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Comment by foobarbazetc | Hacker News Reader

Why would you completely exit a winning trade that you have more insight into than most people since you’re the sole supplier of the primary component in the thing if you thought it was going to have a higher ROI than other investments?

… you wouldn’t.

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They see the writing on the wall. Big Auto is going to dominate electric vehicles. Take the Ford F-150 as one example.

https://www.ford.com/trucks/f150/f150-lightning/2022/

I don't think big cars are representative outside the US.

Eg. In Europe, you would have a lot of problems with parking it.

GP's "Big Auto" isn't about large vehicles, but about the larger and more established auto industry (Ford, VW, etc.). The F-150 just happens to be a particularly notable and recent example of an electric vehicle that seems to be particularly competently done (versus earlier efforts) out of one of those Big Auto companies. A sign that they may have finally learned how to target that side of the market.

It's not about the size of the car.

Or they take the $3b and plow it back into R&D and factories so they can serve as suppliers to the other Big Auto companies who are dying for battery suppliers.

Or the most likely case, they're tired of Elon's schtick and they can take their technology elsewhere.

I think this is the right move for shareholders if their stake becomes big enough and doesn't serve a strategic value.

If I own Panasonic stock - but 10% of the value is wrapped up in Tesla's value - what's the point? Its better for everyone if they sell and if I want I can then invest some of my own in Tesla. Unless we see Panasonic as Warren Buffet what's the point?

First rule of watching the stock markets: Sales mean little. Watch who buys things, because that indicates actual interest.

Sales might be liquidity questions, rebalancing, any number of issues.

So, what's Panasonic doing that indicates their interest? Turns out, they have a Toyota partnership. Panasonic is trying to get into the European market. Panasonic formed a partnership in Norway to build batteries.

So, most likely that sale is a signal that a) Panasonic is ready to get deeply into the battery business, and b) a signal to their other customers that they don't have conflicting interests.

(I mean, yes, Tesla is also a bad deal, but the market still disagrees)

You would if you cared about diversification at all. That is, if Tesla has problems, the stock you hold goes down, and your sales go down. Even if you think Tesla's going to do well, if you're not certain, you're wise to spread the risk.

It's the same logic as saying that an individual shouldn't invest all their money in the stock of their employer. If the employer as trouble, the individual can be laid off at the same time that the stock crashes.

you should exit any trade, winning or loser, the instant you have a better plan for deploying the capital.

At "Battery Day", Tesla alluded to their plans to make their organization more vertically integrated: Lithium mining, battery production, and new vehicle designs that incorporate their own cells directly into the vehicle structure [1].

It has been reported in the press that Tesla will (likely) move away from Panasonic as a vendor [2]. Panasonic probably sees this as a good reason to divest and focus on future customers. From [2]:

> Tesla will continue buying batteries from longtime Japanese supplier Panasonic until at least 2022 despite the U.S. electric vehicle maker's plans to produce its own cheaper alternative.

[1] https://www.youtube.com/watch?v=l6T9xIeZTds

[2] https://asia.nikkei.com/Business/Technology/Tesla-strikes-ne...

Because regardless of how much that stock is worth, you can't pay your bills with it until you sell it.

also, panasonic may have an opportunity to put that capital else where which is better for the long term health of the company.

This isn't a retail investor situation

Unless you think investing in yourself is better than investing in other companies.

Yes, they may feel they need to fund more research to stay ahead of the competition and keep the contracts they are currently getting rather than lose them. Maybe the future profits from staying ahead of the pack (or close) are worth more than the expected future growth of their Tesla stock over the current value.

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