He is Steve Jobs v 2.0. But maybe he’s smart enough to know you can’t cure cancer with juice if he gets sick.
Wall Street Journal article on Tesla requesting ”…a discount on contracted spending amounts retroactively.”. The article doesn’t mention any specific vendors, and says, “Some suppliers contacted about the request said they were unaware of such a demand,” but getting money back out of a supplier is essentially an exercise in Crocodilia dentistry, even with a legitimate claim that suppliers have not met supply agreements. If this is actually part of the fiscal planning for the success of Tesla rather than some kind of negotiating position it does not bode well for the future.
Stranger
Tesla produces beautiful cars – the Model S particularly – and I hope they’re successful even though it’s becoming more and more apparent that Elon Musk personally is a total asshole. The world needs this type of product but Tesla may not be the means to deliver it. The above is a classic harbinger of failure. The next stage is generally that suppliers start tightening their credit terms if they’re willing to deal with you at all. No one wants to be so closely attached to a pending failure that they get flushed down the drain with it.
Perhaps the end result will be that Tesla’s stock price drops drastically to a point that allows the company to be taken over by GM, Toyota or one of the other existing car companies, who have the experience necessary to produce cars in volume. Currently the market cap is about $51 billion, or only a little less than that of GM so it’s not happening now.
As someone who would really like to buy a Model 3 next year, I really wish the company would be taken over by someone who knew how to build cars.
I doubt GM or anyone else is interested in buying Tesla at anywhere near the current valuation; it is currently a very small producer of pretty expensive cars, and I’m less and less convinced that it will ever sell a $35k Model 3 at a breakeven point. All of the major carmakers are already working on their own lines of battery electric vehicles (BEV) and some are working on fuel cell and advanced hybrids, and there isn’t anything about the Tesla vehicles that is some kind of unpatentable or secret technology unavailable to other automakers. If anyone buys Tesla it would be to gain control over the Gigafactory as access to batteries is one of the major bottlenecks for high production implementation of BEVs.
If Tesla had been smart it would have entered into a joint venture with one of the major automakers to use their existing automation capabilities, established supply chain, and capital resources to get the Model 3 first to market without all of the production issues that Tesla has experienced. The “vertical integration” of SpaceX made sense insofar as many of their major components are low volume, build-to-print with constantly changing specifications and materials that would be a nightmare to source externally and control quality. For high volume production of a consumer vehicle, it makes a lot less sense than pushing the quality requirements to suppliers and letting them compete with each other to get the minimum pricing, and to leverage from existing automation methods and facilities rather than insist on building production from soup to nuts and establishing totally new supplier networks at a volume that makes them a second tier customer at best.
Stranger
Isn’t that exactly what I said?
Yes. I wasn’t contradicting you, but expanding on that notion with the point that a major car manufacturer won’t be buying Tesla for its production capability or intellectual property like their Autopilot system, but most likely for ownership of the Gigafactor or other proprietary elements which can be integrated into its own product lines. The Tesla vehicles are designed specifically to appeal to a certain type of customer, and largely driven by the ego-centric cult of personality of Elon Musk. Even if the Model 3 is a good quality vehicle it is unclear that it can be used as the basis for a more commodity-grade vehicle with broad appeal at a viable price point. In any case, as autonomously piloted vehicles get closer to reality I expect the ownership model of automobiles to change radically, and appealing to customers based upon driving performance and near-lux caché is probably not the route to future success in the automotive industry.
Stranger
Today, Elon Musk tweeted that he’s thinking about taking Tesla private. The statement he released said,
"Earlier today, I announced that I’m considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward.
First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company."
What I want to know is whether the $420 share price was a coincidence, or if he’s trying to tell us something about what he’s been smoking. (FYI, that amounts to a 23% premium over the price at which the company was trading.)
If I’m doing the math correctly, this would value Tesla at about $71 billion. Slightly less than Volkswagen but more than GM by $17 billion. It’s a ridiculous over-valuation.
Doesn’t that mean they need to come up with $71 billion in cash to buy back all their stock?
He claims to have the funding in place.
So what would think Waymo (the autonomous vehicle division of Google/Alphabet) would be worth? Latest post I see is $175 billion–and this is a company which hasn’t sold any cars yet:
https://www.barrons.com/articles/alphabet-how-a-175-billion-waymo-could-boost-the-shares-1533651636
That’s also a crazy over-valuation. Or perhaps the valuations of both companies are reasonable and I’m an idiot.
Elon Musk is behaving more and more like…Elon Trump.
Midnight tweet rage.
Unhinged in his interviews.
And now this allegation from a second whistle blower:
Elon Musk’s tweets about the buyout of Tesla have attracted the attention of the SEC.
But there may be something to the buyout story. Goldman Sachs was hired to advise the company on something. Perhaps the buyout? Perhaps removing an unhinged CEO?
Just doing my part to ensure this piece of shit continues to burn in the Pit.
Sent from my SM-G920W8 using Tapatalk
calling the diver a child rapist now
https://www.cnbc.com/2018/09/05/tesla-ceo-elon-musk-calls-british-cave-diver-child-rapist.html
I really think Musk has a mental illness. If the board has any sense they would get rid of him as CEO
I keep expecting him to go full Pizzagate at this point. >.<