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TESLA, The Ambitions of Musk
nipper
post Posted: May 26 2019, 05:13 PM
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QUOTE
Elon Musk risks running out of road as rivals wake up

By DANNY FORTSON - The Times

Remember the Palm Pilot? Way back in 1996, the handheld “personal digital assistant” was a revelation. It was the first electronic organiser, complete with a touchscreen and handwriting recognition. It showed Palm’s rivals that customers would pay - and pay handsomely - for a handheld computer, paving the way for BlackBerry and, later, the iPhone.

Yet Palm, the company, met an ignominious end. It was lapped by rivals that took the idea and ran with it. Palm, valued at dollars 50bn on the day it floated in 2000, was passed from one acquirer to another until TCL, a little-known Chinese manufacturer, bought it in 2014 for an undisclosed sum. A plan to revive the brand has gone nowhere.

It is a cautionary tale that Tesla chief executive Elon Musk would do well to heed. His company, which showed the world that drivers would pay - handsomely - for electric cars, is on the ropes. Again. Its stock is down nearly 40 per cent since the start of the year, closing on Friday at $US190.63, and it is burning through more than $SU200m in cash every month. Sales of the California company’s high-end models have plunged.

Perhaps most importantly, Musk’s rivals have woken up. More than 20 electric car models - from BMW, Nissan, Kia, Jaguar and others - have hit the market or will do so in the next year. Musk, who has ploughed a lonely furrow for years, suddenly finds himself facing an all-out assault from Detroit and Frankfurt. The 47-year-old billionaire created the category; now he is at risk of being crowded out. It begs the question: could Tesla become the Palm of electric cars?

More and more investors are asking just that. Dan Ives has long been a Musk believer. Just six months ago he set Tesla’s price target at $440 a share and called it “one of the most dynamic technology innovators over the past 30 years”.

Ives, an analyst at the investment firm Wedbush, last week slashed his price target to $230, saying: “It feels like the walls are caving in.” Meanwhile, in a call with clients, Morgan Stanley’s Adam Jonas said the company had swung rapidly “from a growth story to a distressed credit and restructuring story”.

What’s changed? In a word, credibility.

It was only three weeks ago that Musk raised $2.7bn with shares and convertible loans - money he had spent most of the past year saying he didn’t need. In a call with investors, he said the cash was a “contingency fund”. He added: “We don’t expect to spend this capital.”

It was no secret that the company was losing money, but all seemed under control. At an “autonomy day” just days earlier, Musk - ever the showman - had set out how Tesla would become a $500bn giant thanks to a plan to turn its global fleet into autonomous robo-taxis.

Then everything appeared to change - and with extraordinary speed. In a leaked email Musk sent to employees on May 16, he laid down the law on a “hardcore” cost-cutting plan, writing: “All expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account, must be reviewed, confirmed as critical and the top of every page of outgoing payments signed by our chief financial officer. I will personally review and sign every 10th page.”

The extreme measures were for good reason, the chief executive explained. The $2.7bn “contingency fund” had morphed into a lifeline - and a short one at that. Musk wrote that, based on Tesla’s high burn rate, the cash “actually only gives us approximately 10 months”.

He has form for saying one thing, then doing another. Every year since its 2010 float, except for last year, Tesla has tapped investors or banks for more money. Often, the fundraisings have followed Musk’s fervent proclamations of Tesla’s financial strength.

Yet, until recently, investors seemed to be giving him the benefit of the doubt. He was trying to pull off something revolutionary - starting an all-electric car company from a blank sheet of paper. After this month’s fundraising, patience appears to be thinning, principally because the well-publicised “master plan” that Musk laid out is not working as expected.

The key to Tesla’s hopes of turning a profit and breaking the cycle of bailouts is the Model 3 “electric car for the masses”.

In 2017, Tesla made 2,900. Last year, it churned out 180,000. The goal for 2019? At least 250,000, based on production rates from the first few months.

The numbers are impressive - even if the company has been through what Musk has called “production hell” to get there - but the ramp-up is occurring just as Tesla is squeezed by two forces: its own debts and a deluge of new competition.

The company owes about dollars 10bn, with two big chunks falling due soon: a dollars 1.1bn payment by the end of the year, and a further $819m in 2020. After this month’s fundraising, its cash pile sat at $2.8bn.

Factoring in the upcoming debt repayments, and a $200m-plus monthly cash burn, it is clear why Musk is checking his coffee receipts. Breaking into the black, and doing so very soon, is vital. “The debt is a noose around Tesla’s neck,” Ives said. “The math doesn’t lie.”

Musk hopes the Model 3 will be the solution. The company has pledged to sell up to 400,000 cars this year - the majority the Model 3. Investors were spooked last month when Tesla revealed that deliveries for all models in the first three months of the year had come in at 63,000 - nearly a third lower than the preceding quarter. The drop, the company said, was due to the halving of a $7,500 tax credit given by the US government to electric-car buyers. The subsidy is due to be cut in half again in July.

The cuts are based on the total number of electric cars sold by a particular brand, so do not apply to new competitors.

Toni Sacconaghi, the Bernstein analyst famously lambasted by Musk for his “bonehead” questions, said that Tesla’s financial troubles were even worse than they appeared. That is because, in its most recent financial statement, Tesla revealed it had received a $200m infusion in the form of pollution credits, probably from a one-off deal it struck with Fiat Chrysler. The latter paid to pool its fleet with Tesla’s to avoid a multibillion-dollar fine from the EU.

Stripping out the windfall, which equated to about $3,000 for every car sold, Tesla suffered “the largest [margin] decline in [its] history,” Sacconaghi said.

Against that backdrop, Tesla’s rivals are revving up. Mercedes and Audi are joining Jaguar with new electric SUVs while Nissan, Chevrolet, Hyundai and Kia are going head to head with the Model 3.

As the fight for the future of the car industry takes hold, Musk’s unpredictable nature and shifting focus are also worrying investors. He has grabbed headlines with the barely credible plan for an army of robo-taxis - not to mention new insurance products and other “sci-fi projects”, in the words of Ives. Last week, Musk was exulting on Twitter about the successful launch of a fleet of broadband satellites.

“There’s a lack of focus,” Ives said. “Tesla are concentrating on other issues when they should be focused on the hearts and lungs. I can’t look an investor in the eye and recommend a company whose management is disconnected from what is really happening. The bloom has come off the rose.”

When it comes to innovation, being first doesn’t mean you win. Just ask Palm.
Sunday Times



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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mullokintyre
post Posted: May 18 2019, 07:09 PM
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Oh, Oh, looks like Tesla and possibly Elon as well, is in a bit of Bother.
from ABC NEWS

QUOTE
Tesla chief executive Elon Musk told employees that he will increase scrutiny of the company's expenses in his latest initiative to cut costs at the electric carmaker.

Key points:
Tesla raised more than $USD2.7 billion in a stock offering earlier this month
But chief executive Elon Musk warns the company is spending $USD200 million per month
It is not the first time Tesla has made moves to cut costs, having laid off staff in the last 18 months
Tesla earlier this month closed a $US2.7 billion ($3.93 billion) offering of stock and convertible notes, giving it much needed cash as it ramps up production.

Mr Musk in an email to employees, seen by Reuters, said its net proceeds from the offering gave Tesla only 10 months to achieve break-even at the rate it was burning cash in the first quarter.
"It is important to bear in mind that we lost $US700 million in the first quarter this year, which is over $US200 million per month," Mr Musk wrote in the email.

"That is why, going forward, all expenses of any kind anywhere in the word, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must (be) reviewed.


Wonder how the folk who just stumped up $2.7billion will feel about such urgency.

Mick



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mullokintyre
post Posted: May 4 2019, 06:45 AM
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Despite all his denials, Musk and the Tesla board have been forced to go to the market again.


QUOTE
Tesla said Thursday it plans to raise up to $2 billion, with $1.35 billion coming from convertible notes and $650 million from new equity, including a big purchase from CEO Elon Musk.

In a filing, Musk signaled his intent to buy about $10 million of the electric auto maker’s stock in the new offering. The total equity offering is for 2.7 million shares of Tesla. Musk’s purchase would be 41,896 shares. Before the offering, Musk owned about 20% of Tesla’s outstanding shares, worth about $12.6 billion, according to FactSet.

The move comes only a week after Musk deferred on questions about the company raising capital any time soon.

“I don’t think raising capital should be a substitute for making the company operate more effectively,” Musk told shareholders on the company’s quarterly conference call. “I do think there is some merit to raising capital, but this is sort of probably about the right timing.”

Musk was pressed on the topic by Wall Street analysts on the call, since Tesla burned through around $2 billion in cash in the first quarter of 2019
Musk’s purchases have been reliable short-term buy signals for the stock, according to InsiderScore.com. Following the last five purchases by Musk, the shares were higher on average by 41% in the next three months, according to InsiderScore.

Tesla shares have been under pressure lately, down nearly 30% this year. The stock’s surge following the filing came from “the fact that they ripped off the Band-Aid and decided to raise the capital,” Dan Ives, managing director of equity research at Wedbush Securities, told CNBC.

“There was growing fears that this company was going to need incremental cash going to the second half of the year. For the first time, they listened to investors and the math doesn’t lie in terms of what they needed to do,” Ives said. “Now there’s a relief because the liquidity issue and the finance concern could be put to rest in the near term.”
.



Don't normally rely on CNBC for accurate nes, but here it is anyway.

I find it instructive that share purchases by Musk cause an upward spike in the share price.
On the surface of it, buying $10 mill worth of shares seems like a healthy endorsement.
However, for guys like Musk, $10 mill is equivalent to his lunch money.
10 mill in a 2 bill investment is about 0.05%.

Mick the cynic



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nipper
post Posted: Apr 26 2019, 04:45 PM
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In Reply To: triage's post @ Apr 26 2019, 04:38 PM

is like .... amazing how the self-promoting attention seekers always seem to force their way to the front.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
triage
post Posted: Apr 26 2019, 04:38 PM
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In Reply To: nipper's post @ Apr 5 2019, 06:27 PM

Tesla's demise is like Brexit concluding, is like Trumpy finally going too far, is like China hitting the wall, is like the housing market having a major correction, is like a couple of my stocks becoming fairly priced, is like ... always about to happen, never seems to happen, we live in an era where there are no consequences. rolleyes.gif



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

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nipper
post Posted: Apr 26 2019, 01:34 PM
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QUOTE
"The probability of the steering wheel being taken away in the future is 100%.

Consumers will demand it. I want to be clear. This is not me prescribing a point of view about the world.

This is me predicting what consumers will demand. Consumers will demand in the future that people are not allowed to drive these two-ton death machines.”
Elon Musk, CEO, Tesla
- at least he puts his money where his mouth is.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


nipper
post Posted: Apr 5 2019, 06:27 PM
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It's all over (the newswires)
QUOTE
Elon Musk saw $US1.1 billion ($1.55 billion) wiped from his net worth in the first two minutes of New York trading overnight as Tesla shares sank as much as 11 per cent. The fall cut his net worth to $US22.3 billion on the Bloomberg Billionaires Index as of 9.32am US time. Tesla ended the day down 8.2 per cent.

The electric car maker had reported a record decline in deliveries during the first quarter, down to 63,000 vehicles in the three months that ended in March, from 90,966 in the fourth quarter.

About $US10 billion of Mr Musk's fortune is derived from Tesla, with approximately $US13 billion coming from his stake in closely held rocket business Space Exploration Technologies Corp, according to calculations by the ranking.

The bigger than expected drop in Tesla deliveries spooked stock and bond investors, raising concern about the electric car maker's ability to make money as Mr Musk headed into another legal tussle with regulators on Thursday.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
blacksheep
post Posted: Mar 6 2019, 11:43 AM
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Hard now - even for TESLA diehard fans - to trust anything Musk says

'Huge financial concern': Tesla shares suffer $11b meltdown after Elon Musk's shock move, China issues

QUOTE
The abrupt move by Musk, 47, shocked Alex Chalekian, the founder and CEO of Lake Avenue Financial in Pasadena, California. The firm, which manages more than $US150 million in client assets, sold all of the Tesla stock held for advisory clients on Friday.

"This was a total 180-degree turn," Chalekian, who owns a black Tesla Model S, said in a phone interview Monday.

"Tesla had been talking about expanding stores, and all of a sudden they are closing them. To me, this signals a huge financial concern and a possible cash-flow issue for Tesla."


https://www.smh.com.au/business/markets/hug...306-p51212.html
Attached File(s)
Attached File  tsla.png ( 97.79K ) Number of downloads: 9

 




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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
early birds
post Posted: Feb 27 2019, 10:53 AM
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not direct relate to Tesla, but don't know hwere to put it as i think it is really important thing to whole EV sector.

===============
https://www.bloomberg.com/hyperdrive

Just a few years ago, automakers had a largely uniform response to questions about the construction of refueling stations for electric vehicles: “Not my job.” Today, they’re starting to realize that no one else is going to build stations at the scale needed to stimulate sales of battery-powered cars, so they’ll have to do it themselves. “Charging infrastructure is a bottleneck,” says Andreas Tschiesner, head of the European automotive practice at McKinsey & Co. Carmakers are “ready to get the ball rolling because nothing is happening on its own.”

Volkswagen, Daimler, Ford Motor, and BMW have teamed up to create Ionity, a company that’s building charging stations across Europe. VW has formed Electrify America, a unit that will spend $2 billion on stations in the U.S., and the German company is considering a similar operation in China. Porsche is installing chargers at dealerships and is working with BMW and Siemens to develop ultrafast charging. And Japan’s big manufacturers have set up a company to promote installation of quick chargers.

BOTTOM LINE - Automakers will spend $255 billion developing hundreds of e-car models by 2023, and will need a wide network of charging stations to persuade customers to buy them.
==================

“Charging infrastructure is a bottleneck,” -----problem that hard to fix....really Govt. to step in to help.
Volkswagen, Daimler, Ford Motor, and BMW have teamed up to create Ionity, a company that’s building charging stations across Europe-------they doing it for Tesla?? nah, they will kill Tesla i reckon.


that is two big things i'm bearish on Tesla. i'm sure people have a lot other things to say as well..



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mullokintyre
post Posted: Feb 26 2019, 05:05 PM
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Looks Like Musk is in hot water with the SEC again.
[quote]
The United States Securities and Exchange Commission (SEC) says a federal court should hold Elon Musk in contempt for violating last year's settlement with the federal agency due to new statements made on Twitter, sending shares of the electric carmaker down 5 per cent in extended trade.

Key points:
Mr Musk agreed last August that any material statements on social media had to first be vetted by Tesla
The SEC argues a February 20 tweet broke this agreement
But Mr Musk says the numbers he tweeted were already available in Tesla earnings transcripts
Mr Musk, Tesla, and the SEC last year settled a lawsuit filed by the federal agency over the chief executive's tweets in August that he planned to take the company private.

As part of that settlement, any material statements made by Mr Musk on social media were to be vetted by the company.

The regulator pointed to this February 19 tweet from Mr Musk
It noted that Mr Musk did not seek or receive preapproval before publishing this tweet, which was inaccurate and disseminated to over 24 million people.

"Musk has thus violated the Court's Final Judgment by engaging in the very conduct that the preapproval provision of the Final Judgment was designed to prevent," the SEC wrote in its motion filed on Monday (local time) in federal court in Manhattan.

Mr Musk subsequently clarified his tweet to say that the "annualised production rate" at end-2019 would probably be about 500,000, with deliveries expected to be about 400,000.

He also went on to defend himself — on Twitter — saying the same figures he quoted in his tweet were available in a Tesla earnings transcript from the end of 2018.

:[/quote
From ABC News
All he has to do is run it past the board, but as usual, he thinks that a shjeer genius like himself should not be constrained by the rules for mere mortals.

Mick



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sent from my Olivetti Typewriter.
 
 


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