From a quick look at their balance sheet, in the past year their total assets have increased from $12 billion to $28 billion, and debt from $2 billion to $9 billion, for an increase in net assets of $9 billion. Cash flow is fine too; total cash is up almost half a billion over the past year, for a total of $3.5B.
Looking at their cash flow statement, they are spending a lot but mostly on capital expenditures.
I don't see any reason to even think about bankruptcy. They're doing fine.
What? Did you actually look at their cash flows? They are massively free cash flow negative, and it's only getting more negative every quarter. The only reason cash is up is because they regularly tap the capital markets with debt and equity, which is why Elon is constantly looking for new ways to boost the stock.
The only way Tesla avoids bankruptcy is if the markets keep believing in the Elon magic, because the operations are definitely not financing the investment required.
This is the key thing people miss when people falsely compare Tesla to Amazon. Amazon has always been free cash flow positive. They may never have turned a GAAP profit for many years, but they weren't issuing stock to finance their growth.
Right now, their pp&e and working capital seem like they could be liquidated to pay back debt, so agree that bankruptcy doesn't seem to be a near term concern.
However I don't know what covenants are in those loan documents, and its possible that given the delays tesla could trip a covenant and get in trouble with lenders. Though I'm sure Elon has worked his magic on them as well
Hard to say if they're doing fine at this point, as the model 3 doesn't really show up in the financials yet. The real concern is that model 3 production capacity increases without sufficiently decreasing production efficiency. So revenue goes up but COGS skyrockets, and the business is structurally not profitable on even a gross profit basis. This would lead to huge financing needs, and also probably a drop in the stock price (though the stock price seems immune to dropping). This could lead to company failure and is not a theoretical risk
It’s funny to see everyone praise Amazon’s strategy of “invest everything you possibly can regardless of what the income statement looks like in the short-term. Tesla does the same thing and all anyone can say is “look at the income statement!”
Granted there are some differences, but the strategy is the same.
Those financial statements are not in the article and that's a shame. I would expect journalists writing about the potential bankruptcy of a company to give more numbers and less "maybe"s (word used 5 times in the article).
If you think they're fine, maybe look at cash flows a little closer.
Cash flow is up half a billion because they just issued 1.8 billion in junk bonds (which are already trading in minus territory btw). Meanwhile operating cash flows are increasingly negative to the tune of hundreds of millions per quarter.
Sure, they're fine if they continue to raise billions. But they're nowhere near profitable, and they're also going to continue to lose billions. What's going to happen if they receive a credit downgrade or institutional investors decide to stop playing along?
just because they earn money ,doesnt mean it's their main goal. a lot of IT companies who are HUGE didnt even have a model to earn money. they just got a lot of it because they made something that was wanted by a lot of people.
Agreed. This is a R&D heavy venture, hence the capital expenditure is high too. How can one fail to capture the fact that their intellectual-property portfolio is a store of their value, as are the factories and the market lead they have not just in self-driving EVs but in batteries & solar tech. This is one of the dumbest articles I have read in a long while. Money spent on NOT money up in smoke. Somebody give this guy a crash course in corporate finance.
I've made money in the past buying out of the money call options on TSLA, I'm guessing all those short sellers buying butterflies.
That said, the point that sticks out at me in the article is this one -- "... because money is how we measure success. And this is in fact true of most companies. But it is not true of Tesla. 'When a measure becomes a target, it ceases to be a good measure,' and this is as true of money as it is of any other measure. The purpose of Tesla is not to make money;"
There is a tremendous amount of visibility put on the company, and Elon is up front about what they are trying to achieve. The arguments against them succeeding boil down to either 'we don't believe you can do what you say you can do.' or 'we don't understand why you are doing what you're doing, so it must be wrong.'
It used to really bug me when someone told me that what I was proposing was impossible. I work to do the necessary research and foundation work to understand the risks and challenges of a course of action and someone says "Well, I've never heard of anyone who could do that so you clearly are missing something." No discussion of the idea, no attempt to understand how I came to believe what I did.
One of the things I admire in Elon is that he seems really good at just completely ignoring that noise. It is something I have tried to cultivate as it is helpful in starting new businesses or projects to be able to not get bogged down by people who want to tell you why you are wrong and are unwilling to listen to how you think you may be right.
> Maybe; maybe not. Either way, a far more interesting question, if (like me) you have no financial interest in the business’s success or failure, is: does it matter?
If you're an American, it does matter in the sense that the subsidies that allow Tesla to keep moonshotting with relative comfort are paid through your tax dollars [0]. Tax dollars that could either go back to your pocket, or otherwise indirectly benefit you by subsidizing a more effective venture. Hell, some of those tax dollars could even be used to help the original moonshot institution.
I think what Tesla and Musk are doing is very cool. But let's face it, lots of companies and individuals could promise cool things if they had a multi-billion cushion. I think the OP makes some decent points about how silly it is to care about immediate or substantial profit margins -- hell, any investor in Amazon would agree with that.
But it seems dangerously naive to just think this:
> But it is not true of Tesla. “When a measure becomes a target, it ceases to be a good measure,” and this is as true of money as it is of any other measure. The purpose of Tesla is not to make money; it is to pioneer fleets of smart mass-market electric cars, and the infrastructure to support them, and battery technology which is not limited to cars. Making money is ancillary.
That is the claimed purpose of Tesla. The author is confusing Tesla's self-interested claims with reality -- this is basically Kool-Aid-drinking-cultism. And giving Tesla and Musk the complete benefit of the doubt in terms of altruism, that doesn't mean that their positive dreaming has an infinite buffer against shitty implementation and business practices. Profit is definitely not everything, but it's a potentially very useful signal (among others) to weed out non-performance and incompetence.
Tesla's primary method of financing is through debt and equity, not through any government subsidy.
Yes they get ZEV credits, but the revenue from those pales in comparison to their sales, loans, and stock offerings.
Not to mention that most of the traditional car manufacturers in America received huge government bailouts to stay afloat in 2008, so even if you slight Tesla for receiving a loan (which they repaid early with interest) they are still on equal footing with other manufacturers.
>After all, even if Tesla stock goes to zero, and its bonds default to pennies-on-the-dollar, its factories and software repositories and human capital will all be there, and no Chapter 11 court or committee will be blind to the fact that they’re worth far more as a coherent unit than they would be as separate assets.
Well, to me that statement seems to be at least dubious. If the company is loosing money and goes bankrupt it is obviously not worth something in its entirety - at least in its current form. (And I highly doubt that simply restructuring Tesla would do something about that.)
This does however not neglect the premise of the article. Even if Tesla would no longer exist in any form, there has been some creation of value for society as a whole.
> Well, to me that statement seems to be at least dubious. If the company is loosing money and goes bankrupt it is obviously not worth something in its entirety - at least in its current form. (And I highly doubt that simply restructuring Tesla would do something about that.)
Bankruptcy means the company has more debt obligations than assets, and has ran out of cash. It does not mean the company assets are worth nothing.
In a theoretical Chapter 11, Tesla Energy and the "battery factory" would still be worth many billions, even if they never sold another car.
Tesla is doing pretty good for a highly capital intensive and growing company.
Tesla going bankrupt wouldn’t be an isolated event. It would probably be something like the aol-time Warner merger or the Lehman Brothers bankruptcy and trigger a general market correction.
regarding human capital, when a company goes bankrupt many employees lose their jobs.
the current stock price takes into account all those variables. When a bankrupt stock goes to near zero, that takes into account totality of all the intellectual property, factories, etc.
Tesla looks like Elon's attempt at running a high-stakes Amazon-for-batteries type business where they invest all they get into the business and get massive adoption in the long run. Except for a much much more capital intensive industry, and where so far more than a couple of things have gone wrong.
At the moment they're in a very tough spot where they've issued bonds, folded Solar City into Tesla in a weird attempt at bad accounting and pretended like (already 3) new product lines were ready to take in pre-order money. Meanwhile they're using excess battery production capacity not being used for cars (which are stuck in slow production lines) for a quick (small) buck in Australia and Puerto Rico.
I think we're going to see either a secondary offer or new bonds being issued soon.
I mean this as nicely as possible: armchair speculation like this doesn't make sense to me. You're insinuating you'd be a better decision maker than an entire team of lawyers, executives, and accountants at a fairly prestigious place to work. Describing things as "bad accounting" or suggesting they're trying to make a "quick buck" just makes it seem like you lack the awareness to realize that you probably don't have all the information and haven't spent the same amount of time and effort in decision making as the executives at Tesla. You're not some lost genius in a world full of idiots. People are generally rationale actors, and the people working at Tesla seem pretty smart to me.
We should not forget, that bad press about tesla is in the interest of Jim Chanos, who is a billionaire and has a big short against tesla. If Tesla stock falls, he wins. Since he holds this short position, he is in the press once a month.
I don't think Tesla or Elon have ever said their goal was to make money. Their mission statement has always been "To accelerate the adoption of sustainable transportation."
"Whenever you have an unpriced externality you can't quite rely on the market to do the right thing. So in order to have electric vehicles come sooner than they otherwise would... electric vehicles were always going to be the long-term transportation mechanism, but to make that day come sooner, you have to bridge the gap with innovation. That was the goal with Tesla is to try to serve as a catalyst to accelerate the day, the day of electric vehicles. And I think when all is said and done, I am hopeful that historians will look back on Tesla and say that Tesla advanced that by at least 10 years, which that would be a huge victory of mine... in my mind."
It's the same with SpaceX, even though its been profitable I don't think they have ever celebrated that. They keep aiming to burn money towards getting to Mars which itself is another money pit.
I think Elon is genuine, he's actions do follow his words. He doesn't care about money, he cares about advancing humanity for the thrills and exploration.
>Jim Chanos summarized all of the reasons why nicely: “If you wouldn’t be short a multi-billion-dollar loss-making enterprise in a cyclical business, with a leveraged balance sheet, questionable accounting, every executive leaving, run by a CEO with a questionable relationship with the truth, what would you be short? It sort of ticks all the boxes.”
A major box it doesn't tick from a short sellers perspective is the "make something people want" thing. Loads of people want it's cars and would be trucks. The main question is can they deliver them but I'd be wary being short in case they can.
One substantial possible factor in Tesla's bankruptcy is competition. You suddenly now deal with car manufacturers which are woken up to the electric drive age.
Thought exercise: how can competition take serious levels while Tesla produces half or more of the world's battery capacity?
> You suddenly now deal with car manufacturers which are woken up to the electric drive age.
This keeps getting repeated, but all I see are some meagre efforts which seem primarily focussed on headlines rather than actually delivering mass-scale EVs. Concepts. Demonstrators. The closest any of them have come is the Bolt (which is limited in availability, and their dealer networks regularly push people away from buying), and the Leaf (which until the most recent model still looked far too much like a golf buggy and had very limited range).
These are large companies with massive departments used to pushing out new vehicle models every year and updating production lines to suit.
I'm still yet to hear of any of the major manufacturers sign contracts for large scale battery deliveries to support any mass EV production.
I don't understand why their outlook is always 2019-2020-2025-2030 for their full EV range unless they're just hoping for Tesla to fail and finally be able to point out and say "See, EV doesn't work!" so they can go back to what they've been doing for a long while.
I'm a pragmatist - Tesla has had years to prove it could eke out a profit. Everytime it hasn't met this expectation, Elon Musk has managed to change the conversation to something forward looking, pie in the sky BS. And surprisingly, investors bet on short term stock inflation based on these fables, probably fully knowing they aren't achieveable.
At this point they're betting on stock movements triggered by Musk, not company fundamentals. It's Vegas glorified
Not a fan of giving sci-fi idealism a blank check. Moonshot is ok, that's how we got ICBMs and spy satellites, arguably necessary to keep a check on our enemies, though that is arguable these days. Roads and the Internet made even more sense. But, funding a for profit company with billions of tax money for sci-fi promises with unproven premises seems much more questionable.
The company's finances may be shaky, but electric cars aren't a "sci-fi promise with (an) unproven premise". The original Tesla Roadster came out in 2009 (or so), so there are 8-year old electric cars by Tesla driving around out there.
Anybody listened to one recent conf call with Musk ? it was on youtube.
He seems to be in some good sht (subpar assembly line for the batteries and/or engine having to be reassembled from scratch which is done according to him) so so far this particular problem is not out of control for Tesla, but then time is critical too, competition is ramping up, and laws are shifting (EV tax cut is gone now I believe).
I like Musk approach of going legacy free to stretch the limits of the current model, as he did for SpaceX. I'd be sad if Tesla choked enough to crash. If he just made it to the model 3 production that would be "cool".
I don't know how people in the know understand the recent Semi/Roadster unveiling, is it distraction to get some buzz or a final scheme to finance the model3 step with easier things to be done in 2020 (smaller market for Semi and I believe a litle less complex to build than a cramped 4 seater)
A mission (or outcome) driven company can only continue its mission if it can be financially viable.
A non financially viable incarnation of a mission driven business will not be able to further its cause compared to its longer lived version. At some point a reckoning will come and take away the path to your objective.
What if, Tesla is simply a Silicon Valley startup, and the endgame is to get one of the Big Three to acquire them so they don't have to worry about their day-to-day finances?
> Either way, a far more interesting question, if (like me) you have no financial interest in the business’s success or failure, is: does it matter?
I guess the author has glanced over the billions of subsidies that come from taxpayers? [0] So ya, I think American taxpayers should care about Tesla's bankruptcy.
PS - The author of this article is the CTO of a company who's customer is, yup, you guessed it, Tesla. [1]
I call bullshit on [0]. The government is buying goods and services from SpaceX. That's not subsidizing -- that's being a customer. It's particularly not subsidizing when the alternative suppliers of said goods and services are 3-7 times the price.
I think you misunderstood your source [1]. He appears to be the CTO of a company that made a third-party app for Tesla owners, called TezLab. It does not appear to be affiliated with Tesla, and appears to have even rebranded at some point from "Teslab" to "TezLab". The closest relationship appears to be that the CTO owns a Tesla.
> HFC co-founders Ben Schippers and Will Schenk are both Tesla owners and wanted to levelup their driving experience, pushing the limits of the data being collected to help solve typical ownership problems that Tesla itself had not yet addressed and add a bit of fun.
Check out the book Doing Capitalism In The Innovation Economy for a defense of the government encouraging exactly this sort of thing. I reviewed it on Amazon here: https://www.amazon.com/review/R2SCHS5SXNDF30.
Point being, we want exactly this sort of thing, but it's foolish to expect the market to make this sort of investment very often.
People are blinded by so called conventional wisdom which is what business people built when working with conventional businesses to make it easier for them to understand what is going on, in most cases.
Tesla is not a conventional business. It is more of an edge case where you have to put your thinking hat to make sense of it.
> People are blinded by so called conventional wisdom
This seems to be the exact kind of thinking that led to the dotcom bust.
I've commented before on the whole Tesla valuation thing, and people try to think of it like a tech company, and want to value it like a tech company. Tesla needs to actually produce things in a factory, deal with regulations and supply chain, which are very conventional business problems, and where the trouble is.
A counter argument is that tesla is a conventional business that is packaged by Elon musks masterful salesmanship as a one of a kind company where normal rules don't apply. At my old company Martin shkreli pitched to us a few times, and Elon uses some similar reality distortion tricks to excite investors.
For tesla, that is necessary, because no rational investor would invest in an electric car startup. But if you can get investors excited enough about some vague but very promising future, they will overlook short term failures and be guided less by fact than belief
[+] [-] DennisP|8 years ago|reply
Looking at their cash flow statement, they are spending a lot but mostly on capital expenditures.
I don't see any reason to even think about bankruptcy. They're doing fine.
https://finance.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii...
[+] [-] IBM|8 years ago|reply
The only way Tesla avoids bankruptcy is if the markets keep believing in the Elon magic, because the operations are definitely not financing the investment required.
This is the key thing people miss when people falsely compare Tesla to Amazon. Amazon has always been free cash flow positive. They may never have turned a GAAP profit for many years, but they weren't issuing stock to finance their growth.
[+] [-] aaavl2821|8 years ago|reply
However I don't know what covenants are in those loan documents, and its possible that given the delays tesla could trip a covenant and get in trouble with lenders. Though I'm sure Elon has worked his magic on them as well
Hard to say if they're doing fine at this point, as the model 3 doesn't really show up in the financials yet. The real concern is that model 3 production capacity increases without sufficiently decreasing production efficiency. So revenue goes up but COGS skyrockets, and the business is structurally not profitable on even a gross profit basis. This would lead to huge financing needs, and also probably a drop in the stock price (though the stock price seems immune to dropping). This could lead to company failure and is not a theoretical risk
[+] [-] austenallred|8 years ago|reply
Granted there are some differences, but the strategy is the same.
[+] [-] mcguire|8 years ago|reply
Additional paid-in capital (https://finance.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii...) went from $3.4B to $7.8B in 2016 to $9.0B as of 9/30. Issuance of stock provided $1.9B in 2016 and $0.5B so far this year (https://finance.google.com/finance?q=NASDAQ%3ATSLA&fstype=ii...).
What happens when the currently-expected market correction hits and Tesla has a harder time going to the capital markets for money?
[+] [-] ArmandGrillet|8 years ago|reply
[+] [-] nCwLABXpfJLz|8 years ago|reply
Cash flow is up half a billion because they just issued 1.8 billion in junk bonds (which are already trading in minus territory btw). Meanwhile operating cash flows are increasingly negative to the tune of hundreds of millions per quarter.
Sure, they're fine if they continue to raise billions. But they're nowhere near profitable, and they're also going to continue to lose billions. What's going to happen if they receive a credit downgrade or institutional investors decide to stop playing along?
[+] [-] vectorEQ|8 years ago|reply
[+] [-] eru|8 years ago|reply
[+] [-] colordrops|8 years ago|reply
[+] [-] pbhowmic|8 years ago|reply
[+] [-] ChuckMcM|8 years ago|reply
That said, the point that sticks out at me in the article is this one -- "... because money is how we measure success. And this is in fact true of most companies. But it is not true of Tesla. 'When a measure becomes a target, it ceases to be a good measure,' and this is as true of money as it is of any other measure. The purpose of Tesla is not to make money;"
There is a tremendous amount of visibility put on the company, and Elon is up front about what they are trying to achieve. The arguments against them succeeding boil down to either 'we don't believe you can do what you say you can do.' or 'we don't understand why you are doing what you're doing, so it must be wrong.'
It used to really bug me when someone told me that what I was proposing was impossible. I work to do the necessary research and foundation work to understand the risks and challenges of a course of action and someone says "Well, I've never heard of anyone who could do that so you clearly are missing something." No discussion of the idea, no attempt to understand how I came to believe what I did.
One of the things I admire in Elon is that he seems really good at just completely ignoring that noise. It is something I have tried to cultivate as it is helpful in starting new businesses or projects to be able to not get bogged down by people who want to tell you why you are wrong and are unwilling to listen to how you think you may be right.
[+] [-] mlevental|8 years ago|reply
[+] [-] danso|8 years ago|reply
If you're an American, it does matter in the sense that the subsidies that allow Tesla to keep moonshotting with relative comfort are paid through your tax dollars [0]. Tax dollars that could either go back to your pocket, or otherwise indirectly benefit you by subsidizing a more effective venture. Hell, some of those tax dollars could even be used to help the original moonshot institution.
I think what Tesla and Musk are doing is very cool. But let's face it, lots of companies and individuals could promise cool things if they had a multi-billion cushion. I think the OP makes some decent points about how silly it is to care about immediate or substantial profit margins -- hell, any investor in Amazon would agree with that.
But it seems dangerously naive to just think this:
> But it is not true of Tesla. “When a measure becomes a target, it ceases to be a good measure,” and this is as true of money as it is of any other measure. The purpose of Tesla is not to make money; it is to pioneer fleets of smart mass-market electric cars, and the infrastructure to support them, and battery technology which is not limited to cars. Making money is ancillary.
That is the claimed purpose of Tesla. The author is confusing Tesla's self-interested claims with reality -- this is basically Kool-Aid-drinking-cultism. And giving Tesla and Musk the complete benefit of the doubt in terms of altruism, that doesn't mean that their positive dreaming has an infinite buffer against shitty implementation and business practices. Profit is definitely not everything, but it's a potentially very useful signal (among others) to weed out non-performance and incompetence.
[0] http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015...
[+] [-] mjamesaustin|8 years ago|reply
Yes they get ZEV credits, but the revenue from those pales in comparison to their sales, loans, and stock offerings.
Not to mention that most of the traditional car manufacturers in America received huge government bailouts to stay afloat in 2008, so even if you slight Tesla for receiving a loan (which they repaid early with interest) they are still on equal footing with other manufacturers.
[+] [-] hwillis|8 years ago|reply
[+] [-] chki|8 years ago|reply
Well, to me that statement seems to be at least dubious. If the company is loosing money and goes bankrupt it is obviously not worth something in its entirety - at least in its current form. (And I highly doubt that simply restructuring Tesla would do something about that.)
This does however not neglect the premise of the article. Even if Tesla would no longer exist in any form, there has been some creation of value for society as a whole.
[+] [-] mjw1007|8 years ago|reply
[+] [-] neurotech1|8 years ago|reply
Bankruptcy means the company has more debt obligations than assets, and has ran out of cash. It does not mean the company assets are worth nothing.
In a theoretical Chapter 11, Tesla Energy and the "battery factory" would still be worth many billions, even if they never sold another car.
Tesla is doing pretty good for a highly capital intensive and growing company.
[+] [-] empath75|8 years ago|reply
[+] [-] thewhitetulip|8 years ago|reply
Then came Tesla and now the fastest car is Tesla Roadster.
[+] [-] paulpauper|8 years ago|reply
the current stock price takes into account all those variables. When a bankrupt stock goes to near zero, that takes into account totality of all the intellectual property, factories, etc.
[+] [-] vasco|8 years ago|reply
At the moment they're in a very tough spot where they've issued bonds, folded Solar City into Tesla in a weird attempt at bad accounting and pretended like (already 3) new product lines were ready to take in pre-order money. Meanwhile they're using excess battery production capacity not being used for cars (which are stuck in slow production lines) for a quick (small) buck in Australia and Puerto Rico.
I think we're going to see either a secondary offer or new bonds being issued soon.
[+] [-] whamlastxmas|8 years ago|reply
[+] [-] xrayarx|8 years ago|reply
[+] [-] jaimex2|8 years ago|reply
"Whenever you have an unpriced externality you can't quite rely on the market to do the right thing. So in order to have electric vehicles come sooner than they otherwise would... electric vehicles were always going to be the long-term transportation mechanism, but to make that day come sooner, you have to bridge the gap with innovation. That was the goal with Tesla is to try to serve as a catalyst to accelerate the day, the day of electric vehicles. And I think when all is said and done, I am hopeful that historians will look back on Tesla and say that Tesla advanced that by at least 10 years, which that would be a huge victory of mine... in my mind."
- https://www.youtube.com/watch?v=jpcJ3jX-2DA
It's the same with SpaceX, even though its been profitable I don't think they have ever celebrated that. They keep aiming to burn money towards getting to Mars which itself is another money pit.
I think Elon is genuine, he's actions do follow his words. He doesn't care about money, he cares about advancing humanity for the thrills and exploration.
[+] [-] volgo|8 years ago|reply
As Warren Buffett once said, the market can be delusional a lot longer than you can be liquid. You can be right and still lose a ton of money
[+] [-] tim333|8 years ago|reply
A major box it doesn't tick from a short sellers perspective is the "make something people want" thing. Loads of people want it's cars and would be trucks. The main question is can they deliver them but I'd be wary being short in case they can.
[+] [-] bob_theslob646|8 years ago|reply
The question he is going to have to face is whether he can stay solvent longer than Tsla stock price is irrational.
My bet is he stays in 2-3 quarters until he makes his kill and then exits.
[+] [-] nCwLABXpfJLz|8 years ago|reply
[deleted]
[+] [-] sharpercoder|8 years ago|reply
Thought exercise: how can competition take serious levels while Tesla produces half or more of the world's battery capacity?
[+] [-] will_hughes|8 years ago|reply
This keeps getting repeated, but all I see are some meagre efforts which seem primarily focussed on headlines rather than actually delivering mass-scale EVs. Concepts. Demonstrators. The closest any of them have come is the Bolt (which is limited in availability, and their dealer networks regularly push people away from buying), and the Leaf (which until the most recent model still looked far too much like a golf buggy and had very limited range).
These are large companies with massive departments used to pushing out new vehicle models every year and updating production lines to suit.
I'm still yet to hear of any of the major manufacturers sign contracts for large scale battery deliveries to support any mass EV production.
I don't understand why their outlook is always 2019-2020-2025-2030 for their full EV range unless they're just hoping for Tesla to fail and finally be able to point out and say "See, EV doesn't work!" so they can go back to what they've been doing for a long while.
[+] [-] mankash666|8 years ago|reply
At this point they're betting on stock movements triggered by Musk, not company fundamentals. It's Vegas glorified
[+] [-] yters|8 years ago|reply
[+] [-] fragmede|8 years ago|reply
[+] [-] pocketsquare2|8 years ago|reply
Did Tesla file for bankruptcy? I'm confused. Nikolai Tesla filed for bankruptcy in 1916.
This is phenomenally irresponsible of TechCrunch generally, and Jon Evans specifically.
[+] [-] agumonkey|8 years ago|reply
He seems to be in some good sht (subpar assembly line for the batteries and/or engine having to be reassembled from scratch which is done according to him) so so far this particular problem is not out of control for Tesla, but then time is critical too, competition is ramping up, and laws are shifting (EV tax cut is gone now I believe).
I like Musk approach of going legacy free to stretch the limits of the current model, as he did for SpaceX. I'd be sad if Tesla choked enough to crash. If he just made it to the model 3 production that would be "cool".
I don't know how people in the know understand the recent Semi/Roadster unveiling, is it distraction to get some buzz or a final scheme to finance the model3 step with easier things to be done in 2020 (smaller market for Semi and I believe a litle less complex to build than a cramped 4 seater)
[+] [-] hkmurakami|8 years ago|reply
A non financially viable incarnation of a mission driven business will not be able to further its cause compared to its longer lived version. At some point a reckoning will come and take away the path to your objective.
See the recent news about Etsy listing its way.
[+] [-] Apocryphon|8 years ago|reply
[+] [-] mbesto|8 years ago|reply
I guess the author has glanced over the billions of subsidies that come from taxpayers? [0] So ya, I think American taxpayers should care about Tesla's bankruptcy.
PS - The author of this article is the CTO of a company who's customer is, yup, you guessed it, Tesla. [1]
TC at it's finest folks.
[0] - http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015...
[1] - https://happyfuncorp.com/case_studies/hfc-labs-making-tesla-...
[+] [-] nkoren|8 years ago|reply
[+] [-] devrand|8 years ago|reply
[+] [-] dewski|8 years ago|reply
> HFC co-founders Ben Schippers and Will Schenk are both Tesla owners and wanted to levelup their driving experience, pushing the limits of the data being collected to help solve typical ownership problems that Tesla itself had not yet addressed and add a bit of fun.
Where is your source?
[+] [-] acjohnson55|8 years ago|reply
Point being, we want exactly this sort of thing, but it's foolish to expect the market to make this sort of investment very often.
[+] [-] lmilcin|8 years ago|reply
Tesla is not a conventional business. It is more of an edge case where you have to put your thinking hat to make sense of it.
[+] [-] cbanek|8 years ago|reply
This seems to be the exact kind of thinking that led to the dotcom bust.
I've commented before on the whole Tesla valuation thing, and people try to think of it like a tech company, and want to value it like a tech company. Tesla needs to actually produce things in a factory, deal with regulations and supply chain, which are very conventional business problems, and where the trouble is.
[+] [-] aaavl2821|8 years ago|reply
For tesla, that is necessary, because no rational investor would invest in an electric car startup. But if you can get investors excited enough about some vague but very promising future, they will overlook short term failures and be guided less by fact than belief
[+] [-] maxxxxx|8 years ago|reply
Tesla is a car and battery manufacturer. That's a very conventional business.
[+] [-] verletx64|8 years ago|reply
It is far too simplistic to imply that those that are a bit bearish on Tesla's prospects are simply not "wearing their thinking caps".
In the end, you can't discount what 'business people' think, because they're the ones on the other end of the table.
[+] [-] skybrian|8 years ago|reply