lorenfb
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Re: TSLA corporate outlook

Thu Nov 02, 2017 9:13 am

LTLFTcomposite wrote:
cwerdna wrote:Can't see why a company would want to blow over $50 billion in cash or stock or borrowed $ to buy a currently overvalued company that's blowing thru cash like crazy and racking up major losses to boot (somewhere past $3.8 billion in cumulative net loss).

They wouldn't. But at $20 a share I can easily see them being a buyer. What the actual number is who know, but my guess would be something that would have current shareholders in tears.
cwerdna wrote:It's probably less risky for a company to start their own EV program for several billion $, which would still be WAY cheaper than buying TSLA.

Wasn't that project Titan? How did that work out? As much fun as it is to bash the likes of GM, Ford, Nissan or whatever, building all that from the ground up is a daunting task when you consider design, engineering, marketing, compliance, manufacturing, distribution, a nationwide if not worldwide network of sales and service locations (even if you do hate dealers, you need something), and a bunch of other things I'm sure.


Why even buy it at $20? Just wait a little longer for the assets' 'fire sale' when Chapter 7 bankruptcy occurs, e.g. then buy cheaply
the basically unused M3 assembly robots.

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abasile
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Re: TSLA corporate outlook

Thu Nov 02, 2017 9:44 am

lorenfb wrote:Who would really want to buy Tesla, anyway? Basically, all of its technology is widely available and "off-the-shelf". The only real eco-system that's somewhat of value is the SC system, and that's not all that significant. There's no real barrier to entry to producing a BEV that buying Tesla would alleviate.

You're kidding, right? Having access to technology and intellectual property is great, and it was good PR for Musk to express willingness to share Tesla's patents, but it's another thing entirely to build a company, factories, supply chains, and actual products. The Model S came out over five years ago. We own a five year old Model S, and even at this age, it's still superior to any other non-Tesla EV.

lorenfb wrote:Most importantly why would any company, Apple as an example, want to enter the automotive market where margins are low, e.g. compared to Apple's existing high gross margin product lines? Tesla's gross margins are now decreasing as exemplified in its Q3 report, and will continue to decrease.

Tesla indicates that they expect margins to improve with volume sales of the Model 3. We'll see. I'm cautiously optimistic. During this morning's drop below $300/share, I chose to buy some additional shares. I'm cautious in the sense that I won't invest more in TSLA than I'd be comfortable losing, and my time horizon on TSLA is long.

Tesla is a premium brand that has grown quite valuable and is now also associated with high-end solar products and energy storage, with the potential to expand into additional markets. Premium brands are often able to justify higher prices and higher margins. Apple is a case in point. Despite having a global smartphone market share below 15% in 2016, Apple took in an overwhelming majority of the profits earned by smartphone manufacturers. For the other manufacturers, smartphones are not a high margin product. In buying TSLA shares, I'm not just buying a car company, I'm buying a brand.

lorenfb wrote:Why even buy it at $20? Just wait a little longer for the assets' 'fire sale' when Chapter 7 bankruptcy occurs, e.g. then buy cheaply the basically unused M3 assembly robots.

Now that's crazy talk! If you're that confident in Tesla's demise, you should be shorting the stock. Of course, no one can be that confident.
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sparky
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Re: TSLA corporate outlook

Thu Nov 02, 2017 11:42 am

C'mon folks. Yes, Model 3 success is crucial to Tesla success.
This ER did not depict an existential threat to Tesla. It hurts their competitiveness as it gives other manufacturers time to compete.
It costs them a bunch of $ to have non-productive workers. It will take them longer now to get to positive GM on Model 3. Supercharger roll-out and Service Centers will be delayed to save $.
Manufacturing is a bitch. The Model 3 is a huge step change and Musk over-promised.

I listened to the conference call and questions from analysts.
I disliked Musk's initial harping about naysayers when Tesla had sold only 2500 cars and now has sold 250000. Quit whining. Wipe the egg off your face and work the problem.
However, I do appreciate the detail that Musk and JB go into about where the problems are and what progress has been made.
They are not aloof to investor concerns and have clarity on the problems it seems.
It sounds like the there's a 3 month slip although oddly, my own M3 delivery window only slipped one month to Nov-Jan.

Some online reports of talk with Tesla workers say the bottleneck has been resolved and it will turn out to be only a 1-month slip. I take those with the same grain of salt as online reports of GF power interruptions. Show me the VINs.

The SP is not going to $200 much less $20.
They're selling 100k S&X /year which is their so-called "sweet spot". Tesla Energy has excellent margins and seems to be a very timely product.

I have buy orders in at $290 & $282. I'll buy more when employees I know who have already configured cars get their VINs.
Seems like an opportunity as every one of these TSLA meltdowns has been for me so far.

lorenfb
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Re: TSLA corporate outlook

Thu Nov 02, 2017 11:16 pm

abasile wrote: Having access to technology and intellectual property is great, and it was good PR for Musk to express willingness to share Tesla's patents, but it's another thing entirely to build a company, factories, supply chains, and actual products.


The reality is that most in the automotive industry don't consider Tesla's "technology and intellectual property" all that significant.

abasile wrote:Tesla indicates that they expect margins to improve with volume sales of the Model 3.


Wishful thinking, and not at $35K!

abasile wrote:Tesla is a premium brand that has grown quite valuable and is now also associated with high-end solar products and energy storage, with the potential to expand into additional markets.


Neither of those provide the volume cash flow Tesla needs in the short term..

hyperionmark
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Re: TSLA corporate outlook

Fri Nov 03, 2017 8:28 am

Trying to think of companies that have a similar brand love/loyalty/following to that of Tesla. Apple would have to be one. Maybe Disney? What about other luxury brands out there? Hard to think of too many that are as crazy for a company/brand as that of Tesla.

lorenfb
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Re: TSLA corporate outlook

Fri Nov 03, 2017 9:44 am

hyperionmark wrote:Trying to think of companies that have a similar brand love/loyalty/following to that of Tesla. Apple would have to be one. Maybe Disney? What about other luxury brands out there? Hard to think of too many that are as crazy for a company/brand as that of Tesla.


That loyalty for Tesla hasn't 'transferred' to the bottom line of Tesla's P&L statement as is the case for Apple, Netflix, Amazon, Facebook, and et al.

hyperionmark
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Re: TSLA corporate outlook

Fri Nov 03, 2017 10:02 am

lorenfb wrote:
hyperionmark wrote:Trying to think of companies that have a similar brand love/loyalty/following to that of Tesla. Apple would have to be one. Maybe Disney? What about other luxury brands out there? Hard to think of too many that are as crazy for a company/brand as that of Tesla.


That loyalty for Tesla hasn't 'transferred' to the bottom line of Tesla's P&L statement as is the case for Apple, Netflix, Amazon, Facebook, and et al.

It took Amazon over 15 years to be regularly profitable. And their business isn't near as capital intensive as Tesla. Was Apple near as profitable only a decade into their existence as they are now?

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LTLFTcomposite
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Re: TSLA corporate outlook

Fri Nov 03, 2017 10:26 am

hyperionmark wrote:It took Amazon over 15 years to be regularly profitable. And their business isn't near as capital intensive as Tesla. Was Apple near as profitable only a decade into their existence as they are now?

Actually Amazon is extremely capital intensive (trucks and airplanes) but they outsourced that part. I've wondered if Tesla would have done well to do the same, outsource the manufacturing.

I could say I see a significant potential for similarities with Amazon's history, but I'd be repeating myself. Suffice to say my strategy is to be a buyer of the stock in single digits, and sell at $2000+ 15 years later.
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hyperionmark
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Re: TSLA corporate outlook

Fri Nov 03, 2017 10:31 am

LTLFTcomposite wrote:
hyperionmark wrote:It took Amazon over 15 years to be regularly profitable. And their business isn't near as capital intensive as Tesla. Was Apple near as profitable only a decade into their existence as they are now?

Actually Amazon is extremely capital intensive (trucks and airplanes) but they outsourced that part. I've wondered if Tesla would have done well to do the same, outsource the manufacturing.

I could say I see a significant potential for similarities with Amazon's history, but I'd be repeating myself. Suffice to say my strategy is to be a buyer of the stock in single digits, and sell at $2000+ 15 years later.

True, I've wondered the same if they should be outsourcing more. Although by not doing so they stand to profit even more if/when they get it right.

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Nubo
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Re: TSLA corporate outlook

Fri Nov 03, 2017 10:56 am

lorenfb wrote:The reality is that most in the automotive industry don't consider Tesla's "technology and intellectual property" all that significant.


The batteries are key. If Tesla gets the gigafactory (and future gigafactories) up to volume production, "most in the automotive industry" won't be able to touch Tesla's battery prices. In fact they'll be buying from Tesla. And as far as a practical charging network, so far Tesla stands absolutely alone in the US market. And future charging stations at even higher power levels are going to require significant on-site storage capacity. Batteries again, even if some other manufacturers ever see the light regarding infrastructure, or 3rd party charging becomes profitable they'll be buying components from Tesla.
I noticed you're still working with polymers.

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