Teslas Future

[george65]

Not trying to start a slanging match here but rather get an insight into what I may be missing and learn.

I have been looking at tesla's Finances and position as a company from a strictly Dollars and Cents POV and this is what this is about. I read lots of supporters saying Musk is a visionary and tesla were the first company to bring electrics to the mass market and other things supporting the idea the company will be around forever which are NOT relevant from the financial and long term POV of the company.
What I'm interested in is hearing facts and reasons based on $$ why people support the company and think it is a good long term proposition.
Dollars and cents, not feelgood and emotion.


Tonight I was talking with Accountant/ Financial planner Brother in law about the financial position of the company. There are many aspects and tangents but as BIL pointed out, the company has a liquidity of under $4bn. That means they sell everything they own up and that's what they will get. ATM they are valued at 44 Bn as a company and they have $12Bn in Debt falling due in 12 Months. Their operating losses are steadily increasing to around $13Bn last year.
I asked BIL how anyone with a financial education especially such as fund managers could think the company was a wise investment? He could offer no answer but noted the figures pointed to just one thing and to believe they could turn around massive losses to the massive profits they will need in the time frame they have to offset their debt is not realistic.

I know Tesla has a strong following and I'd like to understand how people who think the company is a long term proposition and support it base their belief on numbers and how Tesla will be able to be around in say another 5-10 years and or beyond?

[ol' boy]

..

[Uncle Fester]

Tonight I was talking with Accountant/ Financial planner Brother in law about the financial position of the company. There are many aspects and tangents but as BIL pointed out, the company has a liquidity of under $4bn. That means they sell everything they own up and that's what they will get. ATM they are valued at 44 Bn as a company and they have $12Bn in Debt falling due in 12 Months. Their operating losses are steadily increasing to around $13Bn last year.

Show me a growth stock that doesn't have debt?
Debt is a requirement for growth, our whole economy is based on that.

If their debt is less than 1/3 of their market market value then that still looks fine to me if it is all going towards company investment and not the director/management pockets.

Why are you picking on Tesla again, is that your pet hate?

[peteramjet]

While many see Tesla as somewhat visionary, its fundamental business model is based on what it sees will be relevant into the future. The problem is that it is inherently difficult to predict what the market will want or need into the future. Many companies who have done similar in the past have flourished - many more have failed.

Like many companies in the current green/environmental space, Tesla was assisted with large taxpayer funded subsidies. I’ve no issue with these subsidies being offered and used to assist a progressive company, but at some point they must stop. The question then is, will the company continue to be successful?

[trash]

Yesterday I went for a little drive down Santa Monica Blvd.
From Highland and Hollywood down to the pier, it became a game of "spot the Tesla"
We counted 17 and this didn't include other electric cars we saw. Pulled up at traffic lights near Melrose, there was a Tesla dealer. While sitting at the lights I counted 4 tesla's, they were litterally in a box formation around our car. They're like fleas on a dog in LA.

I haven't looked at the finances of Tesla since I don't have any skin in that game.
I think their real issue is that they behave like Apple. Their platform is closed shop. You have no choice but to go crawling back to Tesla to fix the car.
The real money is in an open platform. Let the hackers to the R&D for you and then when they do something cool, employ them.

I've asked Tesla salesmen technical details and some other prickly questions. I compare their behaviour to scientology's sea-org. They can't or won't answer anything more technical than how long does it take to recharge.

[gordon_s1942]

As an example of 'Blind faith' read about Allen Bond and Christopher Skase who were the Doyens of the Financial World until one day the wind blew from a different direction and all their 'Tickets' blew off !!!

The World has jumped on the back of 'Solar' and 'Alternative' energy sources to the extreme but there are cracks beginning to appear with one area in Japan turning 'OFF its Solar collectors because they feared that due to an 'over supply of Energy', it would cause damage to the system.

[george65]

Why are you picking on Tesla again, is that your pet hate?

Is that a tounge in cheek Joke or are you really so Tesla obsessed that anyone asking a genuine question and not blowing sunshine up their arse is " picking on them"?
I made NO insinuations or inferences yet you still go into protective mode and fail to answer the question which was financially based.

If you read what I said, I am trying to learn and work out what I am missing. That's your and other proponents opportunity to defend the company and win people over with facts and figures. To ask about the merits of the company and why people think they have a secure future is not picking on them at all and if you think it is, then that is a product of your own insecurities towards them, not me putting shit on anyone which I was careful not to do.

Your reply is very Musk like when the business analysts asked him relevant questions and he had a dummy spit about it.

[george65]

Thanks for the responses. Much of what has been said I agree with but I am looking to have my mind changed and understand why there are so many supporters of the company. I admit, I don't understand why people are so confident in the company's survival but i'm trying to. The supporters constantly complain about negative press and I agree there is a lot of that so i'm trying to look beyond and see what the possibly biased press don't talk about and what the financial upsides to the company are and will keep them successful in the future.
I don't know how to be any more positive than that and invite factual and positive responses.

Just to reiterate, I was hoping someone could show me some facts and figures or other verifiable evidence why Tesla will prosper in the future and is a secure company.

[ol' boy]

I think the thing with Elon Musk and his venture into Tesla can be summed up with his passed.

All his success and wealth has come from the online market place
Where ideas can be born, marketed, multiplied fast and delivered at a low cost.

From what i understand (might be wrong) this is his first foray into manufacturing a tangible product, that takes time to build, needs raw materials, labour, sub contractors, has to meet regulations and then provide a warranty and after sales service.

A long way removed from the online world

[george65]

The World has jumped on the back of 'Solar' and 'Alternative' energy sources to the extreme but there are cracks beginning to appear with one area in Japan turning 'OFF its Solar collectors because they feared that due to an 'over supply of Energy', it would cause damage to the system.

The damage to the system excuse I think really means " Damage to our revenue" and that is the thing they REALLY fear. People significant'y reducing their power Bills and therefore the companys revenues is counter productive to the endless growth business model they all work on. That needs to be change in a myriad of things and is essential if the future perfect renewable, clean energy world ideal has a hope of being realised.

I was watching a report the other night where they interviewed the head of a power co that said the same thing. they did some digging and concluded there has never been a report anywhere of solar backfeed " Damaging" anything.... other than power co income that is.

Regardless, if gubbermints and power co's are really committed to renewable energy, then they need to work towards that and make improvements to the system so it won't be damaged. From everything I have read, if changes need to be made, they are neither expensive nor difficult.
The fact Gubbermints and power cos will sink billions into solar farms instead of putting the same amount into subsidies or upgrades to the system to allow more locally generated solar is pretty clear to me. One they make money on and the other they don't. The whole thing about clean energy and the environment is just a VERY convenient way for them to make more money.

[Uncle Fester]

Is that a tounge in cheek Joke or are you really so Tesla obsessed that anyone asking a genuine question and not blowing sunshine up their arse is " picking on them"?
I made NO insinuations or inferences yet you still go into protective mode and fail to answer the question which was financially based.

.

How about you read the rest of my post above !
It has the answer to your question. Debt is required for growing business.

...and I am certainly not obsessed with them but you seem to be plastering this forum with so many negative threads and comments about them that you are starting to look like a troll.

[enf]

Here's a little negativity that I never thought of............

[hinekadon]

I think the Dirty word here is GROWTH . always has been with business , in nature one cant force a plant to grow un-naturally ,same in business viability comes with time and structured management, who are we to comment on these matters without fully being aware of all the facts. obsession over how one goes about building a profit is for the owners and investors so if you dont have a stake you dont get a say being negative wont help being positive wont either, therefore get a stake and have your say or shut up . nomeat is correct finances are the companys concern as his question asks/ states

[LeroyPatrol]

Here's a little negativity that I never thought of............

I realised this years ago. I used to drive the company Mitsubishi iMev around town and had the odd person walk out in front of me. We all use our ears and then check with our eyes as a backup as we step out.

[Uncle Fester]

Here's a little negativity that I never thought of............

That is the oldest excuse in the world to damn electric cars in favour of petrol guzzelers:

Interesting though that a Taxi business could be viable with 19th century battery technology.

1. Electric cars are NOT silent when they move a little faster. A rather high pitched whining noise and then there is the tyre noise that is the same as every other car.
2. Modern petrol cars are VERY silent these days when they move slowly eg. parking lots. A blind man walking into the blind spot of a driver reversing out stands no chance either.

[george65]

How about you read the rest of my post above !
It has the answer to your question. Debt is required for growing business.

So your answer is they have a secure long term future and are a viable company because they are in Debt and that is essential for growth.
OK then, noted.

...and I am certainly not obsessed with them but you seem to be plastering this forum with so many negative threads and comments about them that you are starting to look like a troll.

When you automatically label any question about them no matter how impartial or non biased as" Picking on them" or negative, I'm sure it does seem like " Plastering the forum" but again, that is YOUR bias and position kicking in, not anything that I actually wrote or asked.

[Uncle Fester]

I think the Dirty word here is GROWTH . always has been with business , in nature one cant force a plant to grow un-naturally ,same in business viability comes with time and structured management, who are we to comment on these matters without fully being aware of all the facts. obsession over how one goes about building a profit is for the owners and investors so if you dont have a stake you dont get a say being negative wont help being positive wont either, therefore get a stake and have your say or shut up . nomeat is correct finances are the companys concern as his question asks/ states

Soo true.
In reality we all haven't a clue what is going on in the board rooms. Figures are released and opinions are created.
The down rampers fight with the up rampers, has always been like that and in the end it all leads to nothing.

Fact is they all want to earn money, that is the only driver of our economy and they don't care how they do it, problems can be solved, just get results in the end.
Fundamentals are almost irrelevant, it is all about sentiment and nobody can predict the future. What looks bad can suddenly turn good because there is a lot at stake for those involved, while there are others that have directors just sitting on their fat arses waiting for their remuneration.
So which one would you invest in?

However for me Tesla shares are overpriced.
Their debt is not the problem, in fact I would suggest they make more debt to cover production lag so they can compete with the mainstream market.
It is a bit risky because they are best known for up-market cars, but with everything in investment: no risk, no gain.

[george65]

Anyone else got any input as to why they believe Tesla will progress into the long term Future based on financial/ market / other factual reasons?

[mello yello]

Anyone else got any input as to why they believe Tesla will progress into the long term Future based on financial/ market / other factual reasons?

No, dont have a clue, but i know i do have a healthy disrespect for Elon Musk and his little Tesla Ponzi Schemes - i can go on, and on, and on, and have no problem with it

cheers

[ol' boy]

Looks like Divide and Conquer is alive and well in the EV space

Just as the design had planned for