Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tencent buys 5% of Tesla

techcrunch.com

Post reply on HN
Print view View original

51–60 of 376 posts

Re: Tencent buys 5% of Tesla

#51

Post by prolly_a_moron »

jgalt212 wrote: post #7
jpeg_hero wrote: post #2

Tesla shorts can't get a break. First a smooth $1B+ capital raise without a stock hiccup and now this.

The raise will dilute earnings for common shareholders, so definitely a downward force on stock price. That being said, this investment and the recent raise you alluded to should clobber the put skew. http://www.volcube.com/resources/options-articles/what-is-op...

>The raise will dilute earnings for common shareholders, so definitely a downward force on stock price.

The stock is detached from reality.

It's my understanding that this was another offering, so, essentially, Tesla sold 5% to Tencent at an average price of $217 and change. Current shareholders get diluted. Prices go up.

I don't get it, but I'd love an explanation. Were people, prior to these capital raises, concerned Tesla couldn't raise any more money? That would make sense, but certainly isn't the sentiment I gathered from my travels.

Re: Tencent buys 5% of Tesla

#52

Post by devy »

11thEarlOfMar wrote: post #20

I see this move as a blessing for Tesla to gain market share in China. The stock is valued for growth far into the future, and achieving that outcome is really iffy without a robust China market. [edit] I'm speculating, but I don't think TenCent could have gotten as big as it has without the blessing of the Chinese government. That is the basis for my view.

> I see this move as a blessing for Tesla to gain market share in China.

Yes, and Tencent is betting on it, since Tesla Chinese market sales has just broken $1B [1], soon Chinese market will be Tesla's biggest market with Chinese government's policy leaning on supporting EV industries in a MAJOR way. Win-win!

http://fortune.com/2017/03/03/tesla-one-billion-sales-china/

Re: Tencent buys 5% of Tesla

#53

Post by icantdrive55 »

I think they knew solar is the future, all around the world.

China has massive pollution, and most homes/businesses that have access to direct sunlight. (Yes--I know solar works 50% on cloudy day. It doesn't work well with a lot foliage coverage. China looks barren of trees--sadly.)

My hope is those solar tiles come down drastically in price. My hope is the average roof will be cost effective to put said tiles up.

I think those solar tiles will be Tesla's Trump card. It will probally be in four years, or more in the United States. We will need a new president. (I was for Trump putting Coal miners back to work, until I found out the problem is not regulations, but automation. Actually, I want clean air. We need a better way of supporting people affected by the elimination of old ways of doing things; like a Basic Income.). Sorry about being all over the place, but there are no simple answers. Trump is just finding this out.

I think Tencent saw a long value in the stock, even though their citizens will not likely buy Tesla's tiles. They will buy the cheapest knock-off as usual, but the rest of the civilized world will buy Tesla's product.

(I don't know what patents are on these new Tesla tiles, but I bet they are seen as a valuable commodity, even to a cheating society like China.)

Re: Tencent buys 5% of Tesla

#56

Post by timr »

vvanders wrote: post #50
Robotbeat wrote: post #46

Earlier quoted context omitted.

I own a Volt. Best car I've ever driven. GM doesn't care much for it. The only advertising they really do for it basically is trying to steal EV customers from Nissan's Leaf. Really dumb. And the dealers don't like it because 1) they don't know how to service them and especially 2) they almost never need servicing. If you run almost exclusively on electric, you only need like 4-5 oil changes in the entire life of the…

Yup, which is why any entrenched player is going to have to both build an incredible car and fight against their dealerships to sell it.

Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular.

GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in the near term.

You can certainly argue that fuel prices are going to go up and make electric cars popular. The question is: does it happen before Tesla goes broke?

(Edit: downvoting doesn't change facts. From GM's own 2017 outlook [1]: "Ten all-new or recently redesigned crossovers are expected to drive GM’s sales and share higher in 2017, including the Chevrolet Equinox and GMC Terrain, which will compete in the industry’s largest segment." And they're not joking about that last part. As of February 2017, SUVs and Trucks dominate the list of most-popular vehicles sold in the USA [2].)

[1] https://www.gm.com/investors/sales/us-sales-production.html

[2] https://www.cars.com/articles/top-10-best-selling-cars-febru...

Re: Tencent buys 5% of Tesla

#57

Post by GCA10 »

Blackthorn wrote: post #5
jpeg_hero wrote: post #2

Tesla shorts can't get a break. First a smooth $1B+ capital raise without a stock hiccup and now this.

Every budding short seller needs to, at some point in their career, learn the lesson of never shorting a growth tech stock.

Yes. Short-selling pioneer Bob Wilson nailed the key insight on these situations. They are "manana stocks," Wilson declared, way back in the 1970s. Their valuation is premised on the notion that something wonderful will happen in the future. Time horizons keep being pushed out, but the stocks' fans don't mind.

Shorts can get very cranky and righteous about each little bit of slippage. But as long as new enthusiasts keep showing up, and old ones feel lenient, it's hopeless to insist on strict accountability. Even a short-lived burst of optimism is sufficient to arrange more funding, so manana always seems within reach.

Worst case: you're shorting Amazon. The bulls were right, and you go broke.

Best case: you're shorting something like Energy Conversion Devices, which eventually did run out of money and file for Chapter 11 in 2012. Shorts had been predicting its demise since the 1970s. That is a long time to wait.

Re: Tencent buys 5% of Tesla

#58

Post by [deleted] »

PaulHoule wrote: post #10
jgalt212 wrote: post #7

Earlier quoted context omitted.

The raise will dilute earnings for common shareholders, so definitely a downward force on stock price. That being said, this investment and the recent raise you alluded to should clobber the put skew. http://www.volcube.com/resources/options-articles/what-is-op...

One of life's little mysteries is that you almost always lose money if you invest internationally. A friend of mine says it is because the locals know what is going on better than you do. Tencent was a major investor in Magic Leap and the Saudi Sovereign Fund invested heavily in .coms in early 2000. It is definitely not a sell signal, but I would not buy what Tencent is buying.

[deleted]

Re: Tencent buys 5% of Tesla

#59

Post by jcfrei »

Robotbeat wrote: post #46
spyspy wrote: post #41

Earlier quoted context omitted.

> when they seriously start releasing electric vehicles They've been "serious" for a long time. Chevy has been selling the Volt since 2010. If they were going to muscle out Tesla they would have done it by now. And it's not just about technology. Tesla has the customer reputation that companies like GM will never have again.

I own a Volt. Best car I've ever driven. GM doesn't care much for it. The only advertising they really do for it basically is trying to steal EV customers from Nissan's Leaf. Really dumb. And the dealers don't like it because 1) they don't know how to service them and especially 2) they almost never need servicing. If you run almost exclusively on electric, you only need like 4-5 oil changes in the entire life of the…

Very interesting points. So as the other comment has pointed out, traditional automakers will have difficulties selling through their dealerships. Do any of the established players have any plans for their own dealerships / showrooms?

Re: Tencent buys 5% of Tesla

#60

Post by Robotbeat »

timr wrote: post #56
vvanders wrote: post #50

Earlier quoted context omitted.

Yup, which is why any entrenched player is going to have to both build an incredible car and fight against their dealerships to sell it.

Actually, the reason GM "doesn't care" about the Volt (I'm exaggerating here; they obviously care a little bit ) is because they're rational: electric cars are not popular with mass-market consumers, and it's far from clear that they're going to become popular. GM is investing in what sells, and right now (i.e. for the last decade or two), that's SUVs and light trucks. Which doesn't bode well for Tesla, at least in t…

The whole point of advertising is to make something popular that isn't already or to maintain popularity for something that would otherwise decline in popularity. As long as all GM is doing is sniping at other electric cars while doing general broad-based advertising of their fossil fuel powered vehicles, they're not lifting a finger to expand the EV market.

I wouldn't worry about Tesla, anyway. Tesla has huge brand clout and advertises by making really awesome, inspiring vehicles. You want the fastest production sedan? There's only the Model S. And Model X is, after all, an SUV/crossover. And Model 3, which isn't, will be the basis for the Model Y, which /will/ be a crossover and/or light truck. Again, Tesla will be perfectly fine on the demand front.

Post reply on HN