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Potential buyer issue: What if?

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So, suppose I buy a new Tesla (Model 3, Long Range) and the company goes bankrupt? Has there been any talk that someone might come in and pick up the pieces and put the business back together? It would seem to me that--whether or not the company can continue building cars, there ought to be a decent business in servicing the existing fleet--since these are so different from other cars most mechanics might not want to deal with them.
Or am I being hopelessly optimistic, and there is a good chance that Tesla will just go out of business?
I have to say I am a bit worried about buying into this . . .
 
What would particularly prompt you to have that kind of concern since Tesla was founded in 2003 or 16 years so far and each year there has been a prediction of its demise? Is 2019 riskier than 2003?

his concern is prompted by the fact that he/she might buy a tesla and now he would actually have interest in the company.

just because a company hasn't gone bankrupt doesn't mean it won't.
 
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...his concern...

The bankruptcy risk is negligible in 2019 comparing to the past such as when it was an unknown private car company since 2003.

In the old days, it was very difficult to get fundings because of being an unknown private car company.

Ever since it has become a public company in 2010, whatever cash it has needed has been supported by the vast resource from the public.

All USA car companies went bankrupt except for 2: Ford and Tesla.

So despite all of the negative views, Tesla is here to stay.

But let's suppose if Tesla will go belly up, it could be bought by Google / Waymo, Apple, and I hope not by Uber.
 
While I think Tesla is here to stay, I feel that if it were to fail it wouldn't be a huge disaster for current owners. I think someone would probably find a way into the software at some point, there'd be open source patches and software available, similar to jailbraking on iOS (hopefully much more carefully made/vetted for safety though). The remote possibility of Tesla failing is, however, the main reason I want them to make a ChadeMo or CCS adapter for the model 3, in case the supercharger network is discontinued. I'm sure someone could, at the very least, hack the model S/X ChaDeMo adapter to work with the model 3 at some point at the very least.
 
Nobody has talked about it.
But the normal result is either
(1) Liquidation
(2) Chinese company buys it

There are already independent people who work on Teslas.
Replacement parts would be the biggest issue in case of liquidation.

It would never ever be liquidated, not in a million years. Tesla in bankruptcy, free of their debt, would be intensely valuable. The most likely option would be a bankruptcy restructuring.

p.s. I now have 666 total posts.

**looks for devil hand signal emoji**
 
GM went bankrupt, Chrysler went bankrupt, Fiat went bankrupt. Lots of auto manufacturers have gone bankrupt.

It is a process to reorganize and dump debt.

Tesla has gotten close to bankruptcy a few times, but are much stronger now.

Tesla is from a stock market valuation more valuable than GM or Ford, but they both have much more debt than Tesla.

Elon is a billionaire. In the past he has been willing to risk his own personal fortune to back the company.
 
There are only two scenarios where Tesla would go out of business at this point: a big mistake with a product launch, and a major economic downturn. Probably something worse than 2008.

They came close to the first error with the Model 3 launch with the production problems, but they pulled it out. Now they are on the backside of that, that scenario becomes less likely to kill them in the future.

If Tesla were to fail, somebody would buy them and put the cars back into production because there is a strong demand for them. Even if they went out of business entirely, the aftermarket world would support the existing fleet. Look at what has happened with the DeLorean. The entire production of the DeLorean was a tiny fraction of Tesla's output to date and there is a good support network out there keeping the fleet on the road.
 
Nobody has talked about it.
But the normal result is either
(1) Liquidation
(2) Chinese company buys it

There are already independent people who work on Teslas.
Replacement parts would be the biggest issue in case of liquidation.

I tend to doubt either of these options. As noted by others, there is no possibility of liquidation - the brand is simply too valuable. It would more certainly be restructured and keep on operating independently. Or it would be sold.

As to the buyer, I would expect a German buyer. If you add Tesla's tech to Daimler's cachet and expertise in the luxury frippery and branding, you'd have one heck of a powerful company. A Chinese owner - especially with the current issues - isn't very likely I think. A Chinese owner would pull down the value of the brand - certainly in the West, but even in China, where luxury generally means German.

In either case, the existing cars will continue to be supported - probably better than Tesla does right now.
 
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Elon is a billionaire. In the past he has been willing to risk his own personal fortune to back the company.

He's only a billionaire based on the value of the TSLA stock he owns.

If Tesla were to be in a bankrupt situation, the stock price, and his net worth would plummet. And at that point, he's likely restricted from dumping his own shares into cash, or if he's not, that would just signal to the investing public that the company is in serious trouble, further depressing the stock price.

CEOs like Musk generally sell a small, fixed chunk of their stock each week or month for living expenses... it's constant and known as to not spook investors that the leader is dumping shares because of some problem with the company.
 
Tesla has way too much potential value to make this even remotely an issue. Delorian sold only a few cars, and there is still service, and even some new cars being produced. However, the possibility of Tesla going bankrupt exists only in the minds of FUDsters. They have good cash flow, new products, and good demand.
 
There are only two scenarios where Tesla would go out of business at this point: a big mistake with a product launch, and a major economic downturn. Probably something worse than 2008.

They came close to the first error with the Model 3 launch with the production problems, but they pulled it out. Now they are on the backside of that, that scenario becomes less likely to kill them in the future.

If Tesla were to fail, somebody would buy them and put the cars back into production because there is a strong demand for them. Even if they went out of business entirely, the aftermarket world would support the existing fleet. Look at what has happened with the DeLorean. The entire production of the DeLorean was a tiny fraction of Tesla's output to date and there is a good support network out there keeping the fleet on the road.

Thanks! The DeLorean example is one that suggests that I buy, regardless.
 
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What would particularly prompt you to have that kind of concern since Tesla was founded in 2003 or 16 years so far and each year there has been a prediction of its demise? Is 2019 riskier than 2003?

Fair question, given the number of Tesla/Musk haters out there.
Mostly it's what dethman says--now I care about what happens to Tesla.
It's also that Teslas are so different from other cars--even other electrics like the Bolt and Leaf. It's hard for me to imagine that random auto mechanics will be able to work on a lot of aspects of Teslas unless there is an infrastructure of parts suppliers and computer folks to support and guide them.
Thanks to everyone who has given ideas of why Tesla won't fail, and especially to those who have given ideas of why there will be buyers for the stuff that could keep Teslas running if it does fail.
As you can probably tell, I'm a bit of a risk averse guy, and one who sees the cloud forming around every silver fabric.
 
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I tend to doubt either of these options. As noted by others, there is no possibility of liquidation - the brand is simply too valuable. It would more certainly be restructured and keep on operating independently. Or it would be sold.

As to the buyer, I would expect a German buyer. If you add Tesla's tech to Daimler's cachet and expertise in the luxury frippery and branding, you'd have one heck of a powerful company. A Chinese owner - especially with the current issues - isn't very likely I think. A Chinese owner would pull down the value of the brand - certainly in the West, but even in China, where luxury generally means German.

In either case, the existing cars will continue to be supported - probably better than Tesla does right now.

Volvo sales USA:
Code:
2018 	98.263 	0,57%
2017 	81.507 	0,47%
2016 	82.593 	0,47%
2015 	70.047 	0,40%
2014 	56.366 	0,34%
2013 	61.233 	0,39%
2012 	68.117 	0,47%
2011 	67.240 	0,53%
2010 	53.948 	0,47%

Volvo seems to be doing OK since Geely bought it in 2010.
 
Volvo sales USA:
Code:
2018     98.263     0,57%
2017     81.507     0,47%
2016     82.593     0,47%
2015     70.047     0,40%
2014     56.366     0,34%
2013     61.233     0,39%
2012     68.117     0,47%
2011     67.240     0,53%
2010     53.948     0,47%

Volvo seems to be doing OK since Geely bought it in 2010.

Volvo has always run under the radar, and has never been considered a major automaker. Tesla is a bit of an American jewel, and it would be a blow to the west to have China take it over. German ownership would be okay.
 
The bankruptcy risk is negligible in 2019 comparing to the past such as when it was an unknown private car company since 2003.

In the old days, it was very difficult to get fundings because of being an unknown private car company.

Ever since it has become a public company in 2010, whatever cash it has needed has been supported by the vast resource from the public.

All USA car companies went bankrupt except for 2: Ford and Tesla.

So despite all of the negative views, Tesla is here to stay.

But let's suppose if Tesla will go belly up, it could be bought by Google / Waymo, Apple, and I hope not by Uber.

Pray to God it won't be a Chinese company.
 
I tend to doubt either of these options. As noted by others, there is no possibility of liquidation - the brand is simply too valuable. It would more certainly be restructured and keep on operating independently. Or it would be sold.

As to the buyer, I would expect a German buyer. If you add Tesla's tech to Daimler's cachet and expertise in the luxury frippery and branding, you'd have one heck of a powerful company. A Chinese owner - especially with the current issues - isn't very likely I think. A Chinese owner would pull down the value of the brand - certainly in the West, but even in China, where luxury generally means German.

In either case, the existing cars will continue to be supported - probably better than Tesla does right now.

The Chinese definitely want to take over Tesla and other auto makers outside of China tend to have a "not invented here" attitude that would likely lead them to pass on picking up Tesla. The US government might be opposed to a Chinese sale, but if the Chinese were the only buyer, they might get it.

Fair question, given the number of Tesla/Musk haters out there.
Mostly it's what dethman says--now I care about what happens to Tesla.
It's also that Teslas are so different from other cars--even other electrics like the Bolt and Leaf. It's hard for me to imagine that random auto mechanics will be able to work on a lot of aspects of Teslas unless there is an infrastructure of parts suppliers and computer folks to support and guide them.
Thanks to everyone who has given ideas of why Tesla won't fail, and especially to those who have given ideas of why there will be buyers for the stuff that could keep Teslas running if it does fail.
As you can probably tell, I'm a bit of a risk averse guy, and one who sees the cloud forming around every silver fabric.

I'm fairly risk adverse myself. I waited until 2016 to buy to allow the early bugs in the Model S to get worked out. It's been a fantastic car. For the risk adverse I would recommend ordering a car somewhere in the middle of a quarter. From my anecdotal observations (and my one personal data point) cars built in the middle of quarters tend to be better quality than those built at the end when there is a mad rush. I ordered at the end of April, the car was built in late May, and I took delivery on June 6. All the problems have been minor (buzzing headlight problem from the early refresh cars, a speaker that distorted sometimes, and a few other things on that scale).

As far as working on Teslas go, there is a growing community of people putting salvaged cars back on the road and the consensus is that Teslas are one of the easiest cars to work on. If Tesla were to fail there would be a lot of Tesla engineers out on the street who know how all the electronics work and they would likely reverse engineer their own work and set up a company provided electronics to the existing fleet.

At this point it's all an unlikely scenario though. The term on this forum for the naysayers is FUD (fear, uncertainty, and doubt) and the FUDsters have made a big deal about Tesla's lack of positive cash flow over its history, but Amazon didn't make a profit until a couple of years ago for the same reason Tesla hasn't made a profit, they were plowing all the money they made back into expansion and R&D.

Tesla's profit margin on their cars is the largest in the automotive industry. If they just made cars and didn't do any R&D, they would be very profitable. Tesla is still very small for a car company and their R&D and expansion budget is a much larger percentage of the company's revenue than most other car companies.

Elon demonstrated that the company could be profitable a couple of quarters in a row if they pull in their horns and concentrate on making cars while slowing down some of the R&D. There are rumors there was going to be a refreshed Model S and X last fall, but due to the losses with the Model 3 launch problems they pushed it back a year.

If we do have a big economic downturn (at least a small one is inevitable soon), I think the other three US automakers will be in a lot more trouble than Tesla. All three sell a lot of trucks, but none are all that healthy economically and with the world electrifying their products are looking more and more stale by the day.
 
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CEOs like Musk generally sell a small, fixed chunk of their stock each week or month for living expenses... it's constant and known as to not spook investors that the leader is dumping shares because of some problem with the company.

True for other CEOs, but Elon does not sell TSLA stock. He does borrow against its value though.

Are there other CEOs who buy 10s of millions of dollars of their conpany's stock?