How can you say profitability is attractive and talk about Tesla? There’s no profitability there. They are burning cash and will have to raise money again.
But isn’t it also true, initial capital spending/ramp up for a manufacturing/non internet/non software company will lead to burning of significant amount of cash? (assuming cash burn is from capital spending on production facilities)
Yes. Elon is fearless in that department. He is not afraid of burning it all up.
If your per unit profit is high enough, then yes. The problem is peole value Tesla as-if they are making far more cars than they do. It’ll take billions maybe tens of billions to build that much manufacturing capacity. That’s some serious dillution given the current market cap. I don’t see them reaching profitability until after they are done investing heavily in R&D to design those cars and have built the capacity. What’s the timeline on that?
You can find companies that are already profitable and growing revenue just as fast as Tesla. They also won’t need to spend that quantity of CAPEX to grow their capacity.
Please name some of them for me to consider as investment.
Shhhhhh, drink the Kool-Aid…(Tesla is good… Tesla is great…Tesla…Tesla…)
TSLA grew revenue 31% yr-yr in Q4. Yahoo stock screener says there’s 287 matches for growing faster than 31% and EPS greater than zero.
I hope Tesla will crash and burn and Tim Cook will buy it for pennies on the dollar.
They need some financial discipline and Tim has plenty to teach them… on the other hand their SolarCity buy makes it much more difficult for a white knight to come along.
Why isn’t TSLA able to increase their production? It should not be really Rocket science…
Supply chain isn’t as easy as people think. I’ve been on the operations and finance side of it. It can make or break a company. What apple does at that scale is just amazing. They have plants with 200,000 workers a shift. Just look at how long it takes to get in and out of a stadium. They have 2-3x that many in and out of the factory multiple times a day.
Most people don’t realize even stupid easy stuff like bath and body works seasonal lotions have a 9 month lead time. Clothing is often designed over a year before you see it in stores.
Even after 10 years, TESLA will not be profit or show less net profit margin like Amazon, but the stock grows ! There are few companies like TSLA, NFLX and AMZN, it will be different.
Amazon was growing much faster when it was the same revenue that Tesla is now. Even now Amazon is growing at over 20%.
This is the exact opposite of advice from Buffet – “invest in a company any idiot could run, because sooner or later, one will”
I like to “think different”
Think different is not contrarian. Contrarian must have a good reason, not just for contrarian sake.
When everybody running out of a theatre on fire, you don’t run inside just to be contrarian.
Musk didnt even want a car company…He will loose interest like in all his other endeavors…His real interest is space travel
His ambition is too high in everything and true Entrepreneurship. He was a founder partner in paypal. Now, you know how it is growing. His next successful venture is Tesla, a hard work he took 10 years before and made it through. Next is space-x.
Once he makes Tesla to a profitable level, he will leave to space-x venture. Until then, TESLA will be volatile as usual.
All these are already stated by him. He is able to make it through with considerable success and he will keep on doing challenging work.
Musk is already bored with Tesla. .He made a cool car, the S, after the Sportscar which was a joke…Nothing else left to prove…Should sell it to GM or someone else that actually knows how to produce millions of cars…
Um, you should read what he actually did at PayPal. The idea wasn’t even his. His main contribution was his startup had the banking ID number, so buying his company saved them months of waiting to get one. They literally fired him after less than a year of him running the company.
Judging by all the comments here about Tsla, it is still the talk of the town! I mean, I didn’t see people spending more time talking about the 300 other companies supposedly more profitable, nor any mentions of those CEOs. Why is that? What is the psychology behind all this? Is it because people feel that they have missed the boat so now all the sour grapes are pouring out? Don’t be! It’s never too late to invest in it. Tsla is still a very young company with lots of room to run. You can still make very good money should you decide to invest now.