Featured Tesla must stop overpromising, could need more finance: analysts

it's disheartening to have people continually writing biased stories, trying to influence people to sell, so they can make money.
almost makes you lose respect for wall street.

 

I've heard those stock brokers barely get by as is.

 

Enen a ½decade ago;

How Much Does a Stockbroker Make Per Year? | Chron.com
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Let's not confuse things. Tesla didn't just issue a bunch of new stock, they used stock that shareholders already voted in their coffers as part of the purchase of Perbix a privately held 150 person automation supplier. Cash was also used, and the full purchase price has not been disclosed. The shares have no restriction for sale, but since this like tesla's advanced automation (formerly Grohmann Engineering) will be mainly dependent on business from tesla. In the case of Grohmann, the previous president is now gone, because he wanted to continue to sell to other manufacturers (bmw and mercedes) while Musk wanted the workforce to concentrate almost entirely on tesla. The previous president of grohmann got a lot of money, but no longer controlled the company. Part of the tesla business plan is to prove automation in their inital plants (California and Nevada) then sell automation to other companies. Tesla also probably needs more automation employees, and aquiring a company in Minnisota with 150 good employees in a place where more talent can be added quickly is probably better than trying to do all the growth in california and nevada, where they have already reached out to a lot of the tallent pool. Plus these workers don't need to worry about musk sleeping on the roof, but they will travel more to Fremont and Reno.

I don't think the complaint is about betting (and this is pure gambling) against the tesla valuation, the complaint is about getting these bottom feeders on TV, magazines, and newspapers. A lot of it is political. Bob Lutz, the guy that bankrupted gm, turns out an interview at least every 6 months about how tesla is going to go bankrupt. Part of it comes from culture wariors that want gas guzzlers and diesel exhaust, some come from auto dealers that will get crused if this business model takes off. Lots of people have lost a great deal of money betting against tesla, and there voices get amplified. Should there be a law against putting out false information to manipulate the stock price? Yep, there is, but people are rarely prosecuted.

I've bought puts on 3 companies, blue apron, snap chat, and united airlines. The first two because of awful business model, the last because of over valuation and bad execution. I've taken profits on each. Tesla is a momentum stock whose momentum is broken, but shareholders have been well rewarded for believing the impossible might happen. They said that no one wanted electric vehicles, now there are 450,000 pre orders. They said you couldn't build a gigafactory and find demand, they have, but it may take until the original planned date of 2020 to get it to full production. They said the Luxury bev market was small and couldn't grow, yet tesla will sell over 100,000 this year, up from 31,655 in 2014, over 3 times the volume in 3 years after the shorters said demand had peaked. They have made mistakes. They made the model X over complicated which delayed the model 3 and caused quality issues. They bought solar city for too much money, then stretched management thin to try to turn it around (they will, but money would have been better spent working on the model 3 and Y). But I would not bet against this company. I sold out earlier this year, because of the high valuation, but I'll probably buy back in when I think problems are worked out in manufacturing.

 

Unlike the early Auto industry from ¾ of a century ago, nowadays an auto manufacturer starting up has to deal with disability insurance, land use, environmental, HR, Union push back, vehicle's extream safety standards, competitors' lobbies, etc. That's what makes the Tesla story stand out so freakishly. Many a manufacturer died along the way without having all these modern hurdles, yet there it is.
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Is one of these the 'subcontractor' Tesla reports screwed up the battery assembly line?

Bob Wilson

 

No, we don't know who that supplier was. In the model X production hell we found out months later who the bad supplier was, because tesla broke a large contract with them for cause. The supplier may not really be at fault, timelines were moved up and parts design changed. It simply could have been bad requirements, or forced early delivery. It is also partially tesla's fault for not managing the supplier better. We also know the rapid hiring at the gigafactory has led to some less than high performing employees. Hiring in Minnesota and Germany may be easier, and perhaps will diversify engineering of the machines that build the machines that are the hope of tesla's future profitability.

Still in Model 3 “production hell,” Tesla buys factory technology supplier | Ars Technica

 

For financiers, read gamblers. Generally, bigger odds means higher profits.