2daMoon
Mostly Harmless
Relax Tesla, try taking a few deep breaths.
Once you are feeling calm, will you show me on the chart where Twitter hurt you?
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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Relax Tesla, try taking a few deep breaths.
Once you are feeling calm, will you show me on the chart where Twitter hurt you?
It is also true that the majority of the income from Solar City leases is earned towards the end of the lease.
That is a sub-optimal business model, as to grow the business needs to raise or borrow increasing amounts of capital, and the numbers can look very bad for a long time, But valuing the SC assets should take this into account.
Getting the customer to honour the lease for the duration , warranty and maintenance are obvious issues.
But SC may not have been the total "train wreck" that short sellers claim, however it was an obvious target for short sellers.
Yep and the thing that Mary, Farley, Toyoda et al don't seem to realize (or at least speak about) is that their competition really isn't Tesla, it's their own ICE vehicles. Their BEV's aren't an add on to their existing sales, they're going to osborne or cannabilize their existing fleets, at least for the first few years. And that's really going to hurt their financials as those vehicles are where the bulk of their money from selling vehicles comes from (as opposed to their financing arms). I expect many of the early BEV's will be loss leaders, with prices (and profits) going up later as they're more accepted... case in point the Ford Lightning and Mustang Mach-E, where the prices have recently risen considerably. It will be interesting to see who survives, especially with Toyota joining the BEV game so late. Their subcontractors who make components for the various ICE vehicles will suffer too unless they can adapt to the changing environment.
That's why I truly think Tesla will be able to keep up demand for the foreseeable future as the OEM's are going to consume themselves. Honestly, the thing Tesla has to be concerned about is both the CyberTruck and especially the coming less expensive model eating into sales of the 3 and Y. I think that's why they have been so silent on the cheaper Tesla, as it will be huge and will probably impact sales of the Gen 2 vehicles.
Anyway that's my story and I'm stickin' to it. Time for bed! Have a good night (and day for our friends down under)!
Solarcity was a fine business, it made money, but in the end it was a finance company. Their real business was financing 20 year long infrastructure. Their problem was that they grew way too quickly and didn’t have the massive financial clout to continue borrowing the required capital. Wall Street raiders correctly saw Solarcity as an undercapitalized bank, and thus shorted them to almost death. Solarcity was only able to borrow relatively short term debt while they financed long term projects. Solarcity was beaten down mercilessly by short traders in the bond and stock markets.
This meant that when it came time to roll over their ever growing pile of debt, their corporate borrowing interest rates were so high as to be unaffordable. Solarcity was at that point facing debt default and thus bankruptcy. The Wall Street raiders were about to win.
And then, and then, Elon pulls a rabbit out of the hat and makes Tesla buy Solarcity. Tesla was 10x the size of Solarcity and thus could absorb the debt and roll it over using their much better capitalization and borrowing ability. The Solarcity bonds became Tesla bonds, yet for a short period there between acquisition announcement and the closing of the acquisition, the Solarcity bonds were selling at around $.70. I bought a bunch, wish I had bought more!
So Elon basically rescued all those Solarcity bond holders. People think it was the stock holders he was rescuing, but that stock had been beaten down by the time of acquisition. All he did there was stop the bleeding. But the bond holders were about to get wiped out. He absolutely saved their asses. Around that time, Elon said something to the effect that debt is something that must be paid back, it is almost sacred.
So, yeah, Solarcity ran into real trouble, but Elon wasn’t CEO. And he cleaned up the mess regardless. That’s integrity.
And that is also one of the many reasons why shorts hated him and wanted to do everything they could to kill Tesla. Solarcity stock became Tesla stock. So the shorts got screwed and it became a personal war against Elon at that point. We all know how that finally ended up.
Gigapress
Trying to be less wrong
Comparison of all five Big Tech companies in head-to-head trend charts, showing clearly Tesla's superior operating expenses, growth. Discussion of Tesla's rough timeline to $100B and $200B net income based just on automotive business and implications for market cap and stock price.
globaloptimization.substack.com
I got some help from my brother on making the charts a lot better on previous articles and making them shorter and easier to read. I added new charts too. You may want to read them again because a lot has changed.
Tesla vs. Top Megacaps: Smackdown Round 2
Head-to-Head Trend Chart Face-off and Market Cap Implications
globaloptimization.substack.com
I got some help from my brother on making the charts a lot better on previous articles and making them shorter and easier to read. I added new charts too. You may want to read them again because a lot has changed.
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Buckminster
Well-Known Member
Thread:
Next Tesla CEO/COO
To be fair, unfortunately I suspect that this time she has actually "led".... Will most likely be many others to follow.Mary is petty.
GM temporarily suspends advertising on Twitter following Elon Musk takeover
General Motors is suspending advertising on Twitter following Elon Musk's takeover of the social media platform.www.cnbc.com
CLK350
Member
Solarcity wasn't a failure at all. It had a successful business model, which depended on getting the normal lending rate from bankers that other similar ventures used at the time. The only reason it failed was because of a successful shorts raid on the company by Chanos*.
From our own @jesselivenomore "Elon Musk vs.Short sellers":
" Solarcity was in essence a financial company. They were an arbitrage firm that profited from the difference between their borrow rate and their leasing rate to their customers. Now there was a bunch of noise and opaque accounting about how shareholder value should be calculated, net present value, renewal rates etc. So you can argue that it was worth $30 a share, or $20, or $10. But as far as keeping its doors open, as long as it could continue to borrow, and at a lower rate than it leased(and all the costs associated), their business can be profitable and continue to run. And in theory, their borrow rate should be determined by their ability to service this debt. In reality, it was determined by the market's confidence in their ability to service this debt. Which is exactly where Chanos, like with Fairfax, began his attack. .."
...< snip>
" So how would Solarcity have looked today without these short sellers? Well we know that the two other installers, Vivint and Sunrun are alive and well. In fact, Sunrun, has a very similar business model to Solarcity, with the same opaque accounting regarding NPV and renewal rates. It did not even pivot to loans from leases like the others did to conserve cash. Sunrun is currently trading at an all time high."
(*) Chanos is famous for having predicted and made money on Enron's but lost his way and his fortunes after that shorting for the wrong reasons or as a manipulating technique.
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If a half-price model, call it a 2, does come out - I will buy one in addition to my Model Y. And a LOT of other people will as well. It won't impact 3/Y sales at all.
Really nice comparisons. I think it would be even more clear what is happening if the graphs were log scale(except for the percent ones). It will be very clear that Tesla is on a path to overtake them when you extrapolate the current growth a few years into the future...Comparison of all five Big Tech companies in head-to-head trend charts, showing clearly Tesla's superior operating expenses, growth. Discussion of Tesla's rough timeline to $100B and $200B net income based just on automotive business and implications for market cap and stock price.
Tesla vs. Top Megacaps: Smackdown Round 2
Head-to-Head Trend Chart Face-off and Market Cap Implications
I got some help from my brother on making the charts a lot better on previous articles and making them shorter and easier to read. I added new charts too. You may want to read them again because a lot has changed.
Now let’s see if the TWTR acquisition turns out to be the acquisition TSLA investors didn’t know they wanted and let’s find out in 2023-24 if all TSLA bulls who got margin called in 2022 turns out to be social medial bulls.
Paracelsus
Active Member
Thanks for the heads up that Tony's new video was out @Artful Dodger - I have been impatiently waiting for the next one for too long. And as expected, it is filled with insight and guidance.........but not for "the incumbants" as Tony points out, because they won't see the opportunity in disruption, but for "the entrepreneurs because they will."
But for me, Tony's mic-drop moment of 'you should have listened to my first predictions' was one that is very well understood on TMC................."Cost curves are like gravity. I don't care what your opinion is. Cost curves are like gravity." (pointing out the evolving cost of battery production, and how he literally nailed the cost curve for that cost in his earliest predictions)
Make no mistake about the importance of this curve, and of this metric. Many of us that worked in-and-around the energy sector became TSLA investors early-on not only because of the vehicle, but primarily because of the obvious need and benefits of battery storage to the grid (and of course a very strong desire to see the entire paradigm of grid management shift for the betterment of the Planet). It's been a long decade of waiting for gravity to drive that cost curve to the point of disruption and the subsequent implosion of the incumbents, but we have finally arrived!
IMO it is only borderline-unethical protectionism by DC and the EU of the current grid monopolies that is now holding back this inevitable tsunami of hurt, such as the rewriting of all things good in the Green New Deal to benefit the current grid operators and the financers of this renewable transition (you know - the incumbents - the ones that Tony points out failed to see this coming and failed to act accordingly), while the entrepreneurs of this transition (the one's whose companies cannot be named by the tools of the establishment in DC) are forced to play 3D chess to survive. Fortunately for all of us and for the planet, there are people like Tony Seba that have helped investors see the next moves on the chess board long ago so that retail investors could actually help participate and help influence this change. And there are people like Elon, who can play a game of chess against everyone in DC and the EU and in China while managing other massive disruption companies, and while being an influencer on many platforms, and while still having time to be on SNL laughing about it.
When you look through a long-enough lens that looks past all the fear-mongering that hopes to control us all and keep us in check, these are really exciting times. And the utter disarray that is DC at the moment - that steaming pile of 'hey, look over there' Machiavellian politics that begs us to focus more on pronouns than on the World's energy grid and transportation and the financing of that transition and who will own it all and profit the most from it............perhaps we should look a bit more positively on that hot mess, because what perhaps what it truly represents is that we are all winning....we the people that is.......and the Planet IS winning, despite their best efforts. And this is all happening because Elon & TSLA, and the retail investors that have helped support their mission, and tremendously insightful people like Tony Seba, have all moved faster and are more aware than "the incumbents" had ever hoped................
Artful Dodger
"Neko no me"
Indeed, Tony Seba made the prediction in 2014 that batteries would be $125/KWh by 2022. I'd say he nailed that.
When I'm out driving every non-EV I see I assume will be an EV in about 5 years. And many of those will be Teslas because the other manufacturers are 10-15 years behind in manufacturing f EVs. The oil companies seem to have grasped this which is why they are gouging for everything they can for huge profits now because in 5-10 years there won't be nearly the market their carbon pollution.
I wonder if at the turn of the 20th Century people were looking at cars and thinking "where are they going to get the gasoline or batteries from to ever have more than a niche market?" (though I doubt they use the term "niche") and that the horse and buggy will still be the main source of transport for the entire century and beyond.
Favguy
Member
It will be interesting to see how it plays out. Speaking with many former S owners here in the UK, they couldn't wait to jump into the 3 when it got here as the S really doesn't fit well on many UK and European roads (I love mine, I'm considered a big car loving weirdo over here!, but it is a pain on some narrow roads and there are places I avoid going altogether because of the size)
The 3 owners, then couldn't wait to jump to the Y to get in a hatchback again, as we pretty much hate cars with trunks.
As and when a smaller, lower cost, hatchback tesla arrives, you can guarantee it will very significantly Osborne sales of the 3&Y. Most average drivers here and in Europe want smaller hatchback cars. The 3&Y are still considered to be large cars here.
Oh, and if the Y beating the Golf's numbers impresses you now, just wait and see how a Golf sized hatchback Tesla in the right price bracket will do, it'll outsell absolutely everything! German legacy Auto. must be absolutely terrified behind the scenes.
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ZachF
Active Member
Adjusting for inflation is also important nowadays. I would suggest to all of you digging through the numbers to do so. We’ve been a bit spoiled with inflation low enough from 2010-2020 to mostly ignore, but that’s not the case now.
Normally, 8% growth would be pretty good, but today it isn’t. Adjust for inflation and you can really see how much the rest of the mega cap tech companies have stalled out.
Is it a joke, or is it an aid to company pivot/ economic protection?
Without a government deadline, companies/ stock holders/ leadership can live in their bubble where ICE have a long runway... right until the bottom falls out of their market. At which point it's too late to go EV and the company folds (or goes though a dark period).
Now, there is a clear wall/ cliff/ point where the old model will not work any more. This allows those who were shouted down or ignored the inherited clout to get the changes moving which may save the business.
At an absolute minimum, it sets an earlier deadline for suppliers to transition from investing in new ICE powertrain development.
Ditto for fuel vs electric charging infrastructure...
I have a three and a y but if a half price model does come out soon I'll buy two of them and put them on turo...
I see the issue with Solar City differently. The problem was its business model. I actually thought it was a great idea and I bought shares in SCTY and I bought solar bonds. The business model: Allow people to get solar with no up-front cost. Thus people with insufficient capital could have solar, improve the environment, and get lower electricity rates. Seemed like a win-win.
The problem was that once Solar City installed solar on your roof you no longer owned your entire home: Solar City owned the panels on your roof. This complicated the sale of your home because a potential buyer had to accept the terms of the solar lease. When I was house-hunting, I noticed that "Fully-Owned Solar" was a big advantage in home listings. And for myself, even though I owned solar bonds, I did not want to buy a home where a third party owned the solar. I ended up buying a house without solar and having it installed myself, and I'm glad I did.
Solar City's business model was a great idea that failed because home owners and home buyers didn't want the encumbrance of a third party owning a piece of their home. Tesla took over the debt and is paying the interest on the bonds, but they're not offering any more solar bond issues. I wanted to buy some more solar bonds. My bonds pay 5% annually for ten years (paid semi-annually) and for me that's a good return. But they won't sell me any more. (Yes, there are Tesla bonds, but AFAIK, no solar bonds.)
This is impossibly optimistic. People keep their cars for a decade or more. Today's cars probably have a good fifteen years of service in them. It would be very optimistic to think that the major car makers would stop making gas cars in five years. I'd guess at least ten years. Then those cars will be on the road for another fifteen years. So the very most optimistic reasonable guess would be twenty years for all cars on American roads to be electric. Twenty five years would be my most hopeful guess. Add another five or ten years in poor countries where people will drive cars until they fall apart.
The caveat: If we actually run out of oil. But if that happens before we've transitioned to sustainable energy then the entire economy will collapse. And with half of American politicians being climate-change deniers, and many of the other half unwilling to take the extreme measures necessary, the transition to sustainable energy is proceeding at a snail's pace.
On about 350,000 car deliveries for Q3 we get $3.3 billion net profit.
On 3.5 million yearly car deliveries we may get $33 billion net profit, if we assume a linear relationship,
though frankly net profits should rise exponentially given the operating leverage Tesla has shown.
With this type of growth the minimum p/e we should expect is 40.
These are conservative numbers purposely to indicate how undervalued Tesla is now.
Once the software component FSD kicks in, there is no upper limit.
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