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Comment by nickik | Hacker News Reader

This so incredibly wrong and un-informed its mind blowing.

SpaceX has been profitable from pretty early on in its history and were until they need massive cash for the Starlink project.

Tesla is a attempting to get into a very, very capital intensive industry and during the early growth and again in 2017 they had to be less un-profitable. But the companies consistently showed that if it stopped growing it could be profitable.

The idea that it literally all there is to it is insane. Pretty much every startup is willing to make loses for growth, it happens literally all the time.

This is simply empirically wrong.

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Musk’s companies continuously raise funds, even SpaceX. Spending money in order to grow is easy, and not necessary given sufficient profitability. Look at Apple, Amazon etc. for examples of successful transitions to profitable hypergrowth.

Startups who spend money to grow eventually make it, or die. Musk’s self-promotion, combined with a low interest rate environment, has allowed him to continuously raise enough money to stay in a zombie state, neither dead, nor profitable: only spending.

SpaceX: 39 total funding rounds (missed a few): 2002, 2005, 2007, 2008, 2009, 2010, 2015, 2017, 2018, 2019 (4x), 2020 (x2), 2021

Tesla: 35 total funding rounds (missed a few): 2004, 2005, 2006, 2008, 2010, 2012, 2013 (3x), 2014, 2015, 2016 (2x), 2017 (4x), 2019, 2020 (2x)

Both companies are profitable. This is simply a lack of understanding of business and accounting. Both companies are re-investing all of their profit in massive capital expenditures to support business growth - that's not a money losing endeavour, that's the same strategy that made Amazon into the behemoth it is today. It's also the logical strategy if you have a long time horizon for investment - which is arguably much better than companies which have short-time horizons.

You are crazy if you think Tesla margins are different than other automakers.

They do the exact same thing, and building cars is the worst business there is.

Regardless...now is the moment when the rubber meets the road. Market cap cannot grow more than 1 trillion, Musk now has to start posting margins in line with such marketcap.

> You are crazy if you think Tesla margins are different than other automakers.

Tesla's margin's are about triple Ford's margins over the last decade. That can't last, but it's far from the worst business there is.

[1] https://www.macrotrends.net/stocks/charts/F/ford-motor/profi...

> Regardless...now is the moment when the rubber meets the road. Market cap cannot grow more than 1 trillion, Musk now has to start posting margins in line with such marketcap.

Tesla stock is wildly over-valued in my opinion. Even if everything goes fantastically for the company it may not grow into its own stock price. I would like like to short the stock, among others, to hedge my long positions.

I still believe the company will be a success though - just not as quickly as the market seems to think.

Point being. Will all Musk bootlickers be around when Tesla "succeeds" but is a paltry 87 billion dollar automaker company and Musk goes way down in the Forbes list?

My guess is no. People want to talk about success and success is measured with marketcap and net worth. 99% of people who know Musk name have really no business knowing his name and care very little about electric vehicles.

My guess he also can't handle going back to 2014 levels of social relevancy and will try and run for governor or some other thing like that.

Musk is fundamentally an attention whore, he pumped the marketcap before the company was mature, it's not like Tesla marketcap grew spontaneusly.

This is you: http://paulgraham.com/fh.html

Entrepreneurs aren't rockstars or popstars

Nobody loves/hates Sergey Brin, Lawrance Page, Jim Simons, John Overdeck, Clifford Assness, Andrew Beal etc...

If you worked in the promotional industry you'd know that rockstars/popstars have to be dragged kicking and screaming , away from drugs and parties, to do interviews and media appearences.

Entrepreneurs who want to be famous such as Musk and Trump...nobody is dragging them, they are the ones who want to do it.

As per the article, master promoters, because they know their business is not capable of making it on their own merits.

I remind you that Microsoft never ever took VC money, just organic growth and re-investing revenues. People who do it the proper way don't need the flashes, quite the contrary they are busy hiding their margins to avoid other people getting in the space.

They continuously raise funds not because the product they sell are losing money because they are making money and they want to make more of them.

How is this hard to understand I don't understand.

Go and compare Amazon and Tesla in terms of time since IPO if you want to claim Amazon of example of a good company.

Also, much of the money Tesla raised in the last couple of years is not actually spend, but rather is part of the cash balance of the company.

Also the argument that 'his companies are not as successful as the two most successful companies in the world today' is complaining on a pretty absurd level.

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