Then he shouldn't be the CEO of a public company which continues to sell stock and debt to investors on the promise of a return.
Also, Elon Musk very much does care about returns. He has a great track record in that department. He's just learned it's not something that's healthy to focus on in the short-term. Unfortunately, running out of cash forces the compression of time horizons. The latter is what investors are rightfully worried about.
For what it's worth, I agree that the post was ridiculous - Musk's behaviour is dumb and with every week that goes by I expect reality to catch up with him more and more. But I don't think the HN community should be flagging and killing posts for being naive and un-business-like. I struggle to identify what rule was broken there, and (supposedly) west coast "money is free" bias is not a good reason to suppress someone's post from being visible.
And it's not that simple that he can just raise debt or equity if Tesla's stock starts tanking. There aren't billions of dollars out there to be invested or loaned to money losing companies whose stock price is tanking. If come Q4 Tesla is having to raise money at a lower valuation, it becomes even more difficult to see the path to success.
Tesla has been thoroughly analyzed every which way, moreso than other companies. Really there is no end to the amount of info that Wall St wants, everyone is trying to make a buck and wall st senses the hype.
>There aren't billions of dollars out there to be invested or loaned to money losing companies whose stock price is tanking.
Tesla is public. Yes there is. Just depends on whether you can stomach the risk.
Why wouldn’t Musk release a detailed plan of what is going to materially change in their production goals and capital expenditures over the next sixth months in order to finance their debt? Explain the process for how the make their projections and pronouncements? Explain why it is prudent to invest in multiple new models and production lines when his company is burning through $4 billion a year and can’t meet current production targets? Why doesn’t he explain how many of the 500,000 Model 3 deposits remain, given that at current production rates that will take almost a decade to meet? Why doesn’t he provide monthly sales figures like every other automaker?
> Tesla is public. Yes there is. Just depends on whether you can stomach the risk.
You understand that greater risk necessitate the possibility of greater return, right? What interest rate is it going to have to be paying on debt it raises? TSLA bonds are already at 8% interest, in junk bond territory.
If financials deteriorate further is he paying 10%? 12%?
In that situation how much of Tesla’s revenue is just going to be eaten up paying interest on the $10 billion in debt it currently has, plus an additional capital raise? That makes the cash flow issues even worse.
If Tesla raises equity, how much of a hair cut does the enterprise value take? With the amount of debt it currently has, it doesn’t take much before you start thinking insolvency.
Society is PLAGUED with people who can't see any subject outside the lens of money. It's all people think about, it's disgusting.
Tesla's CEO is an engineer first and foremost. He doesn't give a s* if a worthless day trader doesn't know how to position. If the company dips into unforeseen debt while ramping up production, whoops.
They're pushing cars that will contribute to a sustainable future, that's what important here.
Tesla will still be fine in the long run. Tesla cars are still high in demand. You still have to wait weeks/months to receive one.
Sorry to all the vampires who don't know how to make a quick buck.
I'm sorry, but when trying to value an investment, or determining whether I should make a loan, I think the lens of money is important. There's a reason people form corporations rather than charities. Corporations are able to fund themselves sustain driving new things year over year. Charities finish when the money runs out.
What is Musk trying to build if it isn't a sustainable corporation?
> Tesla's CEO is an engineer first and foremost. He doesn't give a s* if a worthless day trader doesn't know how to position. If the company dips into unforeseen debt while ramping up production, whoops.
This sort of flippant comment is naive. You don't think the employees whose stock is vesting in the company care about how it is going to be valued or fund itself in the future? If I'm a talented engineer, why should I work for Tesla if the stock the grant me could be worthless in 6 months? Or what about those on the production lines, worrying about whether their factory might close down?
If you care so much about the company's ambition, you should care about their financial situation. Without it, they aren't going to be able to do any real research and development, hire the best talent, or do any of the basic functions necessary to make electric cars in the future.
> They're pushing cars that will contribute to a sustainable future, that's what important here.
If you care about that, you should care about the company actually having a financial plan to achieve those goals.
> Tesla will still be fine in the long run.
Why? Without answering the financial questions I described above, there isn't any way to predict that accurately.
> Tesla cars are still high in demand. You still have to wait weeks/months to receive one.
That's less of an issue with demand than an issue of supply. Tesla is struggling to put out 4000 cars a week, and there's a Ford F-150 sold every minute in the United States.
> Sorry to all the vampires who don't know how to make a quick buck.
I'm sorry you believe that those who care about Tesla's financial situation are just trying "to make a quick buck". To build the future, you first have to fund it.
Tesla is doing fine. If you don't think the stock is worth it, don't buy it. There are plenty of other companies out there that need funding.
At some point you have to stop worrying about the monthly cash flow and believe in the product, although if you view everything through the lens of money I doubt that's possible.
Tesla may survive, as there seems to be no end of people bad at math, but a company doesn't burn through a billion per quarter for too long before "fine" is no longer the correct word.
Tesla may not be fine. One ought not to go out of one's way to bite the hand that feeds one.
Wall Street acts as a leaky pipe funneling money between investors and Tesla.
If such a thing existed that would bring in the amount of money to Tesla that it has needed, it would.
There are elderly people with their futures invested, pension funds that will pay people's bills, etc. Tesla really should answer the questions of its owners.
I am so sick of the cult of Elon. There is no defending his behaviour here.
What he's done is remarkable. But he should step down, assign himself a founder/chief scientist title, and move forward with "fixing" his company. No fear of ejection; I suspect he's a major shareholder.
A crazy high valuation is no guarantee that a company can not go bust at some point, though in Tesla's case if they run out of money all that will likely happen is that their next round will be one at a lower valuation and with a group of investors that cares less about the short term.
Elon made the decision to play on Wall Street, that decision comes with some responsibilities and it is downright strange to see him literally bite the hand that feeds him. Without the cash he picked up through the IPO Tesla would be in a completely different position. He's made a couple of boneheaded moves (such as rolling Solar City in with Tesla), which have so far been accepted because of the halo and the promises. But there is a limit to how far that will stretch and I'm confused why he would stretch that on purpose if he has other alternatives (such as simply answering the questions). If he doesn't have any answers, which is one way to interpret his refusal, then Tesla is already in trouble.
No matter what he does he'll more than likely be fine on the money side.