Author Topic: Is Tesla a good investment?  (Read 113765 times)

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #550 on: November 24, 2020, 11:07:00 AM »
OK, forget about earnings and the now 1,027 PE ratio.
Tesla's price to free cash flow is 302. So the money it internally generates that is available to reinvest in itself is 0.33% of its price.
The price to book value is 27.48. So one could take the market cap and buy everything TSLA owns 27.48 times. 

The point is this: Putting money into TSLA or keeping it there long term is 100% a bet on a narrative that involves the company reaching some point of maturity where their market share exceeds that of the world's next six largest automakers, as their market cap already does today. They will presumably do this without diluting shareholders too much because they'll use their free cash flow, which, as noted, is 0.33% of the price. Just for fun, double the numbers and see if that helps. Go wild and apply the company's 6.1% operating margin to a three or four times increase in revenue (since we're being generous, include the sale of environmental credits to fossil-fuel automakers, which accounts for 7% of revenue). Build me a 10 year model on these numbers that gets us to industry-standard margins and PE ratios for a future Tesla with Toyota-like worldwide dominance. Find a way the narrative makes sense on a spreadsheet and then we'll ask whether TSLA can outcompete VW and the Chinese automakers. Remember in your spreadsheet assumptions we are selling capital-intensive hardware, not software.


mistymoney

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Re: Is Tesla a good investment?
« Reply #551 on: November 24, 2020, 11:52:06 AM »
https://www.benzinga.com/media/20/11/18510818/cramer-says-teslas-valuation-is-easier-to-justify-as-tech-company-not-auto

interesting take.

Quote
Cramer said the company has future catalysts that could keep people from selling the stock with China sales, the German factory taking off and news on the Cybertruck: “It’s a technology company, not an auto company.”

Cramer said if Tesla was just an automotive company, it would be harder to justify the valuation

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #552 on: November 24, 2020, 12:21:47 PM »
https://www.benzinga.com/media/20/11/18510818/cramer-says-teslas-valuation-is-easier-to-justify-as-tech-company-not-auto

interesting take.

Quote
Cramer said the company has future catalysts that could keep people from selling the stock with China sales, the German factory taking off and news on the Cybertruck: “It’s a technology company, not an auto company.”

Cramer said if Tesla was just an automotive company, it would be harder to justify the valuation

Does Cramer know TSLA is an auto company? I.e. it can't make copies of the model S as easily as Microsoft can make copies of Windows or Salesforce can add accounts?

mistymoney

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Re: Is Tesla a good investment?
« Reply #553 on: November 24, 2020, 12:27:36 PM »
I guess you'll have to ask him yourself!

lemonlyman

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Re: Is Tesla a good investment?
« Reply #554 on: November 24, 2020, 01:17:24 PM »
OK, forget about earnings and the now 1,027 PE ratio.
Tesla's price to free cash flow is 302. So the money it internally generates that is available to reinvest in itself is 0.33% of its price.
The price to book value is 27.48. So one could take the market cap and buy everything TSLA owns 27.48 times. 

The point is this: Putting money into TSLA or keeping it there long term is 100% a bet on a narrative that involves the company reaching some point of maturity where their market share exceeds that of the world's next six largest automakers, as their market cap already does today. They will presumably do this without diluting shareholders too much because they'll use their free cash flow, which, as noted, is 0.33% of the price. Just for fun, double the numbers and see if that helps. Go wild and apply the company's 6.1% operating margin to a three or four times increase in revenue (since we're being generous, include the sale of environmental credits to fossil-fuel automakers, which accounts for 7% of revenue). Build me a 10 year model on these numbers that gets us to industry-standard margins and PE ratios for a future Tesla with Toyota-like worldwide dominance. Find a way the narrative makes sense on a spreadsheet and then we'll ask whether TSLA can outcompete VW and the Chinese automakers. Remember in your spreadsheet assumptions we are selling capital-intensive hardware, not software.

I don't make valuations with your constrictions in mind. What you consider wild and generous, I consider a drastic low ball, especially over a 10 year period. I don't know but my assumption is you invest in stock funds and not individual companies so not sure what the point would be anyways. We both know I can't change your mind on TSLA being a good investment or not. My point is there's more to it than just putting it all on 26.

ender

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Re: Is Tesla a good investment?
« Reply #555 on: November 25, 2020, 09:35:53 PM »
OK, forget about earnings and the now 1,027 PE ratio.
Tesla's price to free cash flow is 302. So the money it internally generates that is available to reinvest in itself is 0.33% of its price.
The price to book value is 27.48. So one could take the market cap and buy everything TSLA owns 27.48 times. 

The point is this: Putting money into TSLA or keeping it there long term is 100% a bet on a narrative that involves the company reaching some point of maturity where their market share exceeds that of the world's next six largest automakers, as their market cap already does today. They will presumably do this without diluting shareholders too much because they'll use their free cash flow, which, as noted, is 0.33% of the price. Just for fun, double the numbers and see if that helps. Go wild and apply the company's 6.1% operating margin to a three or four times increase in revenue (since we're being generous, include the sale of environmental credits to fossil-fuel automakers, which accounts for 7% of revenue). Build me a 10 year model on these numbers that gets us to industry-standard margins and PE ratios for a future Tesla with Toyota-like worldwide dominance. Find a way the narrative makes sense on a spreadsheet and then we'll ask whether TSLA can outcompete VW and the Chinese automakers. Remember in your spreadsheet assumptions we are selling capital-intensive hardware, not software.

I don't necessarily disagree with you (having worked in multi billion dollar factories building large equipment before). My point is that PE alone doesn't tell the whole story.

That being said, I think it's batshit insane what Tesla is priced at.


aspiringnomad

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Re: Is Tesla a good investment?
« Reply #556 on: November 26, 2020, 07:29:40 PM »
This is about where I expected TSLA to be once the market started pricing in its potential without fear of outright failure. Now that it's here, the upside is much more limited though I do think it could still ~double in the next couple years if things go well. Certainly, access to capital is no longer an issue and access to the best engineering talent still leads the field. Realistically, I should start winding down my position next calendar year when I'll have no earned income. But I have trouble letting go.

mistymoney

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Re: Is Tesla a good investment?
« Reply #557 on: November 26, 2020, 08:30:47 PM »
How much do you have?

and what happened to all those people shorting tesla?  that's gotta hurt.

aspiringnomad

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Re: Is Tesla a good investment?
« Reply #558 on: November 27, 2020, 05:31:37 PM »
How much do you have?

and what happened to all those people shorting tesla?  that's gotta hurt.

Rather not say, but the position grew to more than a fifth of my portfolio before I sold some shares after the split. It's creeping back up there.

TomTX

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Re: Is Tesla a good investment?
« Reply #559 on: November 28, 2020, 10:55:10 AM »
How much do you have?

and what happened to all those people shorting tesla?  that's gotta hurt.

Last I heard, known shorts had lost more money than Tesla has ever raised in stock sales. Billions and Billions of dollars.

mistymoney

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Re: Is Tesla a good investment?
« Reply #560 on: November 28, 2020, 12:34:18 PM »
How much do you have?

and what happened to all those people shorting tesla?  that's gotta hurt.

Last I heard, known shorts had lost more money than Tesla has ever raised in stock sales. Billions and Billions of dollars.

Wow! Now shorting - that I think is the real 'gambling'. I'm not even sure how that got to be a thing, negative investing....but there ya go!

badger1988

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Re: Is Tesla a good investment?
« Reply #561 on: December 07, 2020, 04:56:23 PM »
June 3rd, 2019:

I had been watching TSLA stock fall and following the news around the SEC fraud litigation against Musk...I very rarely purchase individual stocks, but seeing the price fall below $180 I decided I wanted to take a chance. That night, I put my three boys to bed, logged into my Vanguard Roth IRA and entered a transaction to buy ~$100,000 worth of TSLA (roughly 20% of my investment portfolio at the time). Just as I was about to submit, one of my then 3-year-old twins burst out of his bedroom needing attention. My session timed out. After reconsidering I decided to just stick with my 100% index fund strategy. 1.5 years and a 5:1 stock split later, that ~$100k gamble would be worth ~$1.8M. Of course, I surely would have sold long before now...but a guy can dream, right? On the bright side, my kids have since settled into a much better bedtime routine.

mistymoney

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Re: Is Tesla a good investment?
« Reply #562 on: December 07, 2020, 04:58:14 PM »
June 3rd, 2019:

I had been watching TSLA stock fall and following the news around the SEC fraud litigation against Musk...I very rarely purchase individual stocks, but seeing the price fall below $180 I decided I wanted to take a chance. That night, I put my three boys to bed, logged into my Vanguard Roth IRA and entered a transaction to buy ~$100,000 worth of TSLA (roughly 20% of my investment portfolio at the time). Just as I was about to submit, one of my then 3-year-old twins burst out of his bedroom needing attention. My session timed out. After reconsidering I decided to just stick with my 100% index fund strategy. 1.5 years and a 5:1 stock split later, that ~$100k gamble would be worth ~$1.8M. Of course, I surely would have sold long before now...but a guy can dream, right? On the bright side, my kids have since settled into a much better bedtime routine.

oh wow! That is something to cause a few pangs for sure!

they do say that kids are expensive. ;)

Mrs. Sloth

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Re: Is Tesla a good investment?
« Reply #563 on: December 07, 2020, 05:04:47 PM »
June 3rd, 2019:

I had been watching TSLA stock fall and following the news around the SEC fraud litigation against Musk...I very rarely purchase individual stocks, but seeing the price fall below $180 I decided I wanted to take a chance. That night, I put my three boys to bed, logged into my Vanguard Roth IRA and entered a transaction to buy ~$100,000 worth of TSLA (roughly 20% of my investment portfolio at the time). Just as I was about to submit, one of my then 3-year-old twins burst out of his bedroom needing attention. My session timed out. After reconsidering I decided to just stick with my 100% index fund strategy. 1.5 years and a 5:1 stock split later, that ~$100k gamble would be worth ~$1.8M. Of course, I surely would have sold long before now...but a guy can dream, right? On the bright side, my kids have since settled into a much better bedtime routine.

DANG!! Very entertaining read...glad you have a sense a humor about it with that last note about the bright side of things.

v8rx7guy

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Re: Is Tesla a good investment?
« Reply #564 on: December 07, 2020, 05:14:45 PM »
Geez... another 7%

PaulMaxime

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Re: Is Tesla a good investment?
« Reply #565 on: December 07, 2020, 07:58:51 PM »
After hours it's 649.24.

Another $28 and I'll have 100x my initial investment of 8 years ago.


mistymoney

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Re: Is Tesla a good investment?
« Reply #566 on: December 08, 2020, 07:08:24 AM »
After hours it's 649.24.

Another $28 and I'll have 100x my initial investment of 8 years ago.

oo - down so far today! but not by a whole bunch considering!

PaulMaxime

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Re: Is Tesla a good investment?
« Reply #567 on: December 08, 2020, 10:52:12 AM »
After hours it's 649.24.

Another $28 and I'll have 100x my initial investment of 8 years ago.

oo - down so far today! but not by a whole bunch considering!

Looks like they are doing another stock offering raising $5B selling shares at market. They did one of these earlier this year. At this point it's almost free money for them.

It doesn't really even take a bite out of all the shares the index funds are going to need to buy in order to rebalance into TSLA on the 21st.


3toesloth

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Re: Is Tesla a good investment?
« Reply #568 on: December 10, 2020, 06:05:55 PM »
As an engineer I can say that the majority of us with work experience would not work for Tesla. The ones that do start looking elsewhere real quick or are sent packing when they refuse to work crazy hours or dare to have differing opinions. They don't have any special sauce there just a bottomless credit card in the form of share issuance.

v8rx7guy

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ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #570 on: December 22, 2020, 07:32:41 PM »
As an engineer I can say that the majority of us with work experience would not work for Tesla. The ones that do start looking elsewhere real quick or are sent packing when they refuse to work crazy hours or dare to have differing opinions. They don't have any special sauce there just a bottomless credit card in the form of share issuance.

You seem to have an irrational hatred for Tesla for someone who is simply an observer? You also repeatedly post demonstrably false information. SpaceX and Tesla are literally the most desirable employers for top US engineering graduates.

https://www.cnbc.com/2019/06/06/the-10-most-attractive-employers-for-engineering-students.html

Unless you have firsthand experience perhaps you should stop posting about that which you know not. Please don't bother posting the anecdotal sob stories of a self-selected group of former employees. Elon is tough to work for and very demanding, so was every good coach, manager and leader I've had. The tradeoff is you literally get to help transform how society uses energy and transport people and goods or make the human race and interplanetary species. Yep, nothing to see here, just your average run-of-the mill companies.

mistymoney

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Re: Is Tesla a good investment?
« Reply #571 on: January 07, 2021, 02:53:37 PM »
Telsa is working out as a great investment for some people....



https://www.cnn.com/2021/01/07/investing/elon-musk-jeff-bezos-richest-person/index.html

Elon Musk overtakes Jeff Bezos to become world's richest person

Bloodbuzz

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Re: Is Tesla a good investment?
« Reply #572 on: January 09, 2021, 08:33:19 AM »
Reading this thread is very interesting - I used to be 100% in index funds and on a typical mustachian FIRE path but on a 'lower' salary and aiming for lean FIRE in about 10 years. In 2019 I decided to sell most of my index funds and buy shares in Tesla and a couple of Crispr companies. I'm now approaching my minimum leanfire target and basically saved myself 10 years of office work.

I would never say I wasn't very lucky, or that other people should follow this approach, but I do generally think that putting a bit of money (not everything obv) towards disruptive and innovative technologies is probably not a bad idea. Another useful aspect is that some extremely smart people with incredible track records (Cathie Wood, Chamath Palihapitiya etc) are putting their ideas and ways of thinking online for free.

mizzourah2006

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Re: Is Tesla a good investment?
« Reply #573 on: January 09, 2021, 09:19:29 AM »
Reading this thread is very interesting - I used to be 100% in index funds and on a typical mustachian FIRE path but on a 'lower' salary and aiming for lean FIRE in about 10 years. In 2019 I decided to sell most of my index funds and buy shares in Tesla and a couple of Crispr companies. I'm now approaching my minimum leanfire target and basically saved myself 10 years of office work.

I would never say I wasn't very lucky, or that other people should follow this approach, but I do generally think that putting a bit of money (not everything obv) towards disruptive and innovative technologies is probably not a bad idea. Another useful aspect is that some extremely smart people with incredible track records (Cathie Wood, Chamath Palihapitiya etc) are putting their ideas and ways of thinking online for free.


I don't disagree with this per se, but it's a bit of survivorship bias. Let's say that value investing was in vogue this past 3-5 years instead of emerging tech. No one would know who Cathie Wood and Charmath Palihaptiya are, but there would be 2 other people you just listed instead.

Bloodbuzz

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Re: Is Tesla a good investment?
« Reply #574 on: January 09, 2021, 10:06:33 AM »
Reading this thread is very interesting - I used to be 100% in index funds and on a typical mustachian FIRE path but on a 'lower' salary and aiming for lean FIRE in about 10 years. In 2019 I decided to sell most of my index funds and buy shares in Tesla and a couple of Crispr companies. I'm now approaching my minimum leanfire target and basically saved myself 10 years of office work.

I would never say I wasn't very lucky, or that other people should follow this approach, but I do generally think that putting a bit of money (not everything obv) towards disruptive and innovative technologies is probably not a bad idea. Another useful aspect is that some extremely smart people with incredible track records (Cathie Wood, Chamath Palihapitiya etc) are putting their ideas and ways of thinking online for free.


I don't disagree with this per se, but it's a bit of survivorship bias. Let's say that value investing was in vogue this past 3-5 years instead of emerging tech. No one would know who Cathie Wood and Charmath Palihaptiya are, but there would be 2 other people you just listed instead.

Yes for sure that's a good point about survivorship bias. I think its great that these days its very easy to learn about so many different investing styles, whether its MMM, Warren Buffet, Dave Ramsey, Gary Vaynerchuk etc, and then you can figure out which approach might work for you.

Roland of Gilead

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Re: Is Tesla a good investment?
« Reply #575 on: January 09, 2021, 10:31:07 AM »
Kind of bummed I missed out on both bitcoin and Tesla.   Bitcoin has done way better but either one would have required a crystal ball to put serious money into years ago.

PaulMaxime

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Re: Is Tesla a good investment?
« Reply #576 on: January 09, 2021, 11:30:25 AM »
Telsa is working out as a great investment for some people....



https://www.cnn.com/2021/01/07/investing/elon-musk-jeff-bezos-richest-person/index.html

Elon Musk overtakes Jeff Bezos to become world's richest person

I'm one of these people. I bought Tesla stock back in Feb 2012 and am now up nearly 12900% on that initial purchase. I've bought more over the years as well.

Abe

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Re: Is Tesla a good investment?
« Reply #577 on: January 09, 2021, 12:56:25 PM »
Yeah I got lucky and bought it at the IPO on a whim before I had a family to look out for, then forgot for several years until we started saving money regularly. Kind of a dumb system I had, but got lucky once in my life! Definitely never doing that again and agree it's over-valued (though it'd be awesome if the battery plan comes to fruition).

Christof

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Re: Is Tesla a good investment?
« Reply #578 on: January 09, 2021, 03:39:17 PM »
I'm one of these people. I bought Tesla stock back in Feb 2012 and am now up nearly 12900% on that initial purchase. I've bought more over the years as well.

Hmm, I bought ENPH (Enphase) at 1.42 two years ago and it is 170.08 today (numbers are in Euros). I also bought Libbey two years ago and it‘s worth nothing today. Both were totally random investments, because I believe that math and statistics win in the long run. That has (fortunately) nothing to do with my (in)ability to pick the right stock.

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #579 on: January 10, 2021, 01:15:15 PM »
Reading this thread is very interesting - I used to be 100% in index funds and on a typical mustachian FIRE path but on a 'lower' salary and aiming for lean FIRE in about 10 years. In 2019 I decided to sell most of my index funds and buy shares in Tesla and a couple of Crispr companies. I'm now approaching my minimum leanfire target and basically saved myself 10 years of office work.

I would never say I wasn't very lucky, or that other people should follow this approach, but I do generally think that putting a bit of money (not everything obv) towards disruptive and innovative technologies is probably not a bad idea. Another useful aspect is that some extremely smart people with incredible track records (Cathie Wood, Chamath Palihapitiya etc) are putting their ideas and ways of thinking online for free.


I don't disagree with this per se, but it's a bit of survivorship bias. Let's say that value investing was in vogue this past 3-5 years instead of emerging tech. No one would know who Cathie Wood and Charmath Palihaptiya are, but there would be 2 other people you just listed instead.

Yes for sure that's a good point about survivorship bias. I think its great that these days its very easy to learn about so many different investing styles, whether its MMM, Warren Buffet, Dave Ramsey, Gary Vaynerchuk etc, and then you can figure out which approach might work for you.

IIRC there were a lot of people 3-5 years ago who were talking about overweighting in oil companies, Berkshire Hathaway, “dividend aristocrats”, or just shorting the market. Presumably they are all indexers by now, except for the true believers who have found a supportive information bubble community in sub-forums. Those who picked big tech, Tesla, and crypto get to hang out in the main forums. Depending on the numbers and the specifics of the future, they might be the unlucky ones.

Kroaler

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Re: Is Tesla a good investment?
« Reply #580 on: January 10, 2021, 04:19:11 PM »
June 3rd, 2019:

I had been watching TSLA stock fall and following the news around the SEC fraud litigation against Musk...I very rarely purchase individual stocks, but seeing the price fall below $180 I decided I wanted to take a chance. That night, I put my three boys to bed, logged into my Vanguard Roth IRA and entered a transaction to buy ~$100,000 worth of TSLA (roughly 20% of my investment portfolio at the time). Just as I was about to submit, one of my then 3-year-old twins burst out of his bedroom needing attention. My session timed out. After reconsidering I decided to just stick with my 100% index fund strategy. 1.5 years and a 5:1 stock split later, that ~$100k gamble would be worth ~$1.8M. Of course, I surely would have sold long before now...but a guy can dream, right? On the bright side, my kids have since settled into a much better bedtime routine.

DANG!! Very entertaining read...glad you have a sense a humor about it with that last note about the bright side of things.

I still look at my tesla job offer from August 2018 that came with a sign on bonus.  It would be over a million $ now.

Mrs. Sloth

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Re: Is Tesla a good investment?
« Reply #581 on: January 10, 2021, 09:47:54 PM »
June 3rd, 2019:

I had been watching TSLA stock fall and following the news around the SEC fraud litigation against Musk...I very rarely purchase individual stocks, but seeing the price fall below $180 I decided I wanted to take a chance. That night, I put my three boys to bed, logged into my Vanguard Roth IRA and entered a transaction to buy ~$100,000 worth of TSLA (roughly 20% of my investment portfolio at the time). Just as I was about to submit, one of my then 3-year-old twins burst out of his bedroom needing attention. My session timed out. After reconsidering I decided to just stick with my 100% index fund strategy. 1.5 years and a 5:1 stock split later, that ~$100k gamble would be worth ~$1.8M. Of course, I surely would have sold long before now...but a guy can dream, right? On the bright side, my kids have since settled into a much better bedtime routine.

DANG!! Very entertaining read...glad you have a sense a humor about it with that last note about the bright side of things.

I still look at my tesla job offer from August 2018 that came with a sign on bonus.  It would be over a million $ now.

Man... that sounds rough to me. How do you feel?

talltexan

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Re: Is Tesla a good investment?
« Reply #582 on: January 14, 2021, 08:26:18 AM »
You could be forgiven for seeing what was happening in August 2018 and thinking the drama wasn't worth it.

kenmoremmm

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Re: Is Tesla a good investment?
« Reply #583 on: February 08, 2021, 11:14:56 AM »
https://www.nytimes.com/live/2021/02/08/business/stock-market-today?type=styln-live-updates&label=business%20updates&index=1&action=click&module=Spotlight&pgtype=Homepage#tesla-quality-china
Quote
Chinese regulators met with executives from Tesla recently after several government agencies reported “an unusual acceleration” of complaints from consumers about battery fires and other quality issues with the company’s electric cars.

In a post on the Chinese social media platform WeChat, the State Administration for Market Regulation said officials from five government agencies interviewed Tesla executives and “asked them to strictly abide by Chinese laws and regulations, strengthen internal management, and implement corporate quality and safety regulations.”

Tesla acknowledged its “shortcomings in the business process,” and agreed to improve the quality and safety of its vehicles, the regulator said in the posting.

The electric carmaker has struggled with quality issues as it has scaled its production from tens of thousand cars a year to 500,000 in 2020. On social media, customers have documented numerous problems with new Teslas, including large gaps between body panels, poor paint jobs and chipped glass. Those complaints have been echoed in surveys about and reviews of the company’s cars by J.D. Power and Consumer Reports.

Last week, Tesla recalled 135,000 vehicles in the United States to deal with a problem with touch screens in its Model S and Model Y cars. The screens had been found to have a high rate of failures. Tesla had initially resisted recalling the cars but came under pressure to do so by the National Highway Transportation Safety Administration.

In a letter to the U.S. auto safety regulator last month, a Tesla executive said the screens, which drivers use to control many of the functions of their cars, were not meant to last more than five or six years.

talltexan

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Re: Is Tesla a good investment?
« Reply #584 on: February 09, 2021, 09:26:00 AM »
The crypto- boosters around the office are celebrating Tesla's purchase of Bitcoin.

I think it's a brilliant move to get a number of new "crypto-millionaires" to buy cars from them without having to go through the hassle of converting their Bitcoin into US Dollars, potentially saving them taxes.

I also think it puts the company at risk to be caught short on cash at a time when Bitcoin is down.

tarheeldan

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Re: Is Tesla a good investment?
« Reply #585 on: February 09, 2021, 09:48:28 AM »
Agree on both points,  @talltexan

ChpBstrd

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Re: Is Tesla a good investment?
« Reply #586 on: February 09, 2021, 10:06:42 AM »
If Teslas are the only significant thing one can buy with Bitcoin for the next few years, that might increase sales of Teslas while at the same time slightly reducing the float of Bitcoins.

I wonder if Musk would like to hold a few tens of billions of dollars worth of Bitcoin in the Tesla treasury, because this would reduce circulation, and that would prop up the price of Bitcoin - his own little short squeeze - and would make profits look amazing while it lasts. He would have to rely on raising more dollar funds to pay expenses until employees and vendors are willing to accept Bitcoin - which means dilution.

Of course, if one wants to dilute their Tesla shares to get more Bitcoin exposure, they can just sell Bitcoin and buy Tesla. Certain investors are mesmerized by the trick though.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #587 on: February 09, 2021, 10:26:37 AM »
The crypto- boosters around the office are celebrating Tesla's purchase of Bitcoin.

I think it's a brilliant move to get a number of new "crypto-millionaires" to buy cars from them without having to go through the hassle of converting their Bitcoin into US Dollars, potentially saving them taxes.

I also think it puts the company at risk to be caught short on cash at a time when Bitcoin is down.

Tesla’s stake in BTC represents 7.5% of their “cash” reserve. Based on when Tesla likely bought their BTC position, Tesla is likely up around $500 million currently. I’m neutral on this idea overall, but I don’t see it representing a significant risk to Tesla’s future.
« Last Edit: February 10, 2021, 06:55:21 PM by ColoradoTribe »

MustacheAndaHalf

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Re: Is Tesla a good investment?
« Reply #588 on: February 09, 2021, 10:35:48 AM »
My random guess is less than 3% of Teslas will be bought in Bitcoin, but I'd be happy to have a more data driven estimate.  My estimate would be about $1 billion BTC traded for Teslas per Year.

According to Yahoo Finance, BTC has a market cap of $865 billion.  So even if Tesla gets $8 billion from selling cars and it's own purchases, that's 1% of the market cap.
https://finance.yahoo.com/quote/BTC-USD?p=BTC-USD

But you are right in one way: if Musk tweets he's trying to buy up all Bitcoin in circulation, that tweet would send BTC soaring, regardless of it's truth.  All he had to do is say Tesla is buying and accepting Bitcoin, and the price spiked over 25%!

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #589 on: February 09, 2021, 10:43:45 AM »
https://www.nytimes.com/live/2021/02/08/business/stock-market-today?type=styln-live-updates&label=business%20updates&index=1&action=click&module=Spotlight&pgtype=Homepage#tesla-quality-china
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Chinese regulators met with executives from Tesla recently after several government agencies reported “an unusual acceleration” of complaints from consumers about battery fires and other quality issues with the company’s electric cars.

In a post on the Chinese social media platform WeChat, the State Administration for Market Regulation said officials from five government agencies interviewed Tesla executives and “asked them to strictly abide by Chinese laws and regulations, strengthen internal management, and implement corporate quality and safety regulations.”

Tesla acknowledged its “shortcomings in the business process,” and agreed to improve the quality and safety of its vehicles, the regulator said in the posting.

The electric carmaker has struggled with quality issues as it has scaled its production from tens of thousand cars a year to 500,000 in 2020. On social media, customers have documented numerous problems with new Teslas, including large gaps between body panels, poor paint jobs and chipped glass. Those complaints have been echoed in surveys about and reviews of the company’s cars by J.D. Power and Consumer Reports.

Last week, Tesla recalled 135,000 vehicles in the United States to deal with a problem with touch screens in its Model S and Model Y cars. The screens had been found to have a high rate of failures. Tesla had initially resisted recalling the cars but came under pressure to do so by the National Highway Transportation Safety Administration.

In a letter to the U.S. auto safety regulator last month, a Tesla executive said the screens, which drivers use to control many of the functions of their cars, were not meant to last more than five or six years.

Go to 14:20 mark. Per Consumer Reports, Tesla ranked #1 in customer satisfaction by brand. Tesla Model 3 (#1), Model S (#3), Model Y (#4) and Model X (#10) all ranked in top 10 in customer satisfaction by model.

https://www.youtube.com/watch?v=IGKS0EW2SQY

All car manufacturers have recalls. Tesla recalls have been minor (in quantity and severity) by comparison, have not involved fatalities (see exploding gas tanks and Takata air bags) and many Tesla recalls have been addressed via over-the-air software updates.

Panel gaps and other aesthetic issues have been an ongoing issue that Tesla/Elon have acknowledged, but again these issues are easily fixed/addressed at the point of delivery before taking possession fo the car and overall customer satisfaction (quantifiable) is best in the business. Most Tesla owners would happily buy again. Tesla are also some of the safest cars on the road and consistently get 5-star safety ratings.
« Last Edit: February 09, 2021, 10:46:16 AM by ColoradoTribe »

TomTX

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Re: Is Tesla a good investment?
« Reply #590 on: February 09, 2021, 06:18:49 PM »
I also think it puts the company at risk to be caught short on cash at a time when Bitcoin is down.

Pretty minimal risk.

Last I checked they had ~$19B in cash. The Bitcoin is a single-digit percentage of their cash on hand.

StashingAway

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Re: Is Tesla a good investment?
« Reply #591 on: February 10, 2021, 07:35:04 AM »
I haven't read this whole thread, but I want to chip in a few things to consider. I'm a huge Tesla fan, but with that said I would not buy one. There are too many qc issues and big question marks with the cars. Because of that, I suspect that the stock is overvalued right now.

Issues with the cars for me:

Production QC problems. Now, this has been hammered on many forums and there is expected to be some growing pains with a new production company. I'm not necessarily knocking them for some of the issues, but others raise concern for me. Tesla just announced that they consider an expensive memory chip a "wear item" and thus doesn't qualify for a recall. I don't want a computer based vehicle to have computer based wear items. Replacing a timing belt with a computer chip (that doesn't have a service interval, btw) is a lateral move at best.

But the bigger issues are things like knobs and door handles. Teslas work great in the California climate. They have issues in the cold. If their door handles are frozen shut, their recommended fix is to warm up the car one hour before driving to defrost them. This would be OK if they did it on the roadster or maybe model S, but they are still doing bogus things like this in their current vehicles.

And speaking of door handles, every single vehicle they make has a different handle. That's not a good move for a company trying to scale decent quality vehicles. It's basically the opposite of a Toyota move, and more of an exotic car move. I don't trust that they'll keep the stock or knowledge base to fix these handles in 10 years. If it's any kind of clue as to how they are designing the rest of the vehicle, I don't trust them.

Other issues:
For the price, there are other options that meet my needs better. The Rav4 prime has Toyota quality and for all intents and purposes is a more refined model Y. Maybe it doesn't have the 0-60 times, but the doors can open in the cold. And it will be more reliable and more capable as and SUV. Plus it can do in town trips on full battery charge. Oh and Toyota has sold every single one of these made too. Or perhaps I like the 7 passenger aspect. Well, there's a Plug in Hybrid Chrysler Pacifica that is pretty sharp. Sure, it's a Chrysler, but I would trust the build quality of it over a Tesla.

Tesla pushed all of these cars into this space. I think they obviously have the best electric cars on the market. But I suspect that it will be easier for companies like GM and Toyota to move into this space than it will for Tesla to prove out their production capabilities. That's a suspicion; Tesla does have a head start, but I think that it's easy to underestimate how quickly a company can change if they put their whole weight behind a transition. For instance, BattleBorn used to be the only reasonably priced Lithium battery in the retail market. They have a 5 year head start, and still make arguably the best product. But there is now heavy competition that makes them on in a sea of options. The folks who are optimistic about Tesla should apply that optimism to Ford or Nissan too.

Self driving: To paraphrase. 95% self driving is easy to do. It's the 5% at the end that's really hard. So if we see a company with a 90% self driving car, they might still only be 1/4 of the way to a fully self driving car. I'll believe it when I see it. Until then, it's basically just lane assist.

Can you explain how Tesla Insurance increases value to the company? They're not an insurance company. Making a move like this makes sense temporarily to correct for market analysis issues but long term? I would hope that their goal is to get out of insurance industry. But perhaps I'm missing something.

RobertFromTX

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Re: Is Tesla a good investment?
« Reply #592 on: February 10, 2021, 10:17:50 AM »
I wouldn't be surprised if Tesla has already unloaded a good amount of their bitcoin position now that it's public. Just juice the earnings for the year from Elon's twitter pump.

TomTX

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Re: Is Tesla a good investment?
« Reply #593 on: February 10, 2021, 06:46:52 PM »
Production QC problems. Now, this has been hammered on many forums and there is expected to be some growing pains with a new production company. I'm not necessarily knocking them for some of the issues, but others raise concern for me. Tesla just announced that they consider an expensive memory chip a "wear item" and thus doesn't qualify for a recall. I don't want a computer based vehicle to have computer based wear items. Replacing a timing belt with a computer chip (that doesn't have a service interval, btw) is a lateral move at best.

You fail to note they were already replacing the problem item for free for many people for months prior, and agreed to perform the recall for all users. It's extremely common for car manufacturers to declare themselves not at fault for a recall and perform the recall anyway.

Quote
For the price, there are other options that meet my needs better. The Rav4 prime has Toyota quality and for all intents and purposes is a more refined model Y.

Good luck finding one. Toyota shipped all of 4k of them to the USA in all of 2020.

StashingAway

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Re: Is Tesla a good investment?
« Reply #594 on: February 10, 2021, 07:03:54 PM »

Quote
For the price, there are other options that meet my needs better. The Rav4 prime has Toyota quality and for all intents and purposes is a more refined model Y.

Good luck finding one. Toyota shipped all of 4k of them to the USA in all of 2020.

Right, but previously in the thread we used the fact that vehicles are sold out as a good metric. I am saying this a bit tongue in cheek. So Toyota wins; they sold out before the products hit the shores!

Elon Musk has also gone on the record a few times insulting the Toyota production line. Toyota has been the gold standard of industry production in general (not just in automotive). Entire classes are taught about their quality control and just in time manufacturing. I'm not sure if the comments are trolling or just completely out of touch with how insanely competitive the automotive production industry is. There is an assumption that companies like Mercedes are just twiddling their thumbs, not trying to improve. They might not be improving in EV's, but you can darn well be sure that their doors drain water properly. 

This is all constructive criticism, mind you. I want them to do good!

BTW, prediction that the cybertruck doesn't look anything like the prototype. Reason: it won't meet pedestrian and crash requirements and they will have to change the structure of the vehicle. I hope I'm wrong on this too. If it looks reasonably close to the prototype I might still buy one despite it being anti-mustachian. So I'm not anti-Tesla, I just think they are in for a reality check once the early adopter phase ends.

talltexan

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Re: Is Tesla a good investment?
« Reply #595 on: February 11, 2021, 06:53:41 AM »
My random guess is less than 3% of Teslas will be bought in Bitcoin, but I'd be happy to have a more data driven estimate.  My estimate would be about $1 billion BTC traded for Teslas per Year.

According to Yahoo Finance, BTC has a market cap of $865 billion.  So even if Tesla gets $8 billion from selling cars and it's own purchases, that's 1% of the market cap.
https://finance.yahoo.com/quote/BTC-USD?p=BTC-USD

But you are right in one way: if Musk tweets he's trying to buy up all Bitcoin in circulation, that tweet would send BTC soaring, regardless of it's truth.  All he had to do is say Tesla is buying and accepting Bitcoin, and the price spiked over 25%!

Musk's tweets about $TSLA stock...could lead to possible criminal exposure for Musk.

Musk's tweets about Bitcoin...no path to criminal exposure?

theoverlook

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Re: Is Tesla a good investment?
« Reply #596 on: February 11, 2021, 08:03:07 AM »

And speaking of door handles, every single vehicle they make has a different handle. That's not a good move for a company trying to scale decent quality vehicles. It's basically the opposite of a Toyota move, and more of an exotic car move. I don't trust that they'll keep the stock or knowledge base to fix these handles in 10 years. If it's any kind of clue as to how they are designing the rest of the vehicle, I don't trust them.


I doubt there's a single Toyota model that shares door handles with a different Toyota model. Maybe back in the 70s, or maybe between trim levels of the same vehicle, but say a modern Camry vs Corolla vs Rav4? No way. That's one of the simplest things to change and makes an enormous difference in the appearance of the vehicle.

mistymoney

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Re: Is Tesla a good investment?
« Reply #597 on: February 11, 2021, 08:42:24 AM »
https://www.cnn.com/2021/02/11/investing/elon-musk-pay-wealth-tesla-stock-options/index.html

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[Musk] received four grants to buy 8.4 million Tesla shares in 2020. After paying the exercise price, those blocks of stock options were each worth $6.2 billion at Wednesday's closing price. The combined $24.8 billion value of those options alone is more than Musk was worth a year ago when Forbes calculated its billionaire's list, when he was ranked as the world's 31st richest person.
2021 and 2022 could be nearly as lucrative for him.
The company's annual financial filing this week disclosed that Musk will probably receive three additional options grants this year, each as large and as lucrative as those he received in 2020.

At current values, those three options tranches would be worth $18.6 billion.
Analysts are now forecasting that Tesla's 2022 financial results will likewise reach heights that would bring Musk three additional blocks of options. Tesla could hit one of those profit targets in 2021, which would mean Musk could match the four tranches of options he received last year.
Few investors are complaining about Musk's pay.
The stock's 743% rise in 2020 made it the stock market's biggest winner, as well as one of the most valuable companies in the world. That has quieted most of the criticism he might have faced.
"The cachet of Tesla is Musk," said Daniel Ives, tech analyst for Wedbush Securities. "The reason investors have not batted an eyelash is that due to Musk's strategic direction, Tesla is on top of the EV [electric vehicles] mountain going to the golden age of EVs. And he's put Tesla on the cusp of being a trillion-dollar market cap company."
The rise in Tesla's stock price, and his options to buy new shares, has made Musk the richest person on the planet, according to Bloomberg, surpassing Amazon (AMZN) founder Jeff Bezos.

https://www.teslarati.com/tesla-vanguard-group-stock-purchase-6-1-percent/
Quote

Vanguard Group Inc, after a Form 13G filing with the Securities and Exchange Commission shows the firm purchased 57,814,310 shares of the automaker’s common stock. This makes Vanguard a 6.1% shareholder of the company, trailing only Elon Musk and another institutional investor in terms of holdings.

Vanguard filed the 13G filing with the SEC on February 10th with immediate effect. A document that discloses Vanguard’s purchase certifies the investment firm’s large-scale investment, making it the second-largest institutional shareholder of Tesla stock behind Susquehanna Securities, which owns 60.7 million shares, representing 6.5% of total ownership.


we are all tesla investors now, musk will rule the world as richest dude, let's all clasp hands and sing kumbaya, and then drive off into the sunset in our new and shiny electric vehicles.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #598 on: February 11, 2021, 10:14:52 AM »
Can you explain how Tesla Insurance increases value to the company? They're not an insurance company. Making a move like this makes sense temporarily to correct for market analysis issues but long term? I would hope that their goal is to get out of insurance industry. But perhaps I'm missing something.

Tesla FSD is way more than lane assist. You are correct that solving the edge cases is a huge part of the undertaking, but have you watched recent video’s of Tesla’s FSD beta in real world situations. I’ve witnessed cars on autopilot, swerve to miss a car backing out of driveway, going on to the shoulder, without driver intervention. In another scenario, an Amazon truck was parked on the shoulder, taking up half of the Tesla’s lane. Another car traveling in the opposite direction arrived at the parked Amazon delivery van at the same time. At this exact moment the Amazon delivery driver blindly hopped put of the driver side door into the Tesla’s lane of traffic. The oncoming car did not stop or react to the situation. Without human intervention, the Tesla vehicle instantaneously registered the human presence and applied the break avoiding a serious injury or death to the Amazon driver. I’d say less than half of human drivers would have responded correctly and in time in that exact situation.

So, how does Tesla make money on insurance? Simple, if Tesla vehicles, operating on autopilot reduce accidents by 50-90% then insurance rates go down. Since Tesla vehicles log all miles driven by Tesla vehicles, Tesla Insurance can tailor rates based on human driving behavior (i.e., rapid acceleration, hard breaking, etc.). Lastly, each Tesla vehicle has 8 external cameras. Any accident will have video evidence of who was at fault. This will greatly reduce the number of no fault, hit and run, and vandalism payouts by Tesla Insurance. Again, reducing rates for customers and profitability for Tesla Insurance.

ColoradoTribe

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Re: Is Tesla a good investment?
« Reply #599 on: February 11, 2021, 10:25:04 AM »

Tesla pushed all of these cars into this space. I think they obviously have the best electric cars on the market. But I suspect that it will be easier for companies like GM and Toyota to move into this space than it will for Tesla to prove out their production capabilities. That's a suspicion; Tesla does have a head start, but I think that it's easy to underestimate how quickly a company can change if they put their whole weight behind a transition. For instance, BattleBorn used to be the only reasonably priced Lithium battery in the retail market. They have a 5 year head start, and still make arguably the best product. But there is now heavy competition that makes them on in a sea of options. The folks who are optimistic about Tesla should apply that optimism to Ford or Nissan too.


Exactly, that’s why I’m sitting here reading this thread on my Blackberry smartphone, watching movies on Blockbuster on demand streaming, taking pictures with my Kodak digital camera, and ordering packages online from K-Mart. Incumbents are notorious for having blind spots when it comes to disruption. Corporate culture and knowledge base is very hard to change. Sacrificing short-term profit for long-term transformation even harder. Some of the automotive incumbents will inevitably survive (Ford, VW, BMW, Toyota), but many will not (GM, FIAT/Chrysler). I won’t list out all the reasons why again, you can dig back through my posts on this thread if you care to. Suffice it to say, people have been saying the challengers will easily catch-up to Tesla for years, and the gap has only grown.
« Last Edit: February 11, 2021, 01:35:23 PM by ColoradoTribe »