Musk has found investors willing to put money up. That will eventually stop if his ideas can't show a real profit potential. Basically any company that loses money every day is going out of business - it's just economics.Musk has a formula that works.
Amazon also bought the Washington Post and Whole Foods, but that because they are in a great cash position. Tesla’s acquisition of SolarCity was more desperation than expanding their strategy.Musk has found investors willing to put money up. That will eventually stop if his ideas can't show a real profit potential. Basically any company that loses money every day is going out of business - it's just economics.
Take a look at a company like Amazon. "Pundits" have been saying for years that they are going to go under because they have almost never turned a profit. It's a different story though because their funding comes from their huge volume of sales and not from investors. They operate at a slim profit margin and like to reinvest in their employees and infrastructure instead of posting profits every year. So even though at the end of the year, they are showing a loss (or break even), they are pretty healthy.
I don't get the same vibe from Tesla.
Amazon was incorporated in 1994, went online in 1995 and finally turned its first profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than $1 billion. (Amazon's initial business plan was unusual; it did not expect to make a profit for four to five years.) And have contiined to expand and MAKE MONEYI am not sure it is really quite fair to put Tesla down just yet. They are a very young company and they have only a few products to sell at this time. They have come alot further along than many thought possible. Their cars are unique in some ways and that's what makes them appealing. They are also quite expensive, yet that has not stopped people from buying them and others from wishing for one.
When the more affordable Model is available in numbers we will then see what the future for Tesla looks like. Lutz doesn't think they have a future. I am betting he is wrong.
I was stunned by the introduction of the sports car and the semi. It sure feels like that to me. Remember Webvan?dannycamps, +100 on your take.
Instead of insuring a prosperous future, the Model 3 ironically might be one of the things that leads to the collapse of the company. The window of opportunity for the M3 to lead the company to prosperity is closing down with all the delays.
Tesla needed the Model 3 to burst out of the gate running forward for it to have a positive impact for the company. In effect, the M3 would have shifted the company away from depending entirely upon high profit margins to depending more upon volume sales to lead to profitability. Its presence was bound to cut into demand for the Models S and X with their substantially higher profit margins. And this is what is happening - the gate opened for the Model 3 and S&X demand dropped.
Tesla probably should have remained a niche manufacturer expanding into market segments where profitability did not depend upon high volumes. They wasted precious time with the poorly conceived and unnecessary gull winged doors of the Model X, pushing back the Model 3's development - and GM jumped in and beat them to the punch with the Bolt EV.
And now, amidst the delays in getting the Model 3 produced, Tesla surprises the world with an exotic sports car as well as debuting a semi truck, both marked for future debuts and both candidates for bringing in cash via reservations in advance of production. These are the sort of niche vehicles that Tesla should have been doing before going down the big volume path with the Model 3.
Looking at Tesla over their short history and where and what they are doing now, I am reminded of another car company created by a rich and successful industrialist with no background in the auto business - Henry J. Kaiser. His company lasted for nearly 10 years in the post WWII period. That was a time when things advanced at a sudden rapid pace in styling and engineering design. Kaiser's cars were among the first post-war modern designs to debut and sold quite well, but they stuck with using flathead engines of old design, and the company quickly fell behind the big manufacturers with their new, overhead valve V-8 engines with ever-increasing size and horsepower.
Towards the end, and in an attempt to draw positive attention to themselves, Kaiser came out with a limited production two-seat roadster with sliding doors - the Kaiser Darrin. Not a lot were made and the company soon bailed out, sending their production equipment and dies down to South America where it lived for several more years.
I really hope the surprise debut of the exotic sports car is not that same harbinger of fate for Tesla.
He also stated that compliance cars like the Bolt EV, hurt the brand.https://www.google.com/amp/s/www.cn...of-business-says-former-gm-exec-bob-lutz.html
That's what the father of the Volt says.
Umm...There's no way he would have unveiled the sports car unless he was worried about the perception of company prospects. I doubt they have anything even close to a prototype of the specs he's quoting, and the promotional materials online are all CGI.
Me also. And I'm in no hurry. Warren Buffet teaches the best holding period for a stock is forever. Whether or not any investor or investment group chooses to be a trader and buy and sell by the whims of the market or any other short term goal that is their business. So long as Tesla keeps pushing forward I'm in. Whether I get my M3 in 2018 or 2019 or even 2020 is OK by me.I am one of many small investors that is betting on Tesla's future. The first lot of shares I bought @ 38 and the second lot @ 35.
I can afford to hang on for sometime. I would even consider buying more IF it got below $200 at anytime in the future.
Next year will be hugh in terms of importance for Tesla's future.
I didn't say the whole thing is CGI. IMO the car they showed is some kind of rough prototype. I will look for the videos you are talking about.Umm...
They showed a car on stage, and spent a few hours giving people rides in it including a 0-60 run in less than 2 seconds. Lots of videos of both these things all over YouTube, so I'm confused how you think the whole thing is CGI...
++ Tesla has a large base of buyers and investors that are very happy, and many would be very happy even if their investments aren't super profitable. Sorta like contributing to a good cause ... So Tesla can burn through an enormous amount of cash ...Tesla is my favorite non-profit corporation....
LOL.....Tesla is my favorite non-profit corporation....
The quote applies to holding stock in profitable businesses that have sustainable and competitive advantages. Buffet isn't suggesting buying or holding stock in a company which isn't profitable and has no competitive advantages. That's why Warren Buffet isn't buying Tesla stock or lending it any money. If you're buying Tesla stock your adage would be: "The fools are dancing but the bigger fools are watching". Sometimes that works, but the first time I heard this adage was as justification for investing in tech stocks in 2000.Me also. And I'm in no hurry. Warren Buffet teaches the best holding period for a stock is forever. Whether or not any investor or investment group chooses to be a trader and buy and sell by the whims of the market or any other short term goal that is their business. So long as Tesla keeps pushing forward I'm in.
He's been saying this in one way or another for twenty years. At first it was his observation that if you took the badges off cars all the luxury car manufacturers would go out of business. This morphed into the idea that if you're "renting" a ride then the badges don't matter even if they are on the car. Makes perfect sense to me.Anyway, I've stopped listening to Bob since this: