Apple shrinks project Titan - still has $250B cash - Tesla purchase?

[calisnow]

So in the last couple days these two things have happened:

1 - Musk announced that Tesla has pulled significant new capabilities out of existing autopilot hardware, showing the world Tesla is still pulling rabbits out of hats. Apple may not be able to innovate on its own - but it can buy someone who can.

2 - Apple has reportedly chopped Project Titan's staff in half after months of rumors that it was unhappy with the progress of the division.

Tesla has a market cap of $30B - and Apple is still sitting on $250B in cash. It could swallow Tesla without even taking time to chew.

GM reportedly paid $1B for Cruise - a startup with 12 employees and no product.

That makes Tesla look like a great buy - for $30B you can buy an actual carmaker with actual sales, a store network, a rapid charging network, the most advanced autonomous driving technology available, hundreds of thousands of cars on the road gathering data for fleet learning, one helluva brand name, hundreds of thousands of orders for a product which does not yet exist and a new charismatic genius leader to give Apple the sexy back that was lost when Steve Jobs passed away.

Any fresh thoughts? This has been beat to death in the past but Apple pivoting on Titan at the same time that Tesla announces rather stunning new progress on existing autopilot hardware has got me thinking again...

 

[flashflood]

At least we'd finally get CarPlay.

 

[techmaven]

On the surface, it looks like a fantastic fit. Apple gets to be relevant in some of the transformations technologies happening on the next decade or two, even if they are a bit outside their known arenas, and Tesla gets the capital, stability, software and supply chain expertise of Apple.

However, I don't trust Apple management in this regard right now. Just a feeling. But I don't think they are nearly as committed to the vision that would make Mr. Musk or Mr. Straubel comfortable.

 

[calisnow]

However, I don't trust Apple management in this regard right now. Just a feeling. But I don't think they are nearly as committed to the vision that would make Mr. Musk or Mr. Straubel comfortable.

Good point.

 

[ecarfan]

Tesla has a market cap of $30B - and Apple is still sitting on $250B in cash. It could swallow Tesla without even taking time to chew.

In my opinion Elon won't sell, and without his support a sale won't happen, so I think this discussion is moot.

Apple is welcome to invest heavily in Tesla, however.

 

[flashflood]

On the surface, it looks like a fantastic fit. Apple gets to be relevant in some of the transformations technologies happening on the next decade or two, even if they are a bit outside their known arenas, and Tesla gets the capital, stability, software and supply chain expertise of Apple.

However, I don't trust Apple management in this regard right now. Just a feeling. But I don't think they are nearly as committed to the vision that would make Mr. Musk or Mr. Straubel comfortable.

The only real synergy is that Tesla needs cash and Apple needs a visionary CEO. But I suspect that particular marriage would be bad for both companies.

 

[calisnow]

I wonder if there have ever been secret talks, or a dinner on a yacht somewhere with Elon and Tim Cook. Cook says "Elon, you are the most interesting man in the world" and then scribbles "$50B" on a napkin and slides it across the table. Elon laughs, says "I know I am."

Then he climbs in a helicopter and flies away, leaving Cook to have dessert all alone, staring at the ocean while contemplating the iwatch and the lack of a headphone jack on the iphone 7.

 

[Sir Guacamolaf]

We've been down this road before.
Tesla's Elon Musk confirms talks with Apple, says acquisition 'very unlikely' at this time

Tesla would be acquired by Apple would by synonymous to Elon being pushed out. Not unthinkable, Apple has some muscle. But, anyone knows Tesla - Elon != Tesla. Carplay would be nice though.

 

[Cosmacelf]

Won't happen without Elon's support. Maybe it could happen after Model 3 is well established and Elon exits the CEO role. By the then the market cap would be $60B and Apple's cash might be less.

One caveat though. Elon is committed to getting electric cars mainstreamed. If Tesla were to stumble badly (think factory blows up, really bad AP crashes occur, a giant recession hits the stock market, and another rocket blows up) causing Tesla to need cash badly yet being blocked from raising any, THEN I could see Elon selling to Apple after a bunch of guarantees. He always has a backup plan...

 

[calisnow]

I wonder if an acquisition after the Model 3 launch is possible - letting Elon cash out and focus all his energy on Space X - which I have read is his real true love.

 

[Mo City]

Understand this one thing: If Tesla is sold, it will be for a LOT more than whatever it's current market cap is at the time of purchase.

 

[EinSV]

I can see why Apple would want to do this since their pipeline seems to be dry but would see this as a huge negative for Tesla. Tesla is hitting on all cylinders right now -- hugely successful Model 3 introduction, industry-leading Autopilot technology, fastest production car in the world, factory cranking out Model S and X smoothly and efficiently, far ahead of the competition in cost-effective battery production and very close to being able to sell Powerpack and Powerwall products at significant volumes and profits.

Tesla will need $1-2 billion to finish the Model 3 ramp which they'll easily raise in the capital markets. Any significant Apple investment would come with strings attached, which is not in the best interest of Tesla or its future customers IMO. Tesla is performing exceptionally well as a fully independent company. It should stay that way.

 

[number12]

I can see why Apple would want to do this since their pipeline seems to be dry but would see this as a huge negative for Tesla. Tesla is hitting on all cylinders right now -- hugely successful Model 3 introduction, industry-leading Autopilot technology, fastest production car in the world, factory cranking out Model S and X smoothly and efficiently, far ahead of the competition in cost-effective battery production and very close to being able to sell Powerpack and Powerwall products at significant volumes and profits.

Tesla will need $1-2 billion to finish the Model 3 ramp which they'll easily raise in the capital markets. Any significant Apple investment would come with strings attached, which is not in the best interest of Tesla or its future customers IMO. Tesla is performing exceptionally well as a fully independent company. It should stay that way.

Firing on all cylinders? Have you seen the stock price?

 

[EinSV]

Firing on all cylinders? Have you seen the stock price?

Oh sure. The stock price has been impacted this year by such things as a phony suspension scare, a woman hitting the accelerator instead of the brake and running into a nail salon, fear over the introduction of Autopilot technology that is the best in the industry, a SpaceX mishap that has nothing to do with Tesla, and similar nonsense.

These fears are exacerbated and blown way out of proportion by a legion of short sellers and their minions who run around in the press and infest websites like TMC to try to fan the flames of fear, and generally try to run down the company to lower its stock price.

The field of Behavioral Finance is just getting its legs. In the future Tesla could be a great case study for the Behavioral Finance textbooks on how fear and fearmongering artificially depress stock prices.

In the meantime, I try to focus on how the company is performing on the ground. And IMO Tesla is kicking some serious hindquarters this year, after getting off to a rocky start with the Model X intro.

 

[FlatSix911]

Another factor... Apple is not interested in the ugly sister, Solar City

 

[CuriousG]

Forgot the new black of jet black of the iPhone 7, try solar panel black!

 

[rypalmer]

Apple is not a manufacturing company so I personally doubt they'll buy one (yes Tesla is a software company but it is also ridiculously vertically integrated). I think they could be a lot more strategic and partner with an OEM, but based on recent news, they may have just pivoted.

 

[1208]

Then he climbs in a helicopter and flies away, leaving Cook to have dessert all alone, staring at the ocean while contemplating the iwatch and the lack of a headphone jack on the iphone 7.

Contemplating.. you are giving him too much credit, the ability to reason and think. Just staring blank into the ocean is more like it.

 

[thecloud]

Tesla is hitting on all cylinders right now --

Ironic how we still describe Tesla's success using a term derived from the internal combustion engine.

 

[GoTslaGo]

Another factor... Apple is not interested in the ugly sister, Solar City

Well Apple does have a subsidiary "Apple Energy LLC" which plans to sell excess renewable energy. So Solar roofs may not be too far fetched for Apple.

http://www.renewableenergyworld.com...s-rooftop-solar-energy-from-headquarters.html