i'm sorry Papafox, i really try very hard to only like your posts but i end up clicking Love instead. please keep up the great work of providing your super lucid explanations! Thx!
Well, that makes my day. Thanks!
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i'm sorry Papafox, i really try very hard to only like your posts but i end up clicking Love instead. please keep up the great work of providing your super lucid explanations! Thx!
Why help one of the main future competitor in their direst need? Makes sense if Google/Apple can take a controlling stake or even acquire Tesla. But just a few billions does them no good at all. Either acquire your competitor or watch them burn.About the next round of capital raise: Why does it have to be one of public equity or debt issue? Why not a private placement for a sufficiently large amount that is sufficient enough until Tesla is fully self funded?
There has been endless debates on how Apple or Google can/should make investment in Tesla. None have been materialized so far.
Why help one of the main future competitor in their direst need? Makes sense if Google/Apple can take a controlling stake or even acquire Tesla. But just a few billions does them no good at all. Either acquire your competitor or watch them burn.
Growth doesn't come easy, especially when you are so desperate you spend over $3 billion (Dr.Dre) for a mediocre headset maker. How is Project Titan going? How are Google's moonshot projects doing?
What I think is a good deal is Google/Apple investing, say $10 billion for 15% stake, valuing the company at around $66 billion. Compare that to Airbnb or Uber valuations, which barely have any moat.
You see glass half empty, I see half full. It is the same Tesla nevertheless, but our attitudes are different.
TSLA is a little lower than $30B now.Growth doesn't come easy, especially when you are so desperate you spend over $3 billion (Dr.Dre) for a mediocre headset maker. How is Project Titan going? How are Google's moonshot projects doing?
What I think is a good deal is Google/Apple investing, say $10 billion for 15% stake, valuing the company at around $66 billion. Compare that to Airbnb or Uber valuations, which barely have any moat.
You see glass half empty, I see half full. It is the same Tesla nevertheless, but our attitudes are different.
TSLA is a little lower than $30B now.
Option 1: G/A invests $3B to get 10% of the company. Say TSLA eventually grows to $1T (which I believe), and takes half the relevant market cap. This investment ends up with a gain of $97B.
Option 2: G/A spends $40B to acquire TSLA. EM quits and focuses on SpaceX. Losing EM's aura and vision, TSLA's part only grows to $500B. This investment ends up with a gain of $460B.
Option 3: TSLA dies and G/A's own project eventually shapes out OKish, and got 10% of the relevant market cap. This decision gives them $2000B*10%=$200B.
Option 4: TSLA struggles at the brink of bankruptcy and the market cap falls to $3B. G/A descends down and take TSLA. Grows it to 30% of its previous potential, or $300B. This decision gives them $297B.
Best option would be 2. Worst option would be 1.
I always have a hard time understanding why people fantasize G/A making an investment in TSLA at this stage. The talk between Page and Musk several years ago makes sense, because it was an acquisition. An investment in an important competitor without having a controlling stake is bad for your own business.
TSLA is a little lower than $30B now.
Option 1: G/A invests $3B to get 10% of the company. Say TSLA eventually grows to $1T (which I believe), and takes half the relevant market cap. This investment ends up with a gain of $97B.
Option 2: G/A spends $40B to acquire TSLA. EM quits and focuses on SpaceX. Losing EM's aura and vision, TSLA's part only grows to $500B. This investment ends up with a gain of $460B.
Option 3: TSLA dies and G/A's own project eventually shapes out OKish, and got 10% of the relevant market cap. This decision gives them $2000B*10%=$200B.
Option 4: TSLA struggles at the brink of bankruptcy and the market cap falls to $3B. G/A descends down and take TSLA. Grows it to 30% of its previous potential, or $300B. This decision gives them $297B.
Best option would be 2. Worst option would be 1.
I always have a hard time understanding why people fantasize G/A making an investment in TSLA at this stage. The talk between Page and Musk several years ago makes sense, because it was an acquisition. An investment in an important competitor without having a controlling stake is bad for your own business.
Yes there's certainly big uncertainty there. But EM himself said his major task with Tesla would be done when Model 3 ramps up. We're maybe more than half way through this, especially the vision and foundation of it. Rest is mainly execution, which actually may not be EM's strongest point.Only problem I see is that Option 2 has limited upside and might only top out at $80B (much like how AAPL only doubled after they lost their vision). Option 3 & 4's upside could also be limited due to a lack of vision.
Priceline (PCLN):
Total Revenue -- 9,223,987
Cost of Revenue -- 632,180
Gross Profit -- 8,591,807
Look at that margin! that's 93%!!!
I've commented before regarding the comparison of TSLA to "tech" companies and assuming the possibility of enormous ramps in PPS from here... but there's two things:
1) $7500 + ~$4000 (10% or more!) of Tesla's GM is tax incentives to their customers
2) Tesla will NEVER do what Priceline has done... because it is NOT a "tech" company
"The low stock price indicating lack of confidence"
there are a very large number of people that do not consider today's stock price as "low"... but instead incredibly high.
"If the path to tremendous growth was free of obstacles and confidence in management was high, it would already be reflected in a very high stock price and there would be little room for stock price appreciation"
again... what are you comparing "high" and "low" to?
I think for Apple, Tesla is surely a main competitor if left unchecked. Apple really needs the next thing to grow. Google, maybe not that much, they are venturing in many directions. But in general, EV, especially paired with autonomous, is the next big thing for any industry.Good analysis. However, I don't see Tesla as competitor for G/A. It is strategic partnership to grow together. Many such deals have happened, for example, Intel made minority equity investment in Spredtrum, to cement partnership Intel Tries To Conquer Mobile Market By Investing In Chinese Chip Makers
Similar partnership is appropriate with Tesla. Tesla isn't going to die. It might grow a little slow due to vagaries of public equity market, but it will prevail. Can G/A afford to invest later when Tesla grows to say $200 billion market cap? Investing in Tesla while it is still small is prudent.
There is definitely a strong SW component that adds value. Tesla wouldn't be selling as many cars if they hadn't gone with the 17" screen in the Model S, and the app where you can track the car, unlock the car, park the car, set up charging, fiddle with the A/C, etc also definitively adds value. You also have a lot of SW that the user never notices. Everything in the car is networked, and can be tweaked remotely. Tesla can know the status of every component, allowing them to diagnose problems and occasionally fix them remotely."there's a strong software component to the business that adds value"
it looks like this contradicts @Yggdrasill... each of the large auto companies have significant software components. the thing that is different about Tesla is their introduction of over the air updates and rapid deployments of software into their vehicles. This is my opinion... but I think this should be banned by the NTSB.
My understanding is that the factory has been shut down the previous week. My thinking is that they've probably upgraded the Model X production line to be able to build the RHD and five seat Model X. This increases the available market for the Model X sufficiently to discontinue the 60 kWh Model X.Could well be a coincidence but over on the model X threads looks like production of the first RHD model X cars is imminent.
All comparisons break down somewhere. Tesla is a unique company.Tesla is nothing like Samsung. Samsung is a government dependent conglomerate that receives tens of billions of dollars in direct government support.
Samsung literally makes and sells everything, even products that don't make sense, because it has to.
Tesla is more like Apple than Samsung.
I think they can get to close to 900k without the expansion. They are planning for that without the Model Y.I think the Fremont expansion is to take the production capacity from 400-500k per year to closer to 900k. Tesla will need this capacity when they are going to start producing the Model Y, hopefully late 2018.
The more I think about it, the more I come to the conclusion that level 5 autonomy is a gamechanger........ It will change society in a profound way. Driving as a profession will be gone (except in motor sports).