Like many Tesla bears, he seems insulted by Tesla’s success and refusal to act like a normal auto company. Your description of his debate style is perfect. It’s exactly the same as the Tesla curmudgeons I’ve written many rants against. Any debate is impossible to win because their confirmation bias is all consuming. But they don’t matter any more.
Random thought. Tesla spent only $1.3bil on CAPEX in 2019 but is enough to fuel 50% growth in 2020. Elon says Tesla is spending as much as they need. With $6.3bil in the bank and spending less than half of their operating cash flows on CAPEX, wouldn't it be a good idea to dump the rest of the cash to buy back its own stock? Especially if TSLA doubles in a year or two. It'd be a good investment for them just to buy now at $640 and then sell it back as a capital raise for $1500. Seems like a good idea but am I thinking about this in a wrong way?
Apple disassembles their electronics with some clever automated machinery to reclaim materials for recycling. Will be great if/when Tesla can do the same with their batteries. I assume JB will be the go-to-man for this when it happens.
Didn’t call in rich but did stay home today for some powerwall installation. It’ll be finished up tomorrow.
Jeebus. These people are *just now* thinking about this? I’m glad I have access to “retail investors”.
Yes, such a bet could pay off, but there’s risk with such a strategy. The stock price can be fickle and in case of an economic downturn Tesla could be left with less cash, lower stock price and lower revenue. Tesla may need a good portion of that cash to fund an alien dreadnaught battery factory, the likes of which the world has never seen. I think battery day will boil down to Elon Musk persuading investors that Tesla’s continued success depends on investing billions in an unimaginable and revolutionary battery production facility. He loves big leaps in advances and capability. I expect the plans to be awesome in scope, scale, cost, and market impact.
I went to a Tesla owners roundtable up in Squaw Valley a couple years ago. The speaker spoke about how essential it was for Tesla to be successful with the Model 3 - check! But he also spoke about the future of Tesla battery recycling... and for what it is worth, he mentioned that the entire process was to be automated and would pay for itself. I hope this happens too.
Just keep the cash, or pay down debt IMO..... Reducing debt, or investing the cash in expanded capacity, creates value for shareholders... When debt is zero and they have no plans for significant Capex, that may be the time to buy back shares.
Yes, but be careful since Elon said it was "almost complete". This could mean a year away from showing up in cars. We just don't know.
It would be insane to buy back stock. Pretty bad to retire debt early (unless to refinance at lower rate). Tesla needs all the money they have (and more). - Auto business is capital heavy - the working capital needs are themselves really big. - Euro giga won't be as cheap as GF3 - no cheap loans there (though FCA cash will help). - A macro downturn can happen anytime. - They need money to expand battery production from 35GWh to 2,000 GWh. Infact, it might be a good idea to raise money through capital or debt - when they see signs of a macro downturn.
Tesla is so far from buying shares back. They could invest in targeted grid scale energy projects that could have a five year payback. Not as fast as the payback on a gigafactory, but far better then most stock repurchases.
Companies need cash for many reasons. Say this virus outbreak gets a lot worse, Tesla may have to hunker down with a lot less sales. Cash provides a bridge. An auto recession could hit. A war could erupt in the Congo cutting off Cobalt supply resulting in less cars being manufactured. Or, just within Tesla itself, they could run into more operational challenges, OR they could all of a sudden see a great opportunity that requires a $1B in cash. So, yeah, you don't want to go all Apple and bank $700B, but Tesla is far from that. They could use a bit more cushion for the size of the company.
Because the virus is a joke. Coronavirus is not new and have been infecting people for years. This is just a new strand and has a mortality rate less than influenza. But hey for those who bought loads of N95 masks before the hysteria, you probably just did better than buying TSLA by turning a profit on those on Ebay.
Meh. I can quantify it, easy peasy. It’s 7 private islands with full scale @Unpilot repellant @Lycanthrope built walls (roll with it, Buddy), robotic sentinel run turrets, tigers, lions and border collies, oh, my!, 1/4 mile drag strips, Supercharger Network, Cybertruck, Roadster 2.0, 2 yachts... Yeah, I can quantify it all day long, every day. Booyah!
I agree with you about buybacks but Tesla spent only $1.3B in capex in 2019 while building GF3 and getting Model Y into production. With the drastic reductions in capex per unit production for GF3 and Model Y I don't think Tesla is "capital heavy" like a traditional auto business. Tesla's ability to scale using significantly reduced capital is a big deal that for some reason is overlooked by almost everyone.