Author Topic: Elon Musk is a nice chap  (Read 141659 times)

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Offline nctnico

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Re: Elon Musk is delusional
« Reply #125 on: May 14, 2021, 08:15:44 am »
My favorite now, is when he bought a billion dollar Bitcoin, just to realize that a single transfer costs  910 KWh energy (not a typo) and to realize thats not very green. So he dropped a tweet, and all the sheep that are hanging by every words of Jobs and Musks and other Techno-Jesus (that never had to do real engineering in their entire life)  started selling like crazy, market cap dropped by about 150 Billion dollars.
Musk should have realised that before! One of the reasons I'm against cryptocurrencies is the awfull amount of energy it consumes. With 910kWh ( :wtf: ) of electricity you can run 3 decent sized (energy efficient) fridges for a year.
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Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #126 on: May 14, 2021, 09:19:59 am »
On the Tesla Bitcoin situation with newer info and analysis. 0:32 to 10:44

Allegedly there have been changes in circumstances/info since their Bitcoin investment. Also analysis pointing against the speculation Tesla will make efforts to make Bitcoin more "green" by integrating it into solar products. "Telsa's market cap is half a trillion dollars so 2 billion dollars is 0.4% of that. This is not something consequential to Tesla's future at this point in time" I guess $2B is chump change when you've got a $500B market cap. Some info I wanted to share but I'm going to try keep out of any more discussions.
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Offline EEVblog

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Re: Elon Musk is delusional
« Reply #127 on: May 14, 2021, 11:51:45 am »
"Telsa's market cap is half a trillion dollars so 2 billion dollars is 0.4% of that. This is not something consequential to Tesla's future at this point in time" I guess $2B is chump change when you've got a $500B market cap.

You can't pay wages and build cars with market cap
 

Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #128 on: May 14, 2021, 12:35:17 pm »
"Telsa's market cap is half a trillion dollars so 2 billion dollars is 0.4% of that. This is not something consequential to Tesla's future at this point in time" I guess $2B is chump change when you've got a $500B market cap.

You can't pay wages and build cars with market cap
You can raise cash capital by sale of shares to pay wages and build cars and build factories with market cap pretty easily though???? Not sure what your understanding of a company with publicly traded shares is and how capital raising for IPO'd companies works. Where do you think their got their $17.1B in cash equivalents at the end of Q1 2021? Where do you think they got the cash for buying $1.5B in bitcoin?? In the last yearish they raised ~$12B in capital by common shares sales.
[$17.1B in cash equivalents Q1 2021] https://www.financialexpress.com/investing-abroad/featured-stories/tesla-q1-earnings-2021-company-posts-net-income-of-438-million-revenue-up-by-74/2240856
[Latest $5B raise and links to other raises in the previous year] https://www.bloomberg.com/news/articles/2020-12-08/tesla-raising-up-to-5-billion-in-third-capital-raise-this-year
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Offline tszaboo

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Re: Elon Musk is delusional
« Reply #129 on: May 14, 2021, 12:36:45 pm »
My favorite now, is when he bought a billion dollar Bitcoin, just to realize that a single transfer costs  910 KWh energy (not a typo) and to realize thats not very green. So he dropped a tweet, and all the sheep that are hanging by every words of Jobs and Musks and other Techno-Jesus (that never had to do real engineering in their entire life)  started selling like crazy, market cap dropped by about 150 Billion dollars.
Musk should have realised that before! One of the reasons I'm against cryptocurrencies is the awfull amount of energy it consumes. With 910kWh ( :wtf: ) of electricity you can run 3 decent sized (energy efficient) fridges for a year.
It is getting ridiculous at this point. On a normal day, one payment is 20 USD, on busy days a lot more. ETH was supposed to solve this by being more scalable. Now because of that, we cannot buy video cards anymore. Someone posted an image where an ETH transaction was 400 USD on a busy day. Yes, that is the cost of transferring money. There are networks that work at a fraction of the cost lightning speed compared to these.
The new NFTs that they make on the ETH network could be as much as 8 MWh of energy to create.

Its just absurd. The sooner these outdated networks go down the better.

"Telsa's market cap is half a trillion dollars so 2 billion dollars is 0.4% of that. This is not something consequential to Tesla's future at this point in time" I guess $2B is chump change when you've got a $500B market cap.

You can't pay wages and build cars with market cap
Exactly. Market cap is a strange metric, I dont know why people keep using these metrics out of context.
If you have a company, where only 1% of the stocks are ever for sale (rest is locked up to drive up the price), and someone makes the last trade at 100K USD for 0.0001% of the company, the company is worth 1 billion dollar, right? No, just try dumpling 1% of the locked up shares on the stock market, and see where that market cap disappears. For these measures to work, one has to assume a rational market. Its not. Look at P/E that is harder to manipulate.
 

Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #130 on: May 14, 2021, 12:45:50 pm »
Basic video on how raising capital through issuing shares works

Article form of same topic: https://www.investopedia.com/terms/s/secondaryoffering.asp

Some analysis of Tesla's capital raise


"Telsa's market cap is half a trillion dollars so 2 billion dollars is 0.4% of that. This is not something consequential to Tesla's future at this point in time" I guess $2B is chump change when you've got a $500B market cap.

You can't pay wages and build cars with market cap
Exactly. Market cap is a strange metric, I dont know why people keep using these metrics out of context.
If you have a company, where only 1% of the stocks are ever for sale (rest is locked up to drive up the price), and someone makes the last trade at 100K USD for 0.0001% of the company, the company is worth 1 billion dollar, right? No, just try dumpling 1% of the locked up shares on the stock market, and see where that market cap disappears. For these measures to work, one has to assume a rational market. Its not. Look at P/E that is harder to manipulate.
You clearly have no idea how actual market cap calculation and capital raising works in the real world if that's the example you give for market cap being a poor metric. Market capitalisation is THE metric for determining dilution from secondary offerings.

Edit: Maybe do some basic reading
https://www.investopedia.com/investing/market-capitalization-defined/
https://www.investopedia.com/terms/p/price-earningsratio.asp
P/E is a metric used to determine if a company is overvalued or not. It has little to do with whether or not a company is capable of raising money through secondary offerings. If a company's P/E is too high however (i.e. overvalued) that's probably a sign if anything that the company is in a good place to sell some shares and make good on their overvalued shares.

Edit2: Also worth pointing out if you're looking at PE for a company that has recently started generating profit then P/E ratio gets messed up and overly high while the profits take some time to catch up to the share price. Compare PE history of Tesla to PE history of Shopify or PE history of Square or any other IPO'd company transitioning from growth to revenue.

[deleted unnecessary snipe]
« Last Edit: May 14, 2021, 01:24:58 pm by sandalcandal »
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Offline tszaboo

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Re: Elon Musk is delusional
« Reply #131 on: May 14, 2021, 01:06:20 pm »
I feel there might be some financial illiteracy here  :palm: It's like watching flat earthers use "science" to prove the earth is flat. Using words you don't know to justify things you don't understand.
I'm just gonna add you to my ignore list, since I really dont have time to explain why you are wrong. I'm sure someone else will. Thanks for the talk.
 

Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #132 on: May 14, 2021, 01:11:22 pm »
I feel there might be some financial illiteracy here  :palm: It's like watching flat earthers use "science" to prove the earth is flat. Using words you don't know to justify things you don't understand.
I'm just gonna add you to my ignore list, since I really dont have time to explain why you are wrong. I'm sure someone else will. Thanks for the talk.
Well I've probably gone too far on the provocative analogies, my aim is to draw extreme comparisons to prompt introspection but if the response is to block their ears instead then that's counter productive. Hopefully others will actually read the explanations provided and attempt an understanding.

Am I really alone here in my understanding of financial markets?
Edit: This article shines a bit of light on the different financial and share situations of Tesla compared to legacy auto and Tesla's ability to do this kind of capital raise which is common for growth startups and tech companies but not traditional automakers apparently https://www.businessinsider.com.au/teslas-5-billion-capital-raisewill-drive-the-auto-industry-crazy-2020-9?r=US&IR=T
Dave and tszaboo are trying to apply high level assumptions which only apply to trade of long established companies and are incorrect to assume for growth companies.
« Last Edit: May 14, 2021, 03:21:29 pm by sandalcandal »
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Offline CatalinaWOW

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Re: Elon Musk is delusional
« Reply #133 on: May 14, 2021, 03:19:46 pm »
I agree.  Market cap is a metric of limited value.  It is probably reported so heavily because it is simple and generates spectacular numbers.
 

Online fourfathom

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Re: Elon Musk is delusional
« Reply #134 on: May 14, 2021, 03:48:51 pm »
I agree.  Market cap is a metric of limited value.  It is probably reported so heavily because it is simple and generates spectacular numbers.

It's of great value to companies selling stock, and one of the key factors for people evaluating the viability of a start-up.  P/E is useless in the early stages.
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Offline bdunham7

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Re: Elon Musk is delusional
« Reply #135 on: May 14, 2021, 04:01:49 pm »
Am I really alone here in my understanding of financial markets?
Dave and tszaboo are trying to apply high level assumptions which only apply to trade of long established companies and are incorrect to assume for growth companies.

If you actually understand the current financial markets, then yes you are alone--and you should be able to become fabulously wealthy in short order.  However, if you just think you do, then you are just another of the delusional fools that thinks they have a handle on what to the more experienced is an increasingly inexplicable anomaly.  I have a pretty good understanding of how the financial markets operate and how VC works, but I have no predictions or comprehensive explanations for the current situation--just the occasional observation. My main worry is that the longer the current situation persists the worse it will turn out in the end.

The current ability of many companies--not just Tesla--to raise capital and/or debt despite facing serious financial problems, is quite unusual.  This environment, combined with Tesla's growth narrative and Elon Musk's Jobs-like reality warping abilities did allow a company that has been publicly traded for a decade to raise a huge amount of capital, more than they have ever made in profits.  I actually predicted that they would do this right before Elon was asked about it in an earnings call and denied that they were going to do it.  Soon after that, as I predicted, they changed their minds and took the easy money.  Yes, the sky-high stock price and the resulting market cap greatly reduced the effect of dilution,  but I don't think that necessarily was the reason it didn't tank the stock price.

The best quote I've seen lately is a former Fed exec (I think) that said that to understand the current market, we need to consult psychologists, not economists.
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Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #136 on: May 14, 2021, 04:43:17 pm »
Am I really alone here in my understanding of financial markets?
Dave and tszaboo are trying to apply high level assumptions which only apply to trade of long established companies and are incorrect to assume for growth companies.

If you actually understand the current financial markets, then yes you are alone--and you should be able to become fabulously wealthy in short order.  However, if you just think you do, then you are just another of the delusional fools that thinks they have a handle on what to the more experienced is an increasingly inexplicable anomaly.  I have a pretty good understanding of how the financial markets operate and how VC works, but I have no predictions or comprehensive explanations for the current situation--just the occasional observation. My main worry is that the longer the current situation persists the worse it will turn out in the end.

The current ability of many companies--not just Tesla--to raise capital and/or debt despite facing serious financial problems, is quite unusual.  This environment, combined with Tesla's growth narrative and Elon Musk's Jobs-like reality warping abilities did allow a company that has been publicly traded for a decade to raise a huge amount of capital, more than they have ever made in profits.  I actually predicted that they would do this right before Elon was asked about it in an earnings call and denied that they were going to do it.  Soon after that, as I predicted, they changed their minds and took the easy money.  Yes, the sky-high stock price and the resulting market cap greatly reduced the effect of dilution,  but I don't think that necessarily was the reason it didn't tank the stock price.

The best quote I've seen lately is a former Fed exec (I think) that said that to understand the current market, we need to consult psychologists, not economists.
What's so abnormal and incomprehensible about a high demand company with a high market share selling shares to raise capital? Yeah it was high beyond logical reason but how does the ability to capitalise on high market cap make no sense? They've literally already done it. Dave and Tszaboo were saying doing such a thing is impossible but it literally already happened??

Edit: Let me be clear, Tesla's market cap/share price is beyond logical reason. What's not beyond reason is the ability for Tesla to use that excessively high market cap to obtain cash. That's just issuing shares and selling to the market. There's nothing strange or implausible about a company issuing and selling shares.

Edit 2: A company doing a capital raise by issuing shares then market cap/share price increasing or staying the same happens all the time and it has nothing to do with unreasonable market behaviour. Private companies do it all the time without any involvement from irrational retail investors or the public markets general (because they are private and not on the stock exchange) but in that case it's called a valuation not a market cap and is provided by VCs or other investors.  Being on a public stock exchange doesn't change the fundamental process or the rationality in issuing shares to raise capital. If an established company with zero need for capital to grow operations does a secondary offering then yeah it'd tank the price because there is so sane reason management in for example Toyota should want to do that since they've already hit their steady state serviceable obtainable market long ago.
« Last Edit: May 14, 2021, 05:34:49 pm by sandalcandal »
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Offline bdunham7

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Re: Elon Musk is delusional
« Reply #137 on: May 14, 2021, 05:34:44 pm »
What's so abnormal and incomprehensible about a high demand company with a high market share selling shares to raise capital?

I didn't say it was incomprehensible, in fact I said that I predicted it and given the situation, I agree that it was the logical thing to do from Musk's perspective. 

It is abnormal because it doesn't usually work this way. Shareholders don't normally tolerate dilution very well and most established going concerns will issue debt rather than new stock.  These are extraordinary times and Tesla is not the only beneficiary--other companies have also made additional offerings in situations that would have been unthinkable until now.  Tesla's capital raise was huge compared to their assets, but the ludicrous stock price and resultant market cap seems to have obscured that and more importantly, greatly reduced the dilutive effect. 
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Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #138 on: May 14, 2021, 05:44:00 pm »
What's so abnormal and incomprehensible about a high demand company with a high market share selling shares to raise capital?

I didn't say it was incomprehensible, in fact I said that I predicted it and given the situation, I agree that it was the logical thing to do from Musk's perspective. 

It is abnormal because it doesn't usually work this way. Shareholders don't normally tolerate dilution very well and most established going concerns will issue debt rather than new stock.  These are extraordinary times and Tesla is not the only beneficiary--other companies have also made additional offerings in situations that would have been unthinkable until now.  Tesla's capital raise was huge compared to their assets, but the ludicrous stock price and resultant market cap seems to have obscured that and more importantly, greatly reduced the dilutive effect.

High growth companies (particularly startups but hard to call Tesla a startup anymore) do capital raises well in excess of their assets all the time. They don't do capital raises comparable to their assets, because they don't have any assets, they're new! They aren't a steady state company. No new company is going doing capital raises comparable to their assets because they'd never grow fast enough and get out competed by ventures that do big raises (particularly the case in tech/software/platforms); common sense ever since the dot com era. Let's be honest, it does get out of hand but this is what happens and if you don't realise this is what happens then we're living on different planets (financial markets).

Again, the only time shareholders don't tolerate dilution is when there's no good reason (from the perception of the share holders) to be trying to raise capital without debt. Again, that's reasonable in the context of old steady state companies. Share holders being upset with company growth plans would never be the case with Tesla due to their immense product demand, sales growth and supply constraints. It's not some delusional fantasy, it's plain obvious.

Edit: Even more the dilution from the Tesla raises was tiny! In the order of <2% of market cap each time.
« Last Edit: May 14, 2021, 06:00:00 pm by sandalcandal »
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Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #139 on: May 14, 2021, 06:19:18 pm »
Exactly. Market cap is a strange metric, I dont know why people keep using these metrics out of context.
If you have a company, where only 1% of the stocks are ever for sale (rest is locked up to drive up the price), and someone makes the last trade at 100K USD for 0.0001% of the company, the company is worth 1 billion dollar, right? No, just try dumpling 1% of the locked up shares on the stock market, and see where that market cap disappears. For these measures to work, one has to assume a rational market. Its not. Look at P/E that is harder to manipulate.
Dave's notion that Market CapAccess to Cash was incorrect. But what's utterly f*ing ridiculous is tszaboo's hypothetical example of a company with artificially restricted 1% float and trading volume in the order of 0.0001% volume doing a 1% issuance (presumably all at once). Yeah that'd probably tank share values but how is that even remotely realistic let alone relevant to a company like Tesla that has an 80% float and has volume (daily trade) in the order of 3% outstanding shares doing <2% dilutions over the course of weeks? Honestly what kind of deluded mental gymnastics do you need to think that utterly stupid example is sensible and proves market cap is not relevant.

Sorry I think I need to cool off a bit. I shouldn't have gotten sucked back in so easily.
« Last Edit: May 14, 2021, 09:13:56 pm by sandalcandal »
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Offline bdunham7

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Re: Elon Musk is delusional
« Reply #140 on: May 14, 2021, 06:21:22 pm »
High growth companies do capital raises well in excess of their assets all the time. They don't do capital raises comparable to their assets, because they don't have any assets, they're new!

Sure, in the pre-IPO VC funding phases.   A company that needs additional capital a decade or more after their IPO is typically struggling and won't have a high share price.  Show me an example of a company a decade or more past IPO with a significant (say 1B+) market cap that has done this without the share price cratering--or already being cratered.  This is mostly a sign of the times, IMO, but Musk's ability to sell the growth story is another aspect that I think is problematic.  Scaling up isn't the answer to everything and once you reach a certain size and still aren't profitable--or profitable enough--then growth simply diverts attention from the fundamentals for a while.   And that's been working for them so far.
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Offline james_s

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Re: Elon Musk is delusional
« Reply #141 on: May 14, 2021, 06:49:38 pm »
Err, they filled a niche just like the Tesla did.
100km of range was enough for plenty of daily usage scenarios.
Telsa didn't have the range because it was better engineered or had magical new technology, it simply cost a crap load more because it has a ton more batteries and was designed for a different market. Tesla's were and still are firming in the luxury car catgeory, screw the cost. Even the Model 3 barely scraps in under the Australian luxury car tax threshold.

What Tesla did was challenge the whole perception of electric cars, and they succeeded IMO. I've driven a few different EVs over the years, an early one was a Meyers NMG which was a funny little thing resembling a 3 wheeled rollerskate, it was highway capable but just barely, the performance was lackluster and the range lacking. Later I drove a Nissan Leaf, it was a substantial step up, felt just like a normal car, the performance was ok and perfectly adequate for commuting but nothing anyone would mistake for a sports car and again the range while ok for commuting was not great. Then a Kia Soul EV, similar story, a bit more range than the Leaf but still not particularly fun to drive. The Chevy Spark EV was the first one that made me say "whoa, this is pretty cool", it's a tiny little car but *really* perky, it feels quite sporty and is fun to drive.

Tesla though is in a whole different class, these things are mind blowingly powerful, even the models not optimized for performance would leave a lot of true sports cars in the dust. They have good range too, much better than other pure EVs on the market, yes they're relatively expensive but nobody else was offering long range versions of their EVs at any price. Why does this matter? Because EVs had a reputation for being slow, under powered short ranged toys and somebody needed to break this perception by releasing something that is so far in the other direction that it completely shatters the stereotype. It's much the same reason that back in the 80s and 90s Volvo, which had long had a reputation for making safe and practical but slow and boring family cars that could barely get out of their own way started doing things like putting powerful turbocharged engines into station wagons culminating with the nearly 300 hp T5R. Does anyone really need a 300 hp engine in a family car? Probably not, but it was a lot of fun, and it broke them out of that mold of sluggish practical cars for old people. Not everybody needs what Tesla offers, but they have broken the mold, and changed the perception of EVs as a whole. Nobody can make a blanket statement that EVs are slow and underpowered when some of the most powerful cars you can buy are EVs, and nobody can make a blanket statement that EVs lack range, when there are models available now with a range comparable to a typical ICE powered car. Nobody can say that EVs cannot be recharged quickly now because Tesla has a network of rapid chargers that can give you a substantial amount of charge in the time it takes for a potty break and a stroll to stretch your legs. Not every EV offers these things and not everyone needs these things, but they're available now for those who list any of those things as reasons an EV wouldn't work for them.
 
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Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #142 on: May 14, 2021, 07:19:20 pm »
High growth companies do capital raises well in excess of their assets all the time. They don't do capital raises comparable to their assets, because they don't have any assets, they're new!

Sure, in the pre-IPO VC funding phases.   A company that needs additional capital a decade or more after their IPO is typically struggling and won't have a high share price.  Show me an example of a company a decade or more past IPO with a significant (say 1B+) market cap that has done this without the share price cratering--or already being cratered.  This is mostly a sign of the times, IMO, but Musk's ability to sell the growth story is another aspect that I think is problematic.  Scaling up isn't the answer to everything and once you reach a certain size and still aren't profitable--or profitable enough--then growth simply diverts attention from the fundamentals for a while.   And that's been working for them so far.
A decade+ after IPO's company needing significant capital is a rare and usually because the company hit a rough patch (so obviously it's headed down already) not because it needs money for a growth strategy but when it is for growth you do see a stability if not an uptick rather than "cratering".
1. $AU60M equity raise, Australian Finance Group, $AU708M MCAP, May 2020 https://themarketherald.com.au/australian-finance-group-asxafg-announces-60m-equity-raise-to-support-growth-2020-05-14/
2. $AU300M equity raise, Cromwell Property Group, $AU2.28B MCAP, Nov 2018 https://realassets.ipe.com/news/cromwell-property-seeks-up-to-aud300m-equity-raise-to-fund-growth/10028312.article
3. £150M equity raise, SIG plc, £600M MCAP, May 2020 https://www.insidermedia.com/news/yorkshire/sig-sets-out-plans-for-150m-equity-raise
4. $AU218.7M equity raise, Paladin Energy, $AU1.264B MCAP, March 2021 https://themarketherald.com.au/paladin-energy-asxpdn-looks-to-pocket-218-7m-for-capital-restructure-2021-03-17/
So there's 4 companies and much greater dilutions than Tesla. Honestly just search news for equity raise growth and all the results even the >10yr IPO ones all go up after the news is published.

"Tech" companies like Tesla get much bigger helpings but most aren't above your 10yr minimum
$500M equity raise from Uber, Oct 2020 https://investor.uber.com/news-events/news/press-release-details/2020/Uber-Freight-Raises-500-Million-in-Funding-From-Greenbriar-Equity-Group-to-Transform-Logistics/default.aspx
$1.55B equity raise from Shopify, Feb 2021 https://obj.ca/article/techopia/shopify-raise-us155b-latest-share-offering
$1.5B secondary offering from Zoom, Jan 2021 https://www.cnbc.com/2021/01/12/zoom-plans-1point5-billion-share-sale-at-10-times-its-ipo-price.html

Edit for readability. Also looking at everyone's shares plummeting in March 2020 due to COVID start sure is scary.
Also no BS about Tesla profitability please. They've already had a full year of consecutive quarterly profits despite heavy growth expenditure ($3.24B capex 2020).


Also at least talking with bdunham7 I can start to see the trail of logic leading to the contrary view. So thanks bdunham7  :-+
« Last Edit: May 14, 2021, 09:14:27 pm by sandalcandal »
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Offline EEVblog

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Re: Elon Musk is delusional
« Reply #143 on: May 15, 2021, 05:42:11 am »
Err, they filled a niche just like the Tesla did.
100km of range was enough for plenty of daily usage scenarios.
Telsa didn't have the range because it was better engineered or had magical new technology, it simply cost a crap load more because it has a ton more batteries and was designed for a different market. Tesla's were and still are firming in the luxury car catgeory, screw the cost. Even the Model 3 barely scraps in under the Australian luxury car tax threshold.

What Tesla did was challenge the whole perception of electric cars, and they succeeded IMO.

Barely.
They had to beg existing signed up owners to pay more to keep them afloat so they could deliver.
They were like a week or something away from going bust, just like SpaceX. Both companies ultimately survivded to florish, but it was touch and go.

Quote
They have good range too, much better than other pure EVs on the market, yes they're relatively expensive but nobody else was offering long range versions of their EVs at any price. Why does this matter? Because EVs had a reputation for being slow, under powered short ranged toys and somebody needed to break this perception by releasing something that is so far in the other direction that it completely shatters the stereotype.

Yes, that was ultimately a winning formula for them.

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Nobody can make a blanket statement that EVs are slow and underpowered

That's ultimately not what held EV's back though. It was making them look and feel like a normal car, and givign them a usable range.
Again, the LEAF was quite successful because of those reasons. Range and performance was adequate enough, and it felt and drove like a normal car pretty much.

It's no surprise that both ends of the market have been successful.
Tesla with their high priced, high performance, long range and flashy status symbol.
And Nissan and others with more affordable cars good enough for everyday use.
Make no mistake, the Nissan LEAF and others would still be sucessful is Tesla had failed, it was simply time for the EV revolution.
 

Offline james_s

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Re: Elon Musk is delusional
« Reply #144 on: May 15, 2021, 06:03:30 am »
Barely.
They had to beg existing signed up owners to pay more to keep them afloat so they could deliver.
They were like a week or something away from going bust, just like SpaceX. Both companies ultimately survivded to florish, but it was touch and go.

As somebody else said, virtually all startups have that moment of truth, most of them crash and burn, I was at a startup that failed back around 2004 so I have some experience with that. A few squeak by and achieve success, that's just the nature of the game. I would argue that starting a car company, at least in the West where the industry is absolutely dominated by a handful of major well established players and stifling regulations that make it extremely difficult to innovate and lead to staggering expenses and endless red tape is an exceptionally difficult endeavor. Much harder than creating a consumer gadget, web service or software product or some other product or service. I wish there were more new and innovative car companies popping up because virtually the entire automotive industry has become very boring, an endless sea of the most incredibly bland nearly identical cookie cutter crossover SUVs but Tesla is the only one I can think of that has achieved anything resembling mainstream success in my lifetime. I'm not a fanboy, I can find plenty to criticize both the cars and the company for, but I can't help being extremely impressed that they succeeded and I very much welcome something that is at least a little bit different.
 
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Offline nctnico

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Re: Elon Musk is delusional
« Reply #145 on: May 15, 2021, 07:37:42 am »
Also no BS about Tesla profitability please. They've already had a full year of consecutive quarterly profits despite heavy growth expenditure ($3.24B capex 2020).
People keep saying Tesla doesn't need the $1 billion from selling CO2 emission rights but I have a hard time believing that. Sure if it made a difference between having a $4 billion profit versus a $5 billion profit. But that is not the case. The extra $1 billion allows to create a bit of profit. In Tesla's case a large part of the money is spend on R&D and expansion. Not being able to spend $1 billion is a huge chunk of cash and can be the difference between thriving or surviving. Especially for a company still in the expansion phase.

I wish there were more new and innovative car companies popping up because virtually the entire automotive industry has become very boring, an endless sea of the most incredibly bland nearly identical cookie cutter crossover SUVs
Cars look the same because in the end there is only one shape with minimal air friction. For BEVs you see a move towards the typical fish-face shape. Just look at Tesla's model 3 and VW ID.3 for example. In a couple of years all BEVs will look the same.
« Last Edit: May 15, 2021, 11:12:58 am by nctnico »
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #146 on: May 15, 2021, 11:13:59 am »
[...]
The extra $1 billion allows to create a bit of profit. In Tesla's case a large part of the money is spend on R&D and expansion. Not being able to spend $1 billion is a huge chunk of cash and can be the difference between thriving or surviving. Especially for a company still in the expansion phase.
Yes, this is true! Tesla benefits greatly from all the regulatory credits it obtains. Having an extra $1.6B out of $3.2B in capex is fantastic for enabling Tesla to not just survive but thrive and expand with maximum speed. Very much without those credits Tesla would not be where it is now. Where Elon Musk could be slotted into this is in the direction, executive decisions and management for Tesla to use all the available credit to very quickly and efficiently to expand; see record breaking Shanghai, Grünheide and now Austin factories (Gigafactories if you want the marketed buzzword). However, that is NOT what is being said by bdunham7, a minority of "analysts" and some media outlets.

Chris Isidore "Tesla's dirty little secret: Its net profit doesn't come from selling cars" CNN Business, Feb 2021 https://edition.cnn.com/2021/01/31/investing/tesla-profitability/index.html  :--
They are saying Tesla is a failure of a business, would not survive and cannot ever be profitable without regulatory credits which might have been some what plausible (still a stretch) to claim in the past when Tesla turned zero profits but the last year removed any doubt Tesla could be profitable as a company and caused the share price to shoot up. Probably way, way too much up but still, the quarterly profits were a likely major trigger for many institutional (if not also many retail) investors.

Here is a debate between the analyst being heavily quoted in that CNN article vs my preferred Tesla analyst


Now again, this ignores all the good work and progress done by other automakers like Nissan and Hyundai (who I think are the biggest competitors to Tesla at least from my Australian perspective) as well as the recent and future likely success of other automakers for example the highly likely success of the new Ford/Mustang Mach-E. I don't own any Tesla shares, I don't own any shares in any companies apart from my own and my own company benefits from ANY expansion of the plug-in EV market and plug-in EV adoption no matter which automaker is the one contributing to it.

Edit: Also on profitability of the cars themselves, see this previous thread with 3 separate people (in a row) posting 3 separate sources all showing the very high profit margins achieved on Tesla vehicles
https://www.eevblog.com/forum/chat/electronics-whiz-elon-musk-is-now-the-worlds-richest-person/msg3407182/#msg3407182
« Last Edit: May 15, 2021, 12:06:41 pm by sandalcandal »
Disclosure: Involved in electric vehicle and energy storage system technologies
 

Offline nctnico

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Re: Elon Musk is delusional
« Reply #147 on: May 15, 2021, 12:49:50 pm »
Well, I'm not going to watch endless videos. Too long winded and likely to have biased information anyway. The way I see it Tesla has enough momentum and fans to keep on coasting to make cars.  But there will be a limit to the number of BEVs Tesla can sell and that number will be significantly lower compared to what companies like PSA, VW, Toyota, etc can sell. I think the comparison between Tesla and Apple is almost 1 on 1. Both don't really have to compete on price, both come up with stuff which has a high gadget factor and both serve a niche. Even if BEVs fail somewhere in the future, Tesla will stay around.
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 
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Offline sandalcandal

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Re: Elon Musk is delusional
« Reply #148 on: May 15, 2021, 12:55:45 pm »
Well, I'm not going to watch endless videos. Too long winded and likely to have biased information anyway. The way I see it Tesla has enough momentum and fans to keep on coasting to make cars.  But there will be a limit to the number of BEVs Tesla can sell and that number will be significantly lower compared to what companies like PSA, VW, Toyota, etc can sell. I think the comparison between Tesla and Apple is almost 1 on 1. Both don't really have to compete on price, both come up with stuff which has a high gadget factor and both serve a niche. Even if BEVs fail somewhere in the future, Tesla will stay around.
Points taken and fair speculation. The videos are there for anyone interested that wants the information in full or wants to have deeper discussion.

Edit: In so far as bias, that last video is literally an uncut discussion between people on genuine opposite ends of the Tesla bear/bull investment debate so I cannot agree that would be in any way biased. In solo videos, yes definitely there will be some level of bias as with any single source information however Rob Maurer has an optimistic but well reasoned and evidence based view. It's not one of those delusional Tesla fanatic channels (of which there are many on both extremes of the spectrum). I can only hope you realise any video you watch is "likely to have biased information anyway".
« Last Edit: May 15, 2021, 02:08:20 pm by sandalcandal »
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Offline bdunham7

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Re: Elon Musk is delusional
« Reply #149 on: May 15, 2021, 03:23:21 pm »
However, that is NOT what is being said by bdunham7, a minority of "analysts" and some media outlets.

??   What did I say?  Was it about scaling? Scaling up is overrated, especially in an automotive company.  There are efficiency and cost gains up to a point (which Tesla is past, IMO) and then further expansions create management and supply chain headaches.  I don't think Tesla is going to 'fail' anytime soon, not because of their growth story, but because they are now in a position to survive a serious setback or two--although their stock price may crater in the process.  Their expansion actually increases their risk in my view.  Perhaps they ought to learn from companies like Volvo and Ferrari, which they more closely resemble despite their outsized market cap.  Operating on the level of VW, Ford or god help them, Toyota, is a whole 'nother ball game.

Warren Buffet:  ...and be fearful when others are greedy.

Teslaratis: Buffet is an idiot!  Dogecoin to the moon!

A 3.5 digit 4.5 digit 5 digit 5.5 digit 6.5 digit 7.5 digit DMM is good enough for most people.
 


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