Tesla/Solar City merger

[Hawkeye10]

Yeah, I saw that about Nintendo. All that massive hype over Pokemon Go and Nintendo is getting squat from it...weird.

There is that, but my main point is that people where putting their money into Nintendo, a company that has done very little well of late and just sold the Mariners to raise money for their last gasp, which is going to be to make movies believe it or not (and they want to do the work themselves, like they can be expected to luck into being good at it), because of the buzz of Pokemon Go....which they dont own, and will get little money from.

Now me, I am old school, I need to know what I am trading my money for before I do the trade.

Clearly there are many who dont share this stipulation.

Which gets us to Musk.

Ya know?

 

[Hawkeye10]

Space x seems to be doing better.

"seems to be" because we dont have access to their books....

In theory this company can or will make money, but who knows......

 

[DA60]

There is that, but my main point is that people where putting their money into Nintendo, a company that has done very little well of late and just sold the Mariners to raise money for their last gasp, which is going to be to make movies believe it or not (and they want to do the work themselves, like they can be expected to luck into being good at it), because of the buzz of Pokemon Go....which they dont own, and will get little money from.

Now me, I am old school, I need to know what I am trading my money for before I do the trade.

Clearly there are many who dont share this stipulation.

Which gets us to Musk.

Ya know?

Nintendo owned the Seattle Mariners? If I knew that, I had forgotten it.

All I know is their stock price plummeted a few days ago.

But it is still over $25 when for months it has been trading between $16-$20.

So if the fallout from the 'we-make-squat-from-Pokemon Go' sell off gets no worse, they have actually done very well this month...stock price wise.

Big 'if' though.

 

[Hawkeye10]

Nintendo owned the Seattle Mariners? If I knew that, I had forgotten it.

All I know is their stock price plummeted a few days ago.

But it is still over $25 when years it has been trading between $16-$20.

So if the fallout from the 'we-make-squat-from-Pokemon Go' sell off gets no worse, they have actually done very well this month...stock price wise.

Big 'if' though.

Kinda like driving a jalopy down the road and being excited that it made it one more mile.....

They owned the majority share for a bunch of years, it was their last nest egg.

 

[jet57]

Some other benefits from merger:

Lower acquisition costs of Solar City through more recognizable and trusted brand name under Tesla, and eliminating retail stores by merging into Tesla stores.


Allow Solar City to receive batteries from the gigafactory at cost.


The timing is pretty good also, as the price of Solar City is down significantly the last year. Both companies already share the bulk of their boards, and founders and CEO are related to Musk.

You don't work for'em at all do 'ya...

 

[austrianecon]

They are ahead of schedule on the gigafactory with grand opening next month, and Panasonic is expected to be creating the car batteries in November, also ahead of schedule. The Model 3 is also much simpler to manufacture then previous cars. It is smaller, no falcon winged doors, nowhere near all the gadgets. I think it is a mistake to compare the previous models and delays with it. Now they may be a little late on their ambitious goals but I bet if they are it will be more like 6 months late and not two or three years.

Telsa has issues. It's over valued on the NASDAQ. It's actually borrowing against it's assets to stay afloat right now. Not a good combo.

Elon Musk is a forward thinker and that's good.. but he's got his hands in too many pots right now. SpaceX is more of a vision he should pursue as it's coming a long much better then trying to get Americans to buy electric cars when it's almost impossible to charge those cars (which still isn't green energy).

 

[austrianecon]

I believe Tesla has great margins on their products and could easily be profitable if they wanted to stay small, but they are spending large amounts of money in laying the foundations for future growth. For example they are building out supercharger networks, buying suppliers so they can vertically integrate, building a battery gigafactory, and as this is new technology spending a lot on research and development.

Tesla would go bankrupt if it wasn't for idiots throwing cash at it (taxpayers).. Tesla would have been bankrupt years ago because Musk works under the idea.. that "his emerging empire is a public-private financing model" full of long shots.

Telsa doesn't have great margins, it never has. Still doesn't have the ability to provide access to charging needed.

 

[Hawkeye10]

Tesla would go bankrupt if it wasn't for idiots throwing cash at it (taxpayers).. Tesla would have been bankrupt years ago because Musk works under the idea.. that "his emerging empire is a public-private financing model" full of long shots.

Telsa doesn't have great margins, it never has. Still doesn't have the ability to provide access to charging needed.

I wonder who is going to want to buy a huge ass factory 30 minutes outside of Reno, which is itself....remote.

Maybe the taxpayers, like ConRail.

 

[austrianecon]

Musk stated today that the model 3 is fully engineered and they are on schedule for production beginning early next summer, and that once at full production will generate 20 billion gross revenue and 5 billion gross profit. Also, the gigafactory, which is ahead of schedule, will have the ability to produce 3X more than originally planned.

So that $5b is really just net profit for couple hundred million.. which won't happen until at least 2018 or 2019 at the earliest.

 

[austrianecon]

I am fairly positive they have their liability contingencies in place, such that, even if a high end estimate of autonomous driving failures materialize, it won't amount to much.

On the basis of damage inflicted per mile driven, current test models exponentially outperform their human counterparts in every way.

Yes, but Kush, would you not admit that for one to use an autonomous system one would have to legally give their rights away (sign agreement) which would limit liability and for that to happen you need States and Federal Government support to do this.. much like Vaccine manufactures get in the US with the National Vaccine Injury Compensation Program?

 

[austrianecon]

I would hope you still have that option as well. I personally don't get as much joy out of driving as i used to. Traveling 3-4 times per year to random cities across the country has taken the fun out of it. Also, Uber is just so damn convenient in large cities.

I know this is off topic.. (I am guessing you are in the US).. but this is something that irks me as well. I love the fact when I am in Europe for almost 8 months out of the year the ease of travel (mass transit) that lacks in the US. I dread coming back to the States cause A) I gotta drive or B) someone else drives. US really missed the boat over the last 8 years in infrastructure projects it could have done to boost the economy in the area of Mass Transit. It also irks be that US DoT gives grants out to cities like Columbus, Ohio worth $50m and it's not gonna really address the issue of lack of mass transit but to develop automated driving systems.

 

[Hawkeye10]

Yes, but Kush, would you not admit that for one to use an autonomous system one would have to legally give their rights away (sign agreement) which would limit liability and for that to happen you need States and Federal Government support to do this.. much like Vaccine manufactures get in the US with the National Vaccine Injury Compensation Program?

Because under the guidance of the elite through our government liability law is a wreck which is hurting this nation and its people a great deal, so when something important comes along we need to figure out a workaround, because unlike everything that does not get done because liability law sucks this (what ever it is) needs to happen.

Usually we do like we are doing for the Cal High Speed Rail System, we pay 20-30 times too much (more than the rest of the world needs) to get permits, or we we just scrub the project.

 

[austrianecon]

There is that, but my main point is that people where putting their money into Nintendo, a company that has done very little well of late and just sold the Mariners to raise money for their last gasp, which is going to be to make movies believe it or not (and they want to do the work themselves, like they can be expected to luck into being good at it), because of the buzz of Pokemon Go....which they dont own, and will get little money from.

Uh, Nintendo was gonna sell Mariners for the last 2 years. It was just finalized.. They still own 10%. Nintendo is working on the NX (whatever that is).

 

[laska]

Telsa has issues. It's over valued on the NASDAQ. It's actually borrowing against it's assets to stay afloat right now. Not a good combo.

Elon Musk is a forward thinker and that's good.. but he's got his hands in too many pots right now. SpaceX is more of a vision he should pursue as it's coming a long much better then trying to get Americans to buy electric cars when it's almost impossible to charge those cars (which still isn't green energy).

Tesla has a debt to asset ratio of .27 as of March 2016, which seems to be a very attractive ratio, defined as low debt ratio in the following article What is a good debt ratio, and what is a bad debt ratio? | Investopedia. With the revenue from the model 3, growth will progressively use less debt for growth. The high valuation is actually great for the company as it allows Tesla to raise money more cheaply. As an investor if you do not see or agree with Musk's vision of a future trillion dollar company and think it is overvalued, don't invest. Me personally, I think if there is no national/worldwide economic collapse, Tesla will likely be a trillion dollar company with the foundation they are building. As far as charging, are you not familiar with the Tesla supercharger network and how easy it is for people to charge the cars at home at night? https://www.tesla.com/supercharger

 

[austrianecon]

Nintendo owned the Seattle Mariners? If I knew that, I had forgotten it.

Yeah they bought them in the early 1990s for $125m and sold them for between $1.2 - $1.3b.

 

[laska]

Tesla would go bankrupt if it wasn't for idiots throwing cash at it (taxpayers).. Tesla would have been bankrupt years ago because Musk works under the idea.. that "his emerging empire is a public-private financing model" full of long shots.

Telsa doesn't have great margins, it never has. Still doesn't have the ability to provide access to charging needed.

Tesla is one of the few auto manufacturers who haven't gone bankrupt.

 

[austrianecon]

Tesla has a debt to asset ratio of .27 as of March 2016, which seems to be a very attractive ratio, defined as low debt ratio in the following article What is a good debt ratio, and what is a bad debt ratio? | Investopedia. With the revenue from the model 3, growth will progressively use less debt for growth. The high valuation is actually great for the company as it allows Tesla to raise money more cheaply. As an investor if you do not see or agree with Musk's vision of a future trillion dollar company and think it is overvalued, don't invest. Me personally, I think if there is no national/worldwide economic collapse, Tesla will likely be a trillion dollar company with the foundation they are building. As far as charging, are you not familiar with the Tesla supercharger network and how easy it is for people to charge the cars at home at night? https://www.tesla.com/supercharger

And of as March 2016, it's debt to equity is 264.12 (means its highly leveraged).

Model 3 isn't even being built yet, nor is it being sold. So it's fantasy numbers.

The high valuation is fantasy just as previous tech booms (Dot Com bubble).


I get Musk's future. But Musk has no skin in the game anymore. He's made his money from Tesla thru his salary for many years (as high as $77m in 2012/2013). Telsa will never be a trillion dollar company. GM, Ford or whoever could crush them in a heart beat.

 

[austrianecon]

Tesla is one of the few auto manufacturers who haven't gone bankrupt.

LMAO, you have to work for Tesla because Tesla is sucking at the same teet as GM as both would have bankrupted in 2009/2010 if not for the Government.

 

[laska]

And of as March 2016, it's debt to equity is 264.12 (means its highly leveraged).

Model 3 isn't even being built yet, nor is it being sold. So it's fantasy numbers.

The high valuation is fantasy just as previous tech booms (Dot Com bubble).


I get Musk's future. But Musk has no skin in the game anymore. He's made his money from Tesla thru his salary for many years (as high as $77m in 2012/2013). Telsa will never be a trillion dollar company. GM, Ford or whoever could crush them in a heart beat.

Given there was almost 400,000 people in a two week period that put $1000 down on a car that won't be available until next Summer, I'd say the demand is more than fantasy. The debt to equity is high but understandable given the high costs of the foundation they are laying for future growth. Things like the gigafactory and supercharger networks are expensive. And Musk was all in with his wealth with Tesla from the outset. That is one of the reasons investors like him, he puts his skin in the game. You obviously are not high on Tesla, a position by the way that historically has not paid well. Maybe you should short the stock.

 

[laska]

LMAO, you have to work for Tesla because Tesla is sucking at the same teet as GM as both would have bankrupted in 2009/2010 if not for the Government.

Tesla paid the loan off WAY early, and the taxpayers made money off it. And they didn't go bankrupt, did they. And the position that they would have is debatable. Musk has always stated the loan was helpful in speeding up development but that it wasn't necessary for survival.

 

[Hawkeye10]

Tesla paid the loan off WAY early, and the taxpayers made money off it. And they didn't go bankrupt, did they. And the position that they would have is debatable. Musk has always stated the loan was helpful in speeding up development but that it wasn't necessary for survival.

And yet we see him desperate enough to go after a $300 million no interest loan from probable future customers,

 

[austrianecon]

Tesla paid the loan off WAY early, and the taxpayers made money off it. And they didn't go bankrupt, did they. And the position that they would have is debatable. Musk has always stated the loan was helpful in speeding up development but that it wasn't necessary for survival.

LOL, you think it's about the loan.. it's about the subsidies.

 

[laska]

Elon Musk has very grandiose dreams and my hats off to him, but the main problem is the technology. Batteries are just nowhere near as efficient as they should be for any of his ideas to work properly. Until the tech is improved it will be an uphill battle for electric cars.

By 2020 Tesla believes the battery cost will be at or below $100/Kwh. That has long been the price point target to where EV beats ICE. Right now Tesla's batteries are getting 250-300 miles per charge, with eight yr warranty and unlimited miles on battery. So the quality of the battery is there now, it is all about lowering costs. Tesla CTO Straubel stated that "battery energy density has doubled over the last ten years and that the curve is not starting to plateau." With the continual improvements in chemistry to get better and better energy density, and the gigafactory creating economies of scale, supply chain optimization, increased automation, and domestic production, Tesla is doing everything to lower the costs.

 

[Hawkeye10]

By 2020 Tesla believes the battery cost will be at or below $100/Kwh. That has long been the price point target to where EV beats ICE. Right now Tesla's batteries are getting 250-300 miles per charge, with eight yr warranty and unlimited miles on battery. So the quality of the battery is there now, it is all about lowering costs. Tesla CTO Straubel stated that "battery energy density has doubled over the last ten years and that the curve is not starting to plateau." With the continual improvements in chemistry to get better and better energy density, and the gigafactory creating economies of scale, supply chain optimization, increased automation, and domestic production, Tesla is doing everything to lower the costs.

Offering a warranty for X number of years does not mean that the company that made it thinks it is likely to last X years. Very often they make it so that the warranty is hard to use, or impossible to use (ORIGINAL OWNER ONLY when few people will keep it that long), or they just say that if they ever get to that point they will figure out how to get the bills paid then .....cause right now they are fighting a desperate battle to get to that point alive.

 

[laska]

LOL, you think it's about the loan.. it's about the subsidies.

“None of the incentives are necessary. They are all helpful,” Musk countered, describing the various incentives as catalysts that speed up the rate of innovation, offered because voters “want a particular thing to happen, and want it to happen faster than it would otherwise occur.”

Short the stock. Maybe you'll do better than past shorts.