<story><title>Tesla opens the Model 3 reservation floodgates</title><url>https://techcrunch.com/2018/06/28/tesla-opens-model-3-reservations/</url></story><parent_chain><item><author>catherinezng</author><text>Tesla lost ~$2B last year, owes ~$10B in debt, and owes &amp;gt;$400M in interest payments per year alone.&lt;p&gt;Moody’s downgraded Tesla’s bond rating because Tesla will need to raise more money this year, at least $2B (which is an extremely conservative figure), to avoid Chapter 11 bankruptcy.&lt;p&gt;Elon Musk also owes &amp;gt;$600M in personal debt that he financed using Tesla stock as collateral. This means that if Tesla stock dips below around $233&amp;#x2F;share, Musk would face a margin call (sell Tesla stock, driving stock prices lower), or put down more Tesla stock as collateral to fund his debt.&lt;p&gt;By the way, 90% of the Boring company’s funds come from Elon Musk himself, possibly funded by this personal debt.&lt;p&gt;Other red flags are that shareholders sued Tesla board members for breaching their fiduciary duties by allowing Tesla to acquire Solar City, assuming an extra ~$3B in debt; and Tesla’s CFO Jason Wheeler left Tesla in 2017 with over half of his stock left to vest.&lt;p&gt;The reason people are shorting Tesla is that beyond Elon Musk’s cult of personality, the numbers don’t add up. Tesla will need to raise more money this year to survive.&lt;p&gt;Feel free to fact check all of this.</text></item><item><author>jillesvangurp</author><text>The way I see it, logistics aside, Tesla has awesome cars that are loved by those that manage to get one delivered, customers are actually lining up to buy them to the extent of paying just to get in line for that years ahead of time, and they are pretty much guaranteed to sell anything they ship for the foreseeable future.&lt;p&gt;Better still most of their would be competitors are either not shipping at all right now, years away from shipping at scale, just plain not even bothering to compete, or shipping limited volumes of not so great products, and generally being vague about timelines, volumes, etc. On top of that they and are struggling with over production of vehicles based on legacy petrol&amp;#x2F;diesel technology.&lt;p&gt;E.g. the Germans are doing a lot of hand waving around maybe shipping some electric cars in the next decade while the likes of BMW continue to ship seriously underwhelming electric cars. Ford just discontinued a lot of their petrol sedans. And diesel gate continues to impact most manufacturers involved with basically anything Diesel based.&lt;p&gt;The way I see it, Tesla will be essentially unchallenged for the next 2-3 years. That&amp;#x27;s a lot of time to get on top of some simple logistics. And that&amp;#x27;s assuming the existing car manufacturers actually get their act together. IMHO, most of them are at far bigger risk of bankruptcy than Tesla since they&amp;#x27;ll be bogged down in demand issues, layoffs, and restructurings for the next few decades.&lt;p&gt;I don&amp;#x27;t see the logistical situation as something that can&amp;#x27;t be resolved by Tesla. Kind of silly to short Tesla under the assumption that this won&amp;#x27;t be solved; cannot be solved; and that Tesla will perpetually be unable to solve this. The argument seems to be that it is simply impossible to produce the vehicles for Tesla.&lt;p&gt;If the latest rumors are to be believed, they are pretty much close to the promised rate of 5K cars&amp;#x2F;week. At 50K price (conservative) that means 250M per week in revenue, or 1 Billion per month. That sounds like a decent business to me. I&amp;#x27;m assuming they are not stopping at 5K per week.</text></item></parent_chain><comment><author>sdhgaiojfsa</author><text>OK, all of this is true, and concerning to me, despite that I would never buy a Tesla (when there are perfectly good used Nissan Leafs out there!). This is part of the reason I never invest in individual stocks: I have no tolerance for the risk, and no confidence that I can interpret all these facts to come up with a coherent estimate of whether the price will go up or down.&lt;p&gt;I guess my question right now is: if the situation is so dire, and the facts are all out there, why is TSLA not priced lower? Is it that there&amp;#x27;s enough dumb money holding&amp;#x2F;buying it propping up the price? Or are investors confident in Musk&amp;#x27;s ability to raise money and eventually turn the corner? Or something else entirely?</text></comment>
<story><title>Tesla opens the Model 3 reservation floodgates</title><url>https://techcrunch.com/2018/06/28/tesla-opens-model-3-reservations/</url></story><parent_chain><item><author>catherinezng</author><text>Tesla lost ~$2B last year, owes ~$10B in debt, and owes &amp;gt;$400M in interest payments per year alone.&lt;p&gt;Moody’s downgraded Tesla’s bond rating because Tesla will need to raise more money this year, at least $2B (which is an extremely conservative figure), to avoid Chapter 11 bankruptcy.&lt;p&gt;Elon Musk also owes &amp;gt;$600M in personal debt that he financed using Tesla stock as collateral. This means that if Tesla stock dips below around $233&amp;#x2F;share, Musk would face a margin call (sell Tesla stock, driving stock prices lower), or put down more Tesla stock as collateral to fund his debt.&lt;p&gt;By the way, 90% of the Boring company’s funds come from Elon Musk himself, possibly funded by this personal debt.&lt;p&gt;Other red flags are that shareholders sued Tesla board members for breaching their fiduciary duties by allowing Tesla to acquire Solar City, assuming an extra ~$3B in debt; and Tesla’s CFO Jason Wheeler left Tesla in 2017 with over half of his stock left to vest.&lt;p&gt;The reason people are shorting Tesla is that beyond Elon Musk’s cult of personality, the numbers don’t add up. Tesla will need to raise more money this year to survive.&lt;p&gt;Feel free to fact check all of this.</text></item><item><author>jillesvangurp</author><text>The way I see it, logistics aside, Tesla has awesome cars that are loved by those that manage to get one delivered, customers are actually lining up to buy them to the extent of paying just to get in line for that years ahead of time, and they are pretty much guaranteed to sell anything they ship for the foreseeable future.&lt;p&gt;Better still most of their would be competitors are either not shipping at all right now, years away from shipping at scale, just plain not even bothering to compete, or shipping limited volumes of not so great products, and generally being vague about timelines, volumes, etc. On top of that they and are struggling with over production of vehicles based on legacy petrol&amp;#x2F;diesel technology.&lt;p&gt;E.g. the Germans are doing a lot of hand waving around maybe shipping some electric cars in the next decade while the likes of BMW continue to ship seriously underwhelming electric cars. Ford just discontinued a lot of their petrol sedans. And diesel gate continues to impact most manufacturers involved with basically anything Diesel based.&lt;p&gt;The way I see it, Tesla will be essentially unchallenged for the next 2-3 years. That&amp;#x27;s a lot of time to get on top of some simple logistics. And that&amp;#x27;s assuming the existing car manufacturers actually get their act together. IMHO, most of them are at far bigger risk of bankruptcy than Tesla since they&amp;#x27;ll be bogged down in demand issues, layoffs, and restructurings for the next few decades.&lt;p&gt;I don&amp;#x27;t see the logistical situation as something that can&amp;#x27;t be resolved by Tesla. Kind of silly to short Tesla under the assumption that this won&amp;#x27;t be solved; cannot be solved; and that Tesla will perpetually be unable to solve this. The argument seems to be that it is simply impossible to produce the vehicles for Tesla.&lt;p&gt;If the latest rumors are to be believed, they are pretty much close to the promised rate of 5K cars&amp;#x2F;week. At 50K price (conservative) that means 250M per week in revenue, or 1 Billion per month. That sounds like a decent business to me. I&amp;#x27;m assuming they are not stopping at 5K per week.</text></item></parent_chain><comment><author>prostoalex</author><text>&amp;gt; shareholders sued Tesla board members for breaching their fiduciary duties&lt;p&gt;Starting a lawsuit is easy. What’s under-reported is how many of such lawsuits are won.</text></comment>