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Tesla opens the Model 3 reservation floodgates

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Re: Tesla opens the Model 3 reservation floodgates

#141

Post by wpietri »

sdhgaiojfsa wrote: post #96
catherinezng wrote: post #65

Earlier quoted context omitted.

Tesla lost ~$2B last year, owes ~$10B in debt, and owes >$400M in interest payments per year alone. Moody’s downgraded Tesla’s bond rating because Tesla will need to raise more money this year, at least $2B (which is an extremely conservative figure), to avoid Chapter 11 bankruptcy. Elon Musk also owes >$600M in personal debt that he financed using Tesla stock as collateral. This means that if Tesla stock dips below…

OK, all of this is true, and concerning to me, despite that I would never buy a Tesla (when there are perfectly good used Nissan Leafs out there!). This is part of the reason I never invest in individual stocks: I have no tolerance for the risk, and no confidence that I can interpret all these facts to come up with a coherent estimate of whether the price will go up or down. I guess my question right now is: if the s…

> why is TSLA not priced lower?

I am not a fan, but there's no denying that Musk is a marketing genius. What percentage of people can even name the CEO of another car company? Plus he's not just selling a car; he's selling the future. As we see with Theranos, people really love the tech-as-future-magic story.

So much of the "dumb money/smart money" distinction is decided after the fact. If he pulls it off, the people who stuck it out will think themselves geniuses. But a ratings agency downgrade is a pretty good sign as to what professional investors make of it.

Re: Tesla opens the Model 3 reservation floodgates

#142

Post by woodandsteel »

aerovistae wrote: post #39
CJefferson wrote: post #17

Earlier quoted context omitted.

Are any of these deposits protected? I assume when Tesla folds, they will all be lost?

Why would Tesla fold ?

I think it is extremely unlikely Tesla would go bankrupt in the next few years. If it has a cash flow problem, then it just needs a loan or investment. There are lots of venture capitalists out there who bet all the time on companies that might not succeed but could make a ton of money if they did, and Tesla certainly fits that description.

Now it is true that Musk would hate to do this, because it would mean giving up some independence, but if necessary he no doubt will.

I think the real reason we are seeing all these claims that Tesla is about to go under is that there is about $10 billion bet on stock shorts that is going to explode in the near future, and so the financiers are desperately trying to put a scare into people and drive down the stock price.

Re: Tesla opens the Model 3 reservation floodgates

#143

Post by ben_w »

hnaccy wrote: post #136
ben_w wrote: post #114

Earlier quoted context omitted.

Everything humans do, including asking questions about virtue signalling, is virtue signaling. That said, although I don’t own a car, I didn’t actually say that in my previous post. I’m lucky that where I live, I don’t need to. That situation is likely to change, and I have no intention to build an identity of, or make a virtue out of, either having or not having a car. If that seems contradictory, consider it virtue…

>Everything humans do, including asking questions about virtue signalling, is virtue signaling. Do you not believe in the existence of true dialectics?

I had to look up the word dialectics. Rarely, is my answer to the definition I saw, and to my memory thus far only in the context that the tripartite definition of knowledge is horribly flawed because nobody can be 100% certain that what they call knowledge is really true, that instead all we have is the belief — an opinion, in one sense of the word — that the thing we are claiming to know is in fact true.

Re: Tesla opens the Model 3 reservation floodgates

#144

Post by windexh8er »

wpietri wrote: post #140
windexh8er wrote: post #138

Earlier quoted context omitted.

They call it that because: marketing. In fact I don't understate it at all. It's impressive Toyota considered and accepted it comparative to their NAM counterparts who laughed it off and ended up eating QA because of it. Musk being out of college at release if the Prius is irrelevant. The battery technology in early Prius was very bad. The delivery of the product was good, but if your inplication that the Prius fuele…

I believe you are incorrect. It's hardly just Toyota's marketing department that credits Toyota with significant intellectual work. See, e.g., professors Liker and Rother at the University of Michigan. My point about Toyota working on the Prius well in advance of others, Musk included, is to demonstrate that their continuous improvement approach doesn't prevent them from making big changes. I don't know where you get…

Because you set a goal and did not meet it with 100% completion does not define failure. If that's the case your argument holds true to, likely, every auto manufacturer quarter over quarter. That's a very diluted perspective across the board.

Re: Tesla opens the Model 3 reservation floodgates

#145

Post by wpietri »

windexh8er wrote: post #144
wpietri wrote: post #140

Earlier quoted context omitted.

I believe you are incorrect. It's hardly just Toyota's marketing department that credits Toyota with significant intellectual work. See, e.g., professors Liker and Rother at the University of Michigan. My point about Toyota working on the Prius well in advance of others, Musk included, is to demonstrate that their continuous improvement approach doesn't prevent them from making big changes. I don't know where you get…

Because you set a goal and did not meet it with 100% completion does not define failure. If that's the case your argument holds true to, likely, every auto manufacturer quarter over quarter. That's a very diluted perspective across the board.

You keep responding to things I didn't say, while ignoring the inconvenient things I did say. So I think we're done here. But just to be clear, I'm saying his repeated failure to hit goals is the not the definition of failure, but rather the sign of a severe process problem.

Re: Tesla opens the Model 3 reservation floodgates

#146

Post by jillesvangurp »

catherinezng wrote: post #65
jillesvangurp wrote: post #56

The way I see it, logistics aside, Tesla has awesome cars that are loved by those that manage to get one delivered, customers are actually lining up to buy them to the extent of paying just to get in line for that years ahead of time, and they are pretty much guaranteed to sell anything they ship for the foreseeable future. Better still most of their would be competitors are either not shipping at all right now, year…

Tesla lost ~$2B last year, owes ~$10B in debt, and owes >$400M in interest payments per year alone. Moody’s downgraded Tesla’s bond rating because Tesla will need to raise more money this year, at least $2B (which is an extremely conservative figure), to avoid Chapter 11 bankruptcy. Elon Musk also owes >$600M in personal debt that he financed using Tesla stock as collateral. This means that if Tesla stock dips below…

So, that's about 1 year of revenue at 5K cars per week or roughly equivalent to their revenue last year. Or half of that if they manage to double that to 10K per week, as they seem to have promised. That doesn't sound like an impossible situation to me. Unless I'm missing something, a default on these debts is unlikely and given the numbers, access to more capital should be feasible. I agree that these are high risk investments though. High risk and high reward go hand in hand of course.

Elon Musk may owe a little money indeed but he's also a shareholder in SpaceX. I'm not up to speed on how much he owns of that exactly but I believe it is a fairly large chunk of that company. And given the amount of rockets going up lately, his shares are probably worth quite a bit at this point. Magnitudes more than the 600M you mention, I imagine. So, I don't think a personal bankruptcy is that likely for him any time soon.

Tesla 'lost' money investing in production capacity, R&D, opening up a huge battery production facility, etc. That's not wasted money unless demand for utilizing these to full capacity disappears. As it is, the opposite seems to be the case. Tesla is talking about opening additional Giga factories even. That will cost more money of course but I think they can make a case for that being a good investment given demand in their products.

That's perhaps why it's stock valuation is so high: shareholders are expecting these investments to translate into revenue and growth. People that shorted Tesla seem to be getting a bit nervous about maybe ending up on the wrong end of that bet, which could end up being an expensive mistake for some.

Boring and Solar City are interesting wild cards. I think owning Solar City is not necessarily a bad thing for Tesla. Solar panels are in demand and Tesla seems to consider charging infrastructure as part of their strategy. Also up-selling batteries that they produce to people that install solar panels seems like a smart move. Unless there's something wrong with their product, I see no reason for that to fail. They do seem to have acquired a bit of a cost overhead problem, which they have been fixing through layoffs. But other than that, this could very well turn out to be a pretty good bargain.

Boring seems like a weird project at first glance. But it wouldn't be the first side project that Elon Musk is involved in that turned into a real business.

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