4 ms·

One factor: At least a couple of major investment banks, along with many other commentators, see Musk's apparently good relationship with President Trump as a r

One factor: At least a couple of major investment banks, along with many other commentators, see Musk's apparently good relationship with President Trump as a reason to invest in Tesla. Of course, nobody can say how much it affects their market capitalization, but just the banks saying it will be self-fulfilling to an (unknown) extent. Musk wouldn't be the first to use lobbying to help his business, and so far (a small sample) Trump has used his power much more than past presidents to help and punish businesses he favors/disfavors (e.g., threatening businesses that want to relocate factories, threatening airplane manufacturers, tweeting favorable and unfavorable things about businesses, etc.). Trump has a reputation for corruption, that's factual; that doesn't tell us how true it is or how it applies in this kind of situation or in this particular case. What I'm trying to say is, let's be careful with the facts. If you search for 'musk trump', you can find plenty of discussion of it. Here's one article from a good source: https://www.nytimes.com/2017/01/26/business/elon-musk-donald-trump-wall-street.html https://www.nytimes.com/2017/01/26/business/elon-musk-donald...

ww520 9y ago
Unless the government buys from Tesla, Trump's help won't matter much to investors. In the case of a bailout, investor equity is the first thing destroyed. Trump would certainly help Tesla to survive in such an event, but for investors, its' better to buy after that than before.
- hackuser 9y ago
  Good points; I wonder what the investment banks saw. Certainly Tesla depends on government laws, regulations and policy, especially as a new entrant seeking widespread changes in several regulated industries. For example, they want electric charging stations spread nationwide, they'd probably like fossil fuels to become more expensive or at least become less subsidized, subsidies for electric cars, regulators to not delay or limit Tesla innovations, etc. etc. Also, government does R&D on battery tech, I'm pretty sure. Does anyone know how much Tesla directly or indirectly benefits? Finally, they may want to sell to government; fleets of large organizations often are good customers for alternative fuels, because (AFAIK) they can provide and support their own infrastructure. But that is speculative (as is investing!).

ww520 9y ago

Unless the government buys from Tesla, Trump's help won't matter much to investors. In the case of a bailout, investor equity is the first thing destroyed. Trump would certainly help Tesla to survive in such an event, but for investors, its' better to buy after that than before.

hackuser 9y ago
Good points; I wonder what the investment banks saw. Certainly Tesla depends on government laws, regulations and policy, especially as a new entrant seeking widespread changes in several regulated industries. For example, they want electric charging stations spread nationwide, they'd probably like fossil fuels to become more expensive or at least become less subsidized, subsidies for electric cars, regulators to not delay or limit Tesla innovations, etc. etc. Also, government does R&D on battery tech, I'm pretty sure. Does anyone know how much Tesla directly or indirectly benefits? Finally, they may want to sell to government; fleets of large organizations often are good customers for alternative fuels, because (AFAIK) they can provide and support their own infrastructure. But that is speculative (as is investing!).