolate bar is worth $1.
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