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Discussion in 'TSLA Investor Discussions' started by FirebirdAlpha, Jul 9, 2018.
Simple poll to see what people think.
Why not just buy Ford?
No way. Anyone who can do math and read a balance sheet knows the answer is "no". Even if the next two quarters are as capex-heavy as Q1 and operating profits don't increase at all over Q1 -- neither of which is likely.
Now, if you asked whether they'd need to raise money in *2019*, that would be a much more interesting question. But you asked about *2018*.
Opportunistic raise is always a possibility.
Pretty much anything is always a possibility, but the poll question asked "will?"
Seriously, why not buy Ford? Based on how the market is valuing the two companies, it clearly believes Ford’s assets would be better used in the hands of Tesla’s management.
$18B in cash. Lots of capacity to build trucks & SUVs, markets Tesla will soon be moving into, and in which ICE vehicles will soon be economically unviable. Large workforce with no economic future in building ICE vehicles, but many could be useful building EVs.
Downsides. I believe Ford family has enough controlling interest that it would have to be a friendly acquisition. The financing arm could be a disaster in a recession— this would require a lot of due diligence and be a potential dealbreaker. Legacy costs of a unionized workforce could be a dealbreaker as well.
I agree with this, but you could also argue that in order to meet 2019-2020 goals for semi and Y, they need to raise now (raising takes time).
With that said in the strictest sense they dont 'need' to raise in 2018
Like most people I voted 'no'.
I think the much bigger question is how Tesla can change conditions so that periodically raising money is reliably doable.
A major part of the problem is that the SP had too much future priced into it as the model 3 rolled out. A lower SP rising as model 3 production is proven would be a healthier environment.
Musk leaves no room for pleasant surprises. Jobs/Apple carefully crafted a very different environment of expectations.