Tesla Passes Ford by Market Value


#21

I really like this Chamath guy. I will need to think this over… His idea of buying convertible bonds is very, very smart.


#22

I don’t think the convertible bond will help you much on the downside. If the company bankrupts, equity holders get wiped out first, but does not necessarily mean the company has any asset left to pay off debt. So bond holder principal could still get wiped out as well.

So, be careful what you are buying into. If you believe in the company then buy the stock. However this kind of creative maneuvering might not get you further nor protect you much.


#23

Your guys keep me awake. Like Thomas Edison? Is Elon going to sell dirt cheap electric cars just like Thomas dirt cheap light bulbs? I’m waiting for a $5k electric car :grin:


#24

https://finance.yahoo.com/news/tesla-shares-booming-another-automaker-205402955.html?.tsrc=applewf


#25

The premise of the VC guy is the third iPhone was the game changer, so the third Tesla car would be the game changer. I’m not even sure where to start on how horrible that analogy is. It was actually the 2nd iPhone named iPhone 3G that was the game changer. That was when the app store launched. Then there’s the fact the iPhone was profitable from day one. iPhone had ~60% gross margin while Tesla GM is 24%. Tesla still won’t be profitable after model 3. I’m not even counting the different capital requirements of scaling capacity in the two businesses. Tesla will have to spend tens of billions more to scale production to equal Ford or GM.

If Tesla was located anywhere outside Silicon Valley, then people would value it as an auto company and not a tech company. People love to conveniently ignore the capital requirements to scale manufacturing to even modest numbers. Who’d get excited about a company that needs to spend tens of billions on capacity to sell products with 24% gross margin? What successful tech company has GM that low? Is model 3 going to hurt or help that GM number?


#26

He has a good premise. His premise is to invest in the jockey. Forget about technology, finance, and business model. Invest in the jockey.

Haven’t I already posted something of a similar tune here before? Apparently Mr. Palihapitiya came to the same conclusion.


#27

If “winning” the race is creating a profitable company, then you’re betting on a jockey that’s never won a race.


#28

Yeah, seems Chamath is a forum lurker and learned that trick from you. :smile: I thought of you when I heard him say the jockey bit.


#29

What matters for Tesla is whether the unit economics is sound. I need to look into that to find out. Musk has proved time and again he can get cheap capital to take care of the CapEx need. And if he can’t get financing Tesla is a hot brand that’s worth a lot to Apple for example with 250B burning a hole in its pocket. So I think the downside is not as dire as some may think.


#30

24% gross margin and that’s on high-end luxury cars. It’s expect GM to be even lower on model 3. It’s a far more competitive price point. I’d love to see someone find a highly successful tech company with that low of GM.


#32

No I did first. I invested in Jobs in 1997. Actually millions of AAPL investors did that in 1997 when Jobs return. So Chamath is not as smart as he makes himself up to be. CEO AT&T openly admitted he is investing in Jobs when he made the decision to sell iPhone without even knowing what the product is. Investing in people is not a new idea. I dislike people who talk about ideas that have been published in textbook and all forms of literature ages ago as if it is a totally new idea invented by him/ her.


#33

To be fair, he never said that he was the first to do so. He is simply following a sound investment strategy, which is to invest in a person perceived to be great. Many people have done so in the past and that strategy either worked for them or failed them.


#34

Is essentially the implementation of this saying:

良禽择木而栖,贤臣择主而事


#35

I also dislike journalists who write like this:

Elon Musk Just Gave Some Brilliant Career Advice. Here It is in 1 Sentence.

If you’re not progressing, you’re regressing; so, keep moving forward.

As if he invented above wisdom.

學如逆水行舟不進則退


#36

Google translate tells me it is “Learn to go against the current”. Relevance?


#37

Translation is wrong.

Whether it is learning or doing things, we have to progress every day, if did not progress, it means regress; if keeps conforming and not moving forward, would be outdated and eventually be eliminated.

Literal translation is:

Learning is like rowing a boat against the current, not moving forward means moving backward.


#38

http://www.cnbc.com/2017/05/18/tesla-workers-are-passing-out-on-the-factory-floor-according-to-reports.html


#39

#40

Ooh La La…