4 ms·

Care to elaborate?

acover 10y ago
One way he profits is in the expectations of self driving cars. If people expect it in 3 years and it to be 10x better than humans [to quote musk] then there is huge value in any company that can provide it. Tesla has a market cap larger than Ford. Tesla also has been on the edge of bankruptcy every couple years and recently raised $1 billion in capital.
- graycat 10y ago
  Sounds like a good short selling opportunity.
  - unityByFreedom 10y ago
    Hard to time that kind of thing. Not worth it when you risk losing your shirt. You can lose an infinite amount of money shorting, whereas going long you might only lose all of what you put in.
    - jfoutz 10y ago
      don't options solve this? Buy a put at 50, watch it fall, then exercise. Doesn't work out, and you're only out the premium.
      - cglouch 10y ago
        Options solve it in the sense that you limit your downside, but you can still very well lose your premium. Even if you're 100% convinced that $TSLA is overvalued, markets can remain irrational longer than you can remain solvent, and your puts may very well expire worthless.
        jfoutz 10y ago
        Well, yes. But that's a different thing than the infinite risk of a naked short.
    - graycat 10y ago
      Yup. But it may be that some people with enough information and time to watch the stock and relevant data on it literally second by second could make a killing. And some people might be in a position to influence the time of the turning point and stimulate an avalanche of a fall. Broadly, no way do I believe that many people, not even fleets, especially not individuals, will put up with the charging time of a battery powered car. It's just so darned much more convenient to fill up a 20 gallon tank with gasoline. My guess is that the promise of electric cars was boosted by both the anti-fossil fuel push and the self-driving push. IMHO, with Trump, the anti-fossil fuel people just lost, big time, for a long time. E.g., we won't have carbon taxes, the theme will be "drill, baby, drill", and US gasoline prices are on the way down. For self-driving, my view is that the lawyers will make the insurance rates too high and more lawyers will pass some very restrictive laws. Then self-driving will be for some special cases and/or will need a lot of highway engineering that will take a lot of time and money and won't happen for years. For more, no way can Tesla do something significant that GM, Ford, Chrysler, Toyota, Honda, BMW, MB, Kia, etc. can't do just as well or better. E.g., there were electric cars ~100 years ago, and the story has been the same since then or as a Ford exec once said "You build me a good battery, and I will build you a good electric car." For a while there was some hope for a capacitor, which can be charged as fast as the electric power connection permits, but that approach seems to have flopped. Finally, I'm guessing that Musk has had a lot of subsidies, and I have to guess that Trump will turn off that faucet. Net, I see no real hope for Tesla. IMHO, Tesla is going down, soon. So, some smart and/or lucky short sellers stand to make a bundle.
      - prvnsmpth 10y ago
        > Broadly, no way do I believe that many people, not even fleets, especially not individuals, will put up with the charging time of a battery powered car. It's just so darned much more convenient to fill up a 20 gallon tank with gasoline. This may not hold true in the near future. With charging stations capable of putting out 350kW, we will have drastically reduced charging times. [0] > Finally, I'm guessing that Musk has had a lot of subsidies, and I have to guess that Trump will turn off that faucet. Actually, Tesla doesn't lose much if ZEV credits go away... In fact, the way things stand, other auto manufacturers are able to fully monetize their ZEV credits, while Tesla only makes 50 cents on the dollar. [1] [0] - https://electrek.co/2016/12/26/tesla-supercharger-v3-zev-credits https://electrek.co/2016/12/26/tesla-supercharger-v3-zev-cre... [1] - http://www.businessinsider.com/elon-musk-trump-decision-on-electric-car-incentives-wont-hurt-tesla-2016-11 http://www.businessinsider.com/elon-musk-trump-decision-on-e...
  - backpropaganda 10y ago
    Not necessarily. Just because that one thread of AI hype won't work out, doesn't mean the whole company won't work out.
- nradov 10y ago
  Tesla funding is driven more by proven demand for the product (huge order backlog with paid deposits) than any belief in autonomous vehicle technology. That plus historically low interest rates which have caused investors to do silly things in search of higher returns.
  - deleted 10y ago
    [deleted]
  - unityByFreedom 10y ago
    > huge order backlog with paid deposits fully refundable deposits, whose quantity hasn't been disclosed since very early on
unityByFreedom 10y ago
What acover said plus OpenAI is a way for Musk to network in the AI space and recruit more talent to his self-driving program.

Care to elaborate?

One way he profits is in the expectations of self driving cars. If people expect it in 3 years and it to be 10x better than humans [to quote musk] then there is huge value in any company that can provide it. Tesla has a market cap larger than Ford. Tesla also has been on the edge of bankruptcy every couple years and recently raised $1 billion in capital.

graycat 10y ago
Sounds like a good short selling opportunity.
- unityByFreedom 10y ago
  Hard to time that kind of thing. Not worth it when you risk losing your shirt. You can lose an infinite amount of money shorting, whereas going long you might only lose all of what you put in.
  - jfoutz 10y ago
    don't options solve this? Buy a put at 50, watch it fall, then exercise. Doesn't work out, and you're only out the premium.
    - cglouch 10y ago
      Options solve it in the sense that you limit your downside, but you can still very well lose your premium. Even if you're 100% convinced that $TSLA is overvalued, markets can remain irrational longer than you can remain solvent, and your puts may very well expire worthless.
      - jfoutz 10y ago
        Well, yes. But that's a different thing than the infinite risk of a naked short.
  - graycat 10y ago
    Yup. But it may be that some people with enough information and time to watch the stock and relevant data on it literally second by second could make a killing. And some people might be in a position to influence the time of the turning point and stimulate an avalanche of a fall. Broadly, no way do I believe that many people, not even fleets, especially not individuals, will put up with the charging time of a battery powered car. It's just so darned much more convenient to fill up a 20 gallon tank with gasoline. My guess is that the promise of electric cars was boosted by both the anti-fossil fuel push and the self-driving push. IMHO, with Trump, the anti-fossil fuel people just lost, big time, for a long time. E.g., we won't have carbon taxes, the theme will be "drill, baby, drill", and US gasoline prices are on the way down. For self-driving, my view is that the lawyers will make the insurance rates too high and more lawyers will pass some very restrictive laws. Then self-driving will be for some special cases and/or will need a lot of highway engineering that will take a lot of time and money and won't happen for years. For more, no way can Tesla do something significant that GM, Ford, Chrysler, Toyota, Honda, BMW, MB, Kia, etc. can't do just as well or better. E.g., there were electric cars ~100 years ago, and the story has been the same since then or as a Ford exec once said "You build me a good battery, and I will build you a good electric car." For a while there was some hope for a capacitor, which can be charged as fast as the electric power connection permits, but that approach seems to have flopped. Finally, I'm guessing that Musk has had a lot of subsidies, and I have to guess that Trump will turn off that faucet. Net, I see no real hope for Tesla. IMHO, Tesla is going down, soon. So, some smart and/or lucky short sellers stand to make a bundle.
    - prvnsmpth 10y ago
      > Broadly, no way do I believe that many people, not even fleets, especially not individuals, will put up with the charging time of a battery powered car. It's just so darned much more convenient to fill up a 20 gallon tank with gasoline. This may not hold true in the near future. With charging stations capable of putting out 350kW, we will have drastically reduced charging times. [0] > Finally, I'm guessing that Musk has had a lot of subsidies, and I have to guess that Trump will turn off that faucet. Actually, Tesla doesn't lose much if ZEV credits go away... In fact, the way things stand, other auto manufacturers are able to fully monetize their ZEV credits, while Tesla only makes 50 cents on the dollar. [1] [0] - https://electrek.co/2016/12/26/tesla-supercharger-v3-zev-credits https://electrek.co/2016/12/26/tesla-supercharger-v3-zev-cre... [1] - http://www.businessinsider.com/elon-musk-trump-decision-on-electric-car-incentives-wont-hurt-tesla-2016-11 http://www.businessinsider.com/elon-musk-trump-decision-on-e...
- backpropaganda 10y ago
  Not necessarily. Just because that one thread of AI hype won't work out, doesn't mean the whole company won't work out.
nradov 10y ago
Tesla funding is driven more by proven demand for the product (huge order backlog with paid deposits) than any belief in autonomous vehicle technology. That plus historically low interest rates which have caused investors to do silly things in search of higher returns.
- deleted 10y ago
  [deleted]
- unityByFreedom 10y ago
  > huge order backlog with paid deposits fully refundable deposits, whose quantity hasn't been disclosed since very early on

unityByFreedom 10y ago

What acover said plus OpenAI is a way for Musk to network in the AI space and recruit more talent to his self-driving program.