The gross excesses of the Western financial system are rapidly approaching their mathematical limits.
Or at least, that's what the numbers say.
The stock price of Tesla, a key factor in the markets continuing "strength", is getting out of touch with reality as it increasingly appears the shareholders of the company are clueless.
Nevertheless, that hasn't stopped said shareholders from giving Musk a pay package that could be worth as much as $50 Billion (!!), plus stock upside to his already existent options, assuming he hits some arbitrary milestones for market cap.
"...plan sets cash compensation at zero but would grant Musk up to 20.3 million shares if Tesla meets a series of financial hurdles and increases its market cap to at least $650 billion, from roughly $50 billion today."
Conspicuously absent was any need for Tesla to actually be a profitable company at any point, rendering the performance targets Musk must hit fucking asinine.
Tesla is priced at twice as much as Ford. Yet, Tesla sold 100,000 cars last year at a 2 BILLION LOSS while Ford sold 6 MILLION cars at a $7.6 BILLION PROFIT. Tesla is broke and needs new funding while Ford has a war-chest of $12 billion in cash.
When your market leading companies are enormous, objective failures that burn money and survive on subsidy...well, this is the stuff market tops are made of.
At those numbers, Tesla's value is negative in my book. It's an actual worthless company. It's proficient at only two things - making promises it can't keep and losing money. That makes it useless as a corporation. Worse than nothing.
However, that's not even the worst of it - that's just what you'll see if you look at even the most basic, public financial metrics. Tesla has also been secretly under investigation by the SEC, and rather thoroughly it would appear: "there have been 85 SEC requests for additional information and disclosures in the last 5 years. This compares to Ford Motor Company’s total of zero over the same time frame."
In other words, not only are they nearly broke and burning money faster than a cash bonfire, they are unlikely to get much confidence from the public borrowing markets.
I searched long and hard for a narrative other than shareholder idiocy to describe their continuing faith in Musk, but I just can't come up with one. Musk's pay package essentially pays nothing if he fails to meet the market cap milestones laid out in the contract. I tried to come up with a way this was actually shrewd - perhaps the shareholders expected Musk to fail and wanted to avoid paying him. However, the destruction of shareholder equity that would come from knowingly appointing incompetent leadership would far outweigh any savings on executive compensation. "Penny-wise and pound-foolish," as they say across the pond.
All I can say is, if you own Tesla stock, be ready to get the heck out of Dodge. Because, ironically, you'd probably be better off investing in Dodge than Tesla at this point. Just ask Al Bundy.
Plus, you won't have to charge it.
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I read somewhere that Musk would be making more than the rest of the CEO's in the s&p 500 put together. Laughable
My two cents: Tesla (along with space-x) is doing what is needed. These electric cars that Tesla produces have amazing reliability. These cars - aside from replacing the battery packs about every 10 years - will last very long times with very few problems. There's no extreme heat, no need for oil changes or air filter replacements, tune ups. Your engine starter failing is a thing of the past. It's a huge electric motor and some lithium ion batteries and a computer to control it all. The highway auto-pilot (self driving) is VERY impressive and would make driving long distances MUCH safer. Imagine being tired on a 12-hour drive. If most of that drive is done by auto-pilot, the chances of an accident caused by a momentary lapse of attention decrease dramatically. The odds of going over the white lines or yellow lines on long drives with auto-pilot decreases dramatically.
Sure, Tesla is making no money. We all know this, but we all know that what Tesla is doing is what NEEDS to happen. They will eventually become profitable - I don't know when that will be, but it MUST be the future. Have you seen the smog in L.A. or New York? It's disgusting - even if it's only local.
The problem is Tesla is NOT doing what needs to happen. Sure they are building a luxury electric car. But providing a fine ride for a few millionaires is not solving your smog problem.
The electric car technology, as it stands today, is not ready for mass adoption. And Tesla will not be the company to get it there. At some point the money spigot will dry up, Musk will move off to another “bold” idea and Tesla will quiver and die.
You're not following their plan very closely if you think it stops at millionaires. Do you think the electric companies strung lines out to the poor's houses first? Nope. If you'd listen to Musk's plan, it's to sell at high price in low quantity, then mid price at mid quantity, then low price at high quantity. This takes several decades to achieve.
Sounds great. Except they need to survive and the free money is not going to last that long
Big fans of the petro-dollar over here, didn't realize...
I think it will last that long - electric cars are going to be a multi-trillion dollar industry. The payoff is too large to miss out on.
"These electric cars that Tesla produces have amazing reliability."
This is an outright falsehood. They produce poorly engineered vehicles Frankenstein'ed from other automakers parts, because they can't machine their own accurately. They use a Mercedes steering column.
https://www.greencarreports.com/news/1115659_tesla-model-3-quality-is-terrible-but-does-it-matter-to-buyers
https://www.reuters.com/article/us-tesla-quality-insight/build-fast-fix-later-speed-hurts-quality-at-tesla-some-workers-say-idUSKBN1DT0N3
https://www.cnbc.com/2018/01/25/tesla-employees-say-gigafactory-problems-worse-than-known.html
http://www.thedrive.com/sheetmetal/9085/why-is-teslas-quality-control-still-so-poor
http://fortune.com/2017/10/30/tesla-model-s-quality-problems-review/
On and on and on.
I've not completely read all the articles you've cited, only briefly did I skim through some of them. What I did gather is that none of these things are concerning the engine - and the engine is exactly what I verbatim referred to:
"There's no extreme heat, no need for oil changes or air filter replacements, tune ups. Your engine starter failing is a thing of the past."
I was thinking more about the links you posted. I could probably find a similarly long (if not longer) list of problems with other car manufacturer products. So I'm not moved by these links.
"Sure, Tesla is making no money."
I'm glad we both agree that they are utterly failing at what is, by definition, their one and only task - producing profit as a corporation for shareholders, who OWN them.
Tesla is not going anywhere anytime soon because people are investing in Elon more than the product he delivers. People have become infatuated with him and he can do no wrong in many investors eyes. I agree that Tesla does not have a lot of fundamental value but speculation can hold the stocks price up for a long time. There were many, many other companies out there similar to Tesla in that they didn't turn a profit for a very long time while still trading at an absurd PE. Tesla has missed production numbers time and time again yet the stock still does not dump. It will be interesting to follow in the coming years.
"People have become infatuated with him and he can do no wrong in many investors eyes."
I have to agree, but this could turn on a dime.
somehow i always Stumbleupon* your posts. might as well follow you
Got ya!
Hahahaha. The best!
Yup, this insanity cannot continue.
(although I have been saying that since post 2009, bank bail outs an QE)
Me too. I'm starting to feel like a broken record.
I know the feeling.
What other choice is there? lol
( I can't do silent)
I think I'm in the same camp as you thinking Musk is a fundamental con-artist... He's the new Steve Jobs... A shrewd businessman with the ability to capture the imagination of those who are looking for leaders to lead them.
The fact that the man spoke ill of Tesla (saying he never actually did anything) and said that he saw himself "more as an Edison" because Edison supposedly brought "his" (stolen) technologies to market and change the "face of the world"... (all horse-shit)...
Basically, Musk is somebody who sees these "new" (old) technologies coming together real nicely and he sees himself as the guy who can exploit these technologies and get a kind of cult-of-personality like hold on the market.
(I think most billionaires look at the world in this way anyway)
But there's really nothing novel or original about his speech... Even his whole esoteric spiritual beliefs are basically just a post-modern update we might term techno-catholicism... techno-neo-platonism or some shit...
I don't buy into Musk period (didn't he have something to do with Paypal? Good enough of a reason to pitch-fork storm his castle and torch the damn place in my boo)
At least Jobs produced a product that a ton of people seemed satisfied with.
I have a feeling Musk, a "genius" who gets divorced and robbed by the same woman twice, is not going to accomplish a similar outcome.
LOL
Good one
I don't want the stocks,I want the car. I would even settle for one of the semi trucks... :-)
I'll take one of the roadsters that he's promising for, uh, 2019 (?) which currently defy the laws of physics on battery weights.
I'm sure he'll invent something to solve the little problem of reality.
We're about to find out who's been swimming naked.
Elon Musk was refused his request to be CEO of PayPal, and for good reason. Tesla and Space X are fancy speculative gambles or a luxury baubles the upper class flaunts as accessory at cocktail parties. Mansions that cost above a certain price point tend never to fall with the general markey trend because the entire purpose of these luxury goods is to "lose" money in overpaying as bragging rights by the upper class. Tesla is technology geeks' luxury mansion.
Hmm, good points. That could actually be enough to let them carve out a niche, despite their overpriced products.
Funny thing to think that Facebook went down the same amount that Tesla
Is worth.
That is an amusing anecdote. Hadn't noticed that, thank you.
I honestly dissagree. I think tesla is going to mars with their company, im thinking 12 trillion by 2025. Musk is a polymath. Enough said. His plans are generous and self promotional. He’s got a billion millennials at his fingertips just waiting for his satellites to hit the air and fix the world. Blockchain plus musk = end of the age of technological suppression.
Well, we'll see. I think it's a bad bet but it's not impossible.
Polymath? Maybe.
Dumb and broken enough to be divorced and robbed by the same woman twice? Absolutely.
Amount of money I'd trust him with? $200, tops.
Savage, this is the most hardcore response, haha I love it!
Thanks for all the info!
There are rumors floating around that Apple might buy Tesla.
I wonder if that would run afoul of regulators (too monopolistic?).
What have you done Lexi?!! :-)
Very informative.
Did not know Tsla was in this much trouble.
Some of my stock trading buddies are buying Tsla stocks thinking it will go up in short-term...
Long term, one should short the stock or like you said, get out of Tsla all together.
thanks. have a nice day
Tesla is an amazing car. But it is not so many stock in Indonesia.
Elon said himself don't by Tesla stock it's to high.
Tesla is changing the dynamics of the market itself. By 2030, 50% of vehicles would be electric. Once that happens only god can predict what market share will tesla hold. Its a good stock to hold. Chances are it will go higher as the market changes.
Except...it's bankrupt, has never turned a profit, and is a money bonfire.
I will buy a Tesla tomorrow if I could. Why is Tesla loosing money? I am sure people are lining up to buy it. With all the woman and emasculated men out there this silent and clean beast is something they would pay for.
Elon over promises on things Tesla couldn't possibly deliver on. They miss nearly all production #s every quarter and it costs way too much money to produce Tesla models (they're only making about 20% per car above production costs)
Nice one.
Its not always about profit... but having the technologie to be able to make profit in future isn't bad to have at all.
Good informasi i resteeed, and upvoted
Information is very useful for me, better invest in Dodge than Tesla, I will also tell friends who have shares in Tesla to get out
Tesla, Inc. Stock Chart
$279.18
Assholed 8.22%on 03/27/2018
Many companies have gone from up to down, but all those that works with technology and future features I think that only can go up
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I'm not going to try to say whether tesla stock is over priced or not, (it probability is) but to say that the company is worthless just because they are not profitable is misleading at best. Most startups take many years to be profitable. They "bleed" money as they ramp up their business to complete in the market. Tesla may have bit off more than they can chew but think of all the expenses they have to catch up on. You mention Ford, Ford has been building it's infrastructure for over 100 years! To expect tesla to be profitable when competing in this market while they are in the startup phase is too much to ask. In fact, tesla is profitable when selling the model s. But all that profit is going straight into ramping up model x and model 3 production. This was Elon's "master plan" and it is going exactly as expected so far. We'll see if he can continue to deliver.
How long did it take Amazon to turn a profit?
Fair point, although I've complained about that too. I think they were/are long overvalued.
They are moving into a much wider business though....pretty much everything at this point.
It actually only took Amazon 4 years to turn a profit from the date of their IPO. I say "only" acting like taking 4 years to turn a profit is normal, but when you compare it to Tesla, 4 years sounds like nothing. Tesla IPOed in 2010 and still has not turned a profit 8 years later.
What do you think about this analysis?
