Linked by Thom Holwerda on Wed 30th May 2018 15:38 UTC
In the News

Here's the dynamic that explains Musk's Twitter outburst: Tesla is clearly struggling to reach production levels that will justify its valuation. Musk has no facts with which to counter the media reports, and it is illegal for him to lie about these numbers. (Hype is one thing; lying to investors is another.) His Orwellian solution is to convince Tesla fans that what they are reading is not true. The stakes are high. Tesla's $1 billion-per-quarter burn rate makes it very likely that the company will need to raise a couple billion dollars in the fourth quarter of this year.

Musk literally cannot afford for investors to believe a negative storyline. Only his optimistic, visionary narrative will convince potential investors that Tesla is a good bet, rather than a bubble preparing to pop.

Nothing is more dangerous than criticizing Elon Musk, but the cold and harsh facts laid out in this article are very difficult to argue with, other than appealing to some vague sense of Musk wanting to help the planet or whatever, as if that negates Tesla rapidly running out of money and never meeting expectations or failing to keep its promises. We should all want Tesla to succeed, but the recent outbursts from Musk do not bode well for the future of the company.

Twitter randos who could never afford a Tesla might be easily swayed by Musk's Trumpian "boohoo the press hates me" nonsense, but the kinds of billion dollar investors Tesla needs will see right through it.

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RE[2]: Please
by leos on Wed 30th May 2018 23:05 UTC in reply to "RE: Please"
leos
Member since:
2005-09-21

If the financial fundamentals of Tesla's balance sheet changes for the better then that short interest will dwindle.

Can't fight cold hard numbers. If the company hasn't imploded now under debt, then at some point in the near future it will. Unless of course they raise capital.


Sure, but they have raised capital many times so far. Company says they won't need to, but even if they do, there is no indication that they won't be able to.

Reply Parent Score: 0

RE[3]: Please
by dukes on Wed 30th May 2018 23:44 in reply to "RE[2]: Please"
dukes Member since:
2005-07-06

"If the financial fundamentals of Tesla's balance sheet changes for the better then that short interest will dwindle.

Can't fight cold hard numbers. If the company hasn't imploded now under debt, then at some point in the near future it will. Unless of course they raise capital.


Sure, but they have raised capital many times so far. Company says they won't need to, but even if they do, there is no indication that they won't be able to.
"

With a net loss of $710 Million, I don't know where the capital will come from. They are bleeding almost a billion dollars a quarter. Not a good investment if you ask me.

Reply Parent Score: 3

RE[4]: Please
by leos on Thu 31st May 2018 17:39 in reply to "RE[3]: Please"
leos Member since:
2005-09-21

With a net loss of $710 Million, I don't know where the capital will come from. They are bleeding almost a billion dollars a quarter. Not a good investment if you ask me.


Sure, and i'm not investing. But the big picture is much more complex than that. Valuations are based on future expectations, not current situation. Clearly the market expects future profits from Tesla despite current losses.

Reply Parent Score: 0