You can install our site as a web app on your iOS device by utilizing the Add to Home Screen feature in Safari. Please see this thread for more details on this.
Note: This feature may not be available in some browsers.
The last time Morgan Stanley made a mockery of Reg-S, was in February 2014 when a day before Tesla announced a $1.6 billion convertible offering Morgan Stanley's Adam Jonas raised his PT on TSLA from $153 to $320, sending the stock soaring and assuring far less convertible dilution on the day of pricing. Fast forward 1.5 years when Tesla, having burned through most of this cash (in fact it burned over $1 billion in just the first 6 months of the year), Tesla announced it would sell $500 million in a follow-on stock offering (subsequently upsized).We were modestly surprised that Adam Jonas did not upgrade the stock just before the equity offering as he did last time. We said the following:Moments ago, however, all our confusion was put to rest when Morgan Stanley did just as expected, only this time it at least followed protocol when it announced it is raising its price target on TSLA from $280 to a whopping $465, or just shy of $61 billion in implied market cap. Incidentally at this price TSLA would be the biggest US automaker, surpassing not only GM's $50bn in market capo, but also Ford's $60 billion.
And if there is a reason why Morgan Stanley did not upgrade the stock with a $320 price target yesterday as it did back in 2014 the day before it issued a convertible offering for TSLA, is that this time the lead left is Goldman, not MS: "Goldman, Sachs & Co. and Morgan Stanley are acting as lead joint book-running managers for the offering, J.P. Morgan and Deutsche Bank Securities are acting as additional book-running managers for the offering, and BofA Merrill Lynch and Wells Fargo."
Less than 2 weeks ago Goldman Sachs downgraded Tesla. Who is right?
Less than 2 weeks ago Goldman Sachs downgraded Tesla. Who is right?
I am sorry, but this report is absolutely bogus in my humble opinion. He lists 5 key points a company needs to fulfill the promise of shared mobility. Let's examine them point by point, keeping in mind that the outlook for unlocking them value is 15(!) years.
1) Vehicle design and engineering. I don't believe this is necessary at all to become a large player in shared mobility. Automotive is a competitive market meaning any provider in the market can just buy the cars themselves. Sure, they'll have to pay the markup while Tesla Mobility could buy their own cars at cost. But from a stock price perspective this is irrelevant : any margin saved by using your own cars is also margin not earned by selling to, for example, Uber. In fact, this can become a double disadvantage. If somehow a new competitor in the car making business manages to beat Tesla in terms of bringing out a good car product, an Uber-like competitor is at an advantage since it can more freely decide to source its cars from the new upstart. It's the same reason there are no strong synergies from having a car rental and a car manufacturing business under the same company.
2) Leadership in a connected car. I believe Tesla's leadership is not that decisive, certainly not over a 10 year time frame. Google, Microsoft and Apple are all working on their car solution and we know their (network) engineering experience is top class. It's not unlikely their in house development is already a better connected car solution than Tesla's. But established car manufacturers are adding connectivity as well to their product offering that is barely behind what Tesla is offering.
3) Autonomous cars/Software expertise : judging by actual product that you can buy today as an ordinary customer and drive and not just see in an orchestrated demo video, Tesla is actually playing catch up here. The features it offers are lagging. It may yet leap frog existing manufacturers when (and if) it brings out what TMC is expecting it to bring out 'real-soon-now', but that remains to be seen. And here again established car manufacturers are not sitting on their hands. They too have impressive demo videos of technology they are working on. And that's even without taking into account what (again) Google and Apple are doing in private.
4) Battery/drivetrain experience : no doubt Tesla is the undisputed leader here with a significant advantage.
5) Proprietary infrastructure network : again, Tesla is the undisputed leader here. But at the same time, it's infrastructure is most lacking in the areas where shared mobility is promising the most : the inner city. Even more crucially, building out infrastructure is really a matter of expending capital. Here, Tesla is at a severe disadvantage. Established players have a much larger capital base and can spend the amount necessary to replicate what Tesla has in few quarters of free cash flow at most. Never mind when considering companies with real money spinners like Google, Apple or Microsoft. They can probably recreate the supercharger infrastructure with free cash flow from a few weeks of operation.
So Tesla scores a 1/5 on the analyst's own criteria. But it loses big time in what I consider the most important factor at all : the (social) network effect that comes from being first to market.
Users of a shared mobility app will judge it foremost by availability : how likely is there is a provider in my area. And vice versa, providers will judge any platform by the number of users it has. Both effects reinforce each other to essentially become a 'winner takes it all' market. It is no coincidence that Uber, Lyft and others are spending like crazy to increase their market share. By the time Tesla has cleaned up the backlog of Model X orders (end of 2016), it is likely too late for any shared mobility platform that hasn't yet been established in the market.
Any member of My Tesla could ask for a ride and pay a small fee to Tesla.
App or no app, I will never be an Uber like taxi driver.
I'm talking about ridesharing à la Blablacar, not Uber.
They also lie.
I don't know if Mobileye's IPO roadshow video/powerpoint is still available online but it was good and had a pretty solid roadmap in place. Included their personal timelines for the progression of autonomous vehicles.