Tesla Fairy Tale Is About to Become a Horror Story | Hacker News Reader

Tesla Fairy Tale Is About to Become a Horror Story

seekingalpha.com

21 pointsuladzislau21 comments

I've been reading every article that comes up in the news from a wide variety of sources on Tesla for 6+ years daily, and Seeking Alpha is one of the most consistently biased. They're as reliable as the tides in terms of which side of the story they want to tell.

Just FYI, Seeking Alpha is a forum for many investors with short positions on Tesla. They have been predicting Tesla's demise for a decade.

Tesla ain't going nowhere. A lot of people are missing the point as to why the stock is so high.

It's so high because it's the future, not because of current sales. If it's the future then the argument needs to be a little different if your hoping to convince people to dump it.

It's clearly high because of what people believe about the future.

What remains to be seen is whether those beliefs are correct. It's not unheard of for stocks to.fly high because of what people believe the future will bring, and then to come down when that prediction turns out to be false.

This seems a little premature as the model 3 is not in production yet.

The article claims that the model 3 sales projections are optimistic, I disagree. The model 3 is a fully electric car for $ 35 000, my brother just bought a Camry recently for more than that.

An electric car with tesla quality at that price range is a game changer than can transition the average middle class American to electric. In fact, in my mind, the model 3 seems like the make or break model for tesla.

In my mind a lot of these doom and gloom articles about tesla started when goldman sachs and consumer reports downgraded Tesla stock. But the only reason for the downgrade was continued (and admittedly long) delays for the model 3. And while the delays have been long, when you're on the bleeding edge of tech doing something new, delays are a part of the process.

Delays don't seem to be part of the process at Slack, Google, or any of your top tier software companies.

Tesla? Delay after delay. Want to cite auto industry, I can point more successful examples.

This makes some good points.

- Tesla is still losing money. Basic reality check: that can't go on indefinitely.

- Tesla is no longer production-limited. Tesla's can no longer sell as many cars as they can make.

- Solar City installations are down, way down.[1] More systems are being sold rather than leased, which is good for revenue.

- Tesla's selling, general and administrative expenses are very high for an auto company.

- Even with optimistic sales and profit margin assumptions for the Model 3, profitability doesn't look good.

These are real problems.

[1] http://investorplace.com/2017/05/tesla-solarcity-tsla/

Tesla is not production limited, that's why it's planning to create 4 more Gigafactories this year, right?

Reality check: the losses will not go on forever, the major expenses are expected to start producing income around July this year.

Where do you get this idea that Tesla can not sell as many cars as they can produce?

I sometimes wonder if Tesla should be getting into autonomous nav with some of the evident problems they have with high school geometry and recharge planning. That said, the author of the article used SG&A expenses as a club to smack them with, without bothering to examine the reeds that make up the club. Tesla has more in common with Amazon than GM for a business model, they've got a voracious R&D appetite, and so on. They may well fail, but this article doesn't even seem to have a grasp on what they are, hence the measurements are all of time in furlongs per fortnight :-)

Methinks someone wants Tesla stock cheaper. Absolutely no mention of the considerable IP capital Tesla is building, or what that might be worth to a company with smart car ambitions and 250B in the bank.

Can't even read the story on mobile. Good job, seeking alpha. And no, I don't want your app.

The stock still defies gravity to all time high. Not sure whether it's irrational exuberance or investors truly see something in Tesla.

Edit: Got scared and got out at ~280. It was a good run but time to move on.

One factor: At least a couple of major investment banks, along with many other commentators, see Musk's apparently good relationship with President Trump as a reason to invest in Tesla. Of course, nobody can say how much it affects their market capitalization, but just the banks saying it will be self-fulfilling to an (unknown) extent.

Musk wouldn't be the first to use lobbying to help his business, and so far (a small sample) Trump has used his power much more than past presidents to help and punish businesses he favors/disfavors (e.g., threatening businesses that want to relocate factories, threatening airplane manufacturers, tweeting favorable and unfavorable things about businesses, etc.). Trump has a reputation for corruption, that's factual; that doesn't tell us how true it is or how it applies in this kind of situation or in this particular case. What I'm trying to say is, let's be careful with the facts.

If you search for 'musk trump', you can find plenty of discussion of it. Here's one article from a good source:

https://www.nytimes.com/2017/01/26/business/elon-musk-donald...

Unless the government buys from Tesla, Trump's help won't matter much to investors. In the case of a bailout, investor equity is the first thing destroyed. Trump would certainly help Tesla to survive in such an event, but for investors, its' better to buy after that than before.

Good points; I wonder what the investment banks saw. Certainly Tesla depends on government laws, regulations and policy, especially as a new entrant seeking widespread changes in several regulated industries. For example, they want electric charging stations spread nationwide, they'd probably like fossil fuels to become more expensive or at least become less subsidized, subsidies for electric cars, regulators to not delay or limit Tesla innovations, etc. etc.

Also, government does R&D on battery tech, I'm pretty sure. Does anyone know how much Tesla directly or indirectly benefits? Finally, they may want to sell to government; fleets of large organizations often are good customers for alternative fuels, because (AFAIK) they can provide and support their own infrastructure. But that is speculative (as is investing!).

> ... got out at ~280. It was a good run but time to move on.

Same here.

Tesla CEO Elon Musk is clearly the greatest salesman in tech right now, and eager investors are rushing to purchase TSLA in anticipation of greater riches to come. The money pouring into their corporate coffers will be extremely useful as they ramp up for Model 3 production. I'll probably jump back in when they start paying a dividend. I'm not holding my breath.

Your decision is going to look very funny in 4 years.

My decision won't last for 4 years. If the stock's price looks right, I would jump back in. Given Tesla stock's volatile nature, it has a better probability of dropping 100 points than keeping on going up.

I appreciate your flexibility; I wonder what you would do if it went up 200 points instead-- conclude that that is surely as high as it can go, and wait for it to come back down?

Nothing. I don't fret over decision made based on what is known at the time. And I don't get emotionally attached to a stock. Who care if TSLA went up another 1000 points. There's always another investment opportunity.

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