Tesla most valuable automaker in the world

[RobDickinson]

Ford, mkt cap 25bn, long term debt 115bn, just took a new 15bn loan. Absolutely no room for growth. Etc.

[RobDickinson]

GM has 90bn of debt after having all its 190bn of debt written off in just 2009...

Cap 35bn. Rapidly shrinking business just left oz, sold Europe etc

[RobDickinson]

German car companies laid off 60,000 in the last year,

[Jau808]

RobDickinson said:

Ford, mkt cap 25bn, long term debt 115bn, just took a new 15bn loan. Absolutely no room for growth. Etc.

And what does that have to do with the market cap of Tesla being $250 billion? It can't be from Tesla selling more product, or the vast profit they make on their cars, or all the tech they're licensing out, or their vast pile of accumulated assets.

[p1stonhead]

RobDickinson said:

German car companies laid off 60,000 in the last year,

Didn’t Tesla cut like 10% of their staff in 2019?

[Jau808]

p1stonhead said:

RobDickinson said:

German car companies laid off 60,000 in the last year,

Didn’t Tesla cut like 10% of their staff in 2019?

And cut all their pay by a third this quarter, when they were't just laid off. And cancelled all the bonuses.

[Jau808]

Probably worth adding that pay cuts and bonus withdrawal didn't affect the board, especially not Elon's $700 million bonus. Which is bigger than the entire cumulative profit the company has ever generated, even if you exclude all the losses.

[anonymous-user]

Jau808 said:

p1stonhead said:

RobDickinson said:

German car companies laid off 60,000 in the last year,

Didn’t Tesla cut like 10% of their staff in 2019?

And cut all their pay by a third this quarter, when they were't just laid off. And cancelled all the bonuses.

I sold all my Tesla stock when that happened. Not really for moral reasons. But more, for most companies it’s a red flag!

The reason give, to trim the fat ahead of a recession, proved prescient I guess. Who would invest in a legacy automaker for growth today?

[TwigtheWonderkid]

TwigtheWonderkid said:

And yes, I understand that new start ups run at a loss. But they have a plan. Year 1, lose £1m, year 2 lose £0.5m, year 3 break even, year 4, make £0.5m, year 5, make £1m, year 6 onwards is profit. Tesla are in year 11 and losing money. Can someone tell me the plan for when they go into profit, and crucially, when will the profits will be enough to cover the previous losses so that the overall venture is in profit. Year 15, year 20, year 50?

Can anyone answer this? I really have no idea and would like an educated opinion from someone.

[RobDickinson]

TwigtheWonderkid said:

TwigtheWonderkid said:

And yes, I understand that new start ups run at a loss. But they have a plan. Year 1, lose £1m, year 2 lose £0.5m, year 3 break even, year 4, make £0.5m, year 5, make £1m, year 6 onwards is profit. Tesla are in year 11 and losing money. Can someone tell me the plan for when they go into profit, and crucially, when will the profits will be enough to cover the previous losses so that the overall venture is in profit. Year 15, year 20, year 50?

Can anyone answer this? I really have no idea and would like an educated opinion from someone.

Tesla have about $9bn in debt, they've hedged this against their share price so stand to make around $4bn at the moment and they also have over $8bn in cash.

As a company the 'losses' are pointless to talk about as thats been invested in massive capital intensive manufacturing and created a very valuable company.

As for profit, most of the previous 2 years quarters have been profitable with huge free cash flow and if they post a profit this quarter (almost certainly now) they enter the S&P500.

[pquinn]

Well they didn't invest anything in building the China plant, no costs associated with that.

As for the S&P, entry isn't automatic, just possible after a nominal annual profit.

[TwigtheWonderkid]

RobDickinson said:

As a company the 'losses' are pointless to talk about as thats been invested in massive capital intensive manufacturing and created a very valuable company.

You see, this is the bit I just don't get. The company was set up to make money. Money invested in "massive capital intensive manufacturing" was done so in the hope that at some point, that cost could be recovered by selling the goods manufactured. So why is it pointless to talk about it. I'd say it's pointless to talk about anything else.

$9bn of debt. Does that include interest on the debt? Will this very valuable company actually ever make money, and by make money, I mean repay all debts incurred in set up and growth, plus interest, and make profit going forward. And if so, when?

[NRS]

TwigtheWonderkid said:

RobDickinson said:

As a company the 'losses' are pointless to talk about as thats been invested in massive capital intensive manufacturing and created a very valuable company.

You see, this is the bit I just don't get. The company was set up to make money. Money invested in "massive capital intensive manufacturing" was done so in the hope that at some point, that cost could be recovered by selling the goods manufactured. So why is it pointless to talk about it. I'd say it's pointless to talk about anything else.

$9bn of debt. Does that include interest on the debt? Will this very valuable company actually ever make money, and by make money, I mean repay all debts incurred in set up and growth, plus interest, and make profit going forward. And if so, when?

You seem to think it's a failure as they haven't made proper profits in 10 years. In reality they have build a worldwide car firm out of very little to have soon a pretty decent range of models that people can get (Model 3, S, X, Y, Cybertruck). They were not looking at the short term capture a small market, it was always going to aim at becoming a big player, and so that takes a lot of time and money being sunk, without making a profit. Take a look at what TVR etc have done in say 10 years by aiming small as one example. It's likely a better bet to become a big company than make a few cars and die. As long as you have enough money backing you then it is ok - and Tesla are pretty secure in that because of the "Musk" effect.

[RobDickinson]

NRS said:

a pretty decent range of models that people can get (Model 3, S, X, Y, Cybertruck)

+ roadster, + solar + powerwall + powerpack + megapack etc

[gregs656]

NRS said:

Lots of big name companies had massive falls like that to March. Not a fanboi, and no idea where the real value of Tesla is, but it's a very specific date to try and prove a point when you ignore you're picking a date at the bottom of probably an economic cycle when there was huge amounts of uncertainty. The price reflects a certain view of expansion - if that comes true it's likely a bit low. If it fails then it'll drop. People have been saying for years that Tesla will be caught - so far it's not true. I also presume one benefit to Tesla is they won't inherit large costs from a long running company - no employees on DB pensions etc. So although they have been burning money to catch up and have a range of cars people don't view this as wasted money in the same way. And yes, there is a bunch of money from fanbois - but that just means Tesla is perhaps safer, as they'll keep pumping any money into it to keep it going - great for a company that is guzzling money in an expansion stage.

Sure. However, if certain figures are being used to justify the current value then it should be noted that not much of this is new information.

It wasn’t so long ago Musk was tweeting they were over valued at $900.

There are lots of factors at play, Rob seems unwilling to accept the possibility that not all of them are rational or tied to intrinsic facts about the company.

I’ve got no skin in the game, good luck to anyone invested in them.

[RobDickinson]

Its funny no ones asked me if I think the share price is over valued ...


the question was why are they valued at this level. I've answered that.

[anonymous-user]

RobDickinson said:

Tesla have about $9bn in debt, they've hedged this against their share price so stand to make around $4bn...

What?

[RobDickinson]

fblm said:

RobDickinson said:

Tesla have about $9bn in debt, they've hedged this against their share price so stand to make around $4bn...

What?

This but more.

https://www.confirmationbias.io/?p=19040#:~:text=F...

[TwigtheWonderkid]

NRS said:

TwigtheWonderkid said:

RobDickinson said:

As a company the 'losses' are pointless to talk about as thats been invested in massive capital intensive manufacturing and created a very valuable company.

You see, this is the bit I just don't get. The company was set up to make money. Money invested in "massive capital intensive manufacturing" was done so in the hope that at some point, that cost could be recovered by selling the goods manufactured. So why is it pointless to talk about it. I'd say it's pointless to talk about anything else.

$9bn of debt. Does that include interest on the debt? Will this very valuable company actually ever make money, and by make money, I mean repay all debts incurred in set up and growth, plus interest, and make profit going forward. And if so, when?

You seem to think it's a failure as they haven't made proper profits in 10 years. In reality they have build a worldwide car firm out of very little to have soon a pretty decent range of models that people can get (Model 3, S, X, Y, Cybertruck). They were not looking at the short term capture a small market, it was always going to aim at becoming a big player, and so that takes a lot of time and money being sunk, without making a profit..

I'm not sure if it's a failure or not. I'm trying to decide. I understand it's a long term project, but my question remains, how long term? It's a really simple question, when? When will profits be enough to pay back the set up costs and make "proper" profit? 15 years, 20 years, 50 years? Surely to god there must be a plan.

I'm trying to scale it down to a Dragon's Den pitch. "I'd like £100K, I'm going to make a product that will change the world, and everyone will love us, and we'll be really cool. And after 10 years, I won't have paid you back your £100K, but I will be making 50p on each unit I sell." I can't see that getting much traction with Peter Jones.

Tesla may be making a few grand per car sold, but it's cost $9bn to get there !!!

Edited by TwigtheWonderkid on Wednesday 8th July 09:18

[BlackLabel]

And up and up they go.


“ Tesla's seemingly endless rally hit a new milestone on Tuesday: the electric car maker is now worth more than $500 billion”

https://markets.businessinsider.com/news/stocks/te...