Tesla has in excess of $11bn in debt; even if you could get the equity for nothing, an acquisition would still be extremely expensive - more than 25% of Ford's market cap.

I can't see a middle of the road outcome for Tesla; it'll either be wildly successful, or Musk will destroy it in the attempt.

Ford is in debt 154 billion as of 2017, with an unclear path to an electric future (other than Rivian's help). I'd be more worried about them making it in the next 5 years.

By what definition? The chance of bankruptcy over the next five years is undoubtedly higher for Tesla. I think you are grossly misrepresenting Ford's balance sheet:

https://www.marketwatch.com/investing/stock/f/financials/bal...

Tesla is valued in large part based on the kind of math you'd commonly see applied to a VC backed company three orders of magnitude smaller; multiplying a large payoff value by a small chance of success.

People are making a bet on it becoming a trillion dollar behemoth that snatches tons of market share from energy and automobile companies during the turbulent switch over to renewable energy.

If you're confident in their execution, it's worth it to have Tesla swing for the fences chasing this vision even if there's a large chance of failure. Assuming of course you have diversified - I think you'd have to have a screw loose to go all in.

This is wildly misleading. Ford's debt mostly comes from it's financing arm. The name of the game there is to borrow money at a low interest rate and lend it out at a high one. The more debt Ford has the more money its making.

you really think tesla has a better chance of surviving than ford in the next 5 years?

They both look good to me. Ford is taking all the right steps to transition while keeping their current product relevant.

Tesla has a clear path forward, they are just raising to start Model Y, Semi and Pickup production.

Yes.

Tesla is just alive because the crisis haven't arrived yet. As soon as a lot of investors hit the breaks, a lot of those companies will go away... or become profitable.

Still easily doable by Apple, if they only wanted to.

Apple could do it, sure. I personally think they're the most likely candidate of any potential acquirer.

But fundamentally, an acquisition of this nature is a simple build vs buy decision. In a situation where Tesla is ready to undergo a fire sale, its R&D will have already been cut to the bone.

If Tesla stagnates technically, "build" becomes infinitely more attractive; you're no longer desperately chasing a moving target, you're simply replicating what is known to work. Companies that can do this (as opposed to original R&D) are a dime a dozen.

If the company is still healthy, I just don't see who would have the means and motive to acquire it.

Doable by companies like Apple/Google, the issue is why would they do it? Their shareholders would not approve such transaction as it's just throwing your money into a furnace.

Doable by a lot of companies if they wanted to, I think the suggestion was that someone in the domain would make the acquisition, which seems much tougher a prospect.

Larry Ellison invested in TSLA. I would not want to see Oracle buy them.

Model 3 suddenly cost $1,000 per wheel and come with a mandatory $40k/year support package, but don't worry, your rep got you a sweet 7.5% discount on future services — and he's never heard of a director approving such an incredible discount.

Hmm maybe TSLA should leverage Oracle for corp. fleet sales :)

The product lineup is solid; even if they go bankrupt, the debt owners will simply wipe out the shareholders, prune away the less profitable parts of the business, and scale back the expensive R&D ambitions. The Model 3 will still be produced since the fixed costs are already paid.

(Not my view that they actually will go bankrupt. But failure due to overspending on fixed costs tends to work out differently than being unable to cover marginal costs.)

You're not, but you should ask yourself why people with the same views have been predicting failure since 2012.

I’m hoping they get out of building their own cars altogether. Sell the car manufacturing and focus on the infrastructure and important parts: charging network, drive train, battery packs, solar, and self-driving tech if that’s their goal. /armchair

I don't think they'll stop building their own cars. But I do think that partnering with other carmakers to produce powertrains for them is not a bad idea. They produced powertrains for the Smart EV and the Toyota Rav4 EV back in the day. Musk has hinted at partnering with utility van companies to electrify them.

As long as the cashflow is positive, from investors, the company will last.

I feel like "cashflow positive from investors" is a great title for a very snarky book about startups and SV culture.

"You Can't Run a Con Without Confidence"

“Cash-flow positive from investors” is a nonsensical concept. Investors invest because they expect a return. If cash flow, the real kind, is negative forever, eventually the investments will stop. Musk has delayed the reckoning for a while with showmanship, but it can’t go on forever.

Amazon had no profit for many years and here we are. Some could be told about Uber.

AFAIK Amazon had only a handful of unprofitable quarters in history. Even more important, Amazon was always cash-flow positive. Uber is a different story, so.

With Amazon we're comparing a web site that sells stuff they don't even make to an auto manufacturer, insanely capital intensive. It's quite a different bar. I realize you're just replying to someone who brought this up, but I'm not convinced comparisons make sense.

I do get your point, you cannot compare the two. Yet, every time Tesla's finances are brought up someone is repeating the false "Amazon lost money the whole time" statement. Which is wrong both on the P&L and cash flow side. And Tesla would be bankrupt already with their cash burn rate if it wasn't for Elon and his investor magic. But maybe they wouldn't have needed his magic without his other attics in the first place.

I believe the parent was making a joke.

What if tesla acquires a traditional car company instead and start adding auto pilot to gasoline powered cars too?