Tesla Worth More than Daimler

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st13phil

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When the market closed on Tuesday 4th December, Tesla’s market capitalisation crept slightly above that of Daimler.

So does this reflect true underlying value, or a market blinded by the emperor's new clothes?
 
A bit of both to be honest. There's more and more info coming out in support of Tesla's medium term strategy in particular their multiple Giga battery factories.

Their production levels may not equal Daimler currently, but the ramp-up of Model 3 shows tremendous determination and new car factories are being commenced in various parts of the globe.
 
Well Tesla survived this year by bringing in better than expected third quarter results,they need model 3 to fly off the shelves at $50,000 a pop,this company has a mountain of debt of all sorts,most of it tied to the motor side of this company,the next 18 months is going to be rough all over the world,it is not the time to be a company in debt up to the eyeballs,if they survive that they just might be able to move forward,would I invest in Tesla,no I would not,do I think they can survive no,about the only chance is if you run with they owe so much money they cannot be let to go down the pan,in western countries we still have at least 15 years of running diesel cars,in many other parts of the world they will maybe have 40 years to remove them,so debt and time scale are against this company.
 
Well Tesla survived this year by bringing in better than expected third quarter results,they need model 3 to fly off the shelves at $50,000 a pop,this company has a mountain of debt of all sorts,most of it tied to the motor side of this company,the next 18 months is going to be rough all over the world,it is not the time to be a company in debt up to the eyeballs,if they survive that they just might be able to move forward,would I invest in Tesla,no I would not,do I think they can survive no,about the only chance is if you run with they owe so much money they cannot be let to go down the pan,in western countries we still have at least 15 years of running diesel cars,in many other parts of the world they will maybe have 40 years to remove them,so debt and time scale are against this company.
Who do they owe a 'mountain of debt' to? They repaid all the money loaned by the US government before due date. So who do they supposedly owe mountains of cash to ?

They are making gross 25% on each Model 3 (more on Model S and Model X), producing 7000 per week and have waiting lists all around the world for their products. This is not a company that produces product and parks it in fields until sold, perhaps 12 months later.
 
Well they have convertible bonds,promissory notes,term loans,you name it they have it,this company is gigantic balancing act they might get away with it they may not.
 
is gigantic balancing act they might get away with it they may not.
Pundits have been saying this for the last 12 yrs - and they are bigger than ever and so far ahead of the game when it comes to batteries, solar and EV's - and they're only getting started !!!!!!!!!!!!!
 
Over the past two years Tesla took €1,000 per customer for pre-ordering the 3. And not a single 3 has been delivered yet.

One wonders how they show this in their books?

Of course taking payment in advance can make the balance sheet look great... see the Tesco directors trial that collapsed yesterday.

But are Tesla really doing as well as investors believe?
 
Over the past two years Tesla took €1,000 per customer for pre-ordering the 3. And not a single 3 has been delivered yet.

What, outside of USA and Canada?
I think that amount of money is insignificantly small in comparison to the overall amount involved.
 
Well Tesla has $10 billion worth of debts,they keep their rating that allows big investors to hold the shares because $3 billion of that debt is well in simple terms a gift that never needs to be repaid from the rocket side of the business,nobody doubts that we seem to be on a electric car heading,but when you get any company in lots of debt and needing to sell what they produce and people who buy what they make do not have to buy them,it starts to get risky,on this site how many of the car owners will buy and run a Tesla,before their cars will be crushed if they drive them down the road,possibly drivers shot at dawn for attempting to drive down the road in a conventional powered car,ok I joke,but the time scale in the western work is a long one,in many parts of the world it will be far later in bringing in laws to stop diesel cars running,so what happens when Tesla exhaust the people who like to be first or are so green they must have one of these cars,in a couple of years that pool will be used up,any fall in sales will magnify the debt structure of this company, and the next 18 months will be a hard one in world trade.
 
What, outside of USA and Canada?
I think that amount of money is insignificantly small in comparison to the overall amount involved.
Tesla said that the figure for Dec 2017 was 450,000 model 3 pre-orders, that's around half a billion USD taken ahead of actual sale. But I don't know how many more model 3 were ordered since Dec 2017, or if some of the older orders were cancelled.
 
Tesla said that the figure for Dec 2017 was 450,000 model 3 pre-orders, that's around half a billion USD taken ahead of actual sale. But I don't know how many more model 3 were ordered since Dec 2017, or if some of the older orders were cancelled.

There have been plenty delivered - Bloomberg - Are you a robot?
A colleague has been invited to see the Model 3 next month when it arrives in UK showrooms as he pre-ordered.
It appears that the pre-order money was spent on speeding up production which if you are desperate for one could easily be seen as money well spent.
How many other manufacturers could temp people to part with £/$/€1k for a pre-order on that scale?
I still don't think they are worth more than Daimler though in real terms.
 
There have been plenty delivered - Bloomberg - Are you a robot?
A colleague has been invited to see the Model 3 next month when it arrives in UK showrooms as he pre-ordered.
It appears that the pre-order money was spent on speeding up production which if you are desperate for one could easily be seen as money well spent.
How many other manufacturers could temp people to part with £/$/€1k for a pre-order on that scale?
I still don't think they are worth more than Daimler though in real terms.
I don't have an issue with Tesla's pre-ordering/downpayment business model, I am just wondering if this had a role in inflating the share price.
 
When the market closed on Tuesday 4th December, Tesla’s market capitalisation crept slightly above that of Daimler.

So does this reflect true underlying value, or a market blinded by the emperor's new clothes?
Somewhere in between - as you know Phil markets are mostly based on confidence and Tesla & Musk have that in spades so it remains to be seen if and when they make a real profit and not just stop haemorrhaging money.

And while ever there are people who worship at the altar of Musk then they’ll always be in with a chance!
 
Well of course Tesla have been shrewd they know that confidence is very important,and so we get the grandstand move of paying back a $400 million plus loan from the US government early,in terms of the total debt it was small beans,on the other hand we have the removal of subsidies for these electric cars,I have no doubt that given the way the world is going electric cars will run on our roads, I will not have one, the time scale will see me riding electric buses to where I want to go,I see the problem is many companies run debt they tend to have built this up growing the business over years,Tesla has a mountain of debt just to get production of these cars,they are not like say Samsung who could I imagine bring out a new phone in say 6 months from start to finish,and produce thousands very quickly to meet demand,with the worlds markets looking very sad at the moment Tesla is not where I would have any investment.
 
The Tesla market Capitalization figure could be interesting reading if they ever find credit harder to get as investors at the corporate end will have to adjust their holdings down due to risk calculations which could lead to a drop off in share values. Plus they will also be looking at the bonds issued, promissory notes to be repaid etc. etc. as they all trump ordinary share holders in terms of debt repayment ahead of dividends being paid if the balance sheet does not add up.

Interesting business model that Tesla has but many emerging "darlings" of the technology world have had very rude awakening when they get fully exposed to the markets and have to be run like a real business.
 
The latest news from the world of Tesla.

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All of a sudden that pile of rocks in Egypt looks useful....?

Where do I put the meter?
 
When the market closed on Tuesday 4th December, Tesla’s market capitalisation crept slightly above that of Daimler.
So does this reflect true underlying value, or a market blinded by the emperor's new clothes?

Share prices reflect the marginal value of shares sold in (relatively) small quantities. "Market capitalisation" is a bit of an illusion.

You would struggle to sell ALL Tesla shares at that price in one transaction. If offered, the market would reel and panic, particularly as it would suggest that key shareholders are pulling out. This issue is that the "goodwill" implied by that price is hard to transfer.

Look at Daimler, or the other car companies, and you find less "goodwill," implicit in the price, and a valuation closer to some kind of future cash flow, as well as a more realistic attitude towards physical facilities and assets.

Tesla will get sold, one day, to one of the existing car brands, for sure. But not at the current share price, certainly at some kind of discount, and on some kind of share swop deal.


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Tech share prices go down as well as up.....
 
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Tesla cars were always about tech transfer to Elon, not about making money. He wanted to prove the tech and pass it on even if he lost on the deal.

This is what I think he really enjoys....must create a very creative environment to work in rather than the same old hum drum.

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I am full of praise for the space x stuff,it is amazing,but Tesla is another thing entirely,I see the figures have come in and the market does not like them,I am on record that it is a accident waiting to happen.
 

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