4 ms·

What an oversimplification of my comment. I'll oversimplify it for you so you can't misinterpret it: "This decision he just made is poor and Elon is human just

What an oversimplification of my comment. I'll oversimplify it for you so you can't misinterpret it: "This decision he just made is poor and Elon is human just like everyone else"

djrogers 8y ago
> "This decision he just made is poor and Elon is human just like everyone else" How on earth could you possibly know that? It's entirely possible (likely) that not laying off those 3000 people would endanger the ability of Tesla to continue employing the other 30,000 people. Life (and business) is sometimes messy...
- stevievee 8y ago
  No, the company has been operating in the red forever. He is bowing to the public markets to make the company's life easier. It was never going to die if he kept these employees.
  - rdgthree 8y ago
    Wow, this is huge information. Can you link your source?
  - btilly 8y ago
    Those same public markets were recently trading at 87-88 cents on the dollar. (See http://markets.businessinsider.com/bonds/tesla_incdl-notes_201717-25_regs-bond-2025-usu8810laa18 http://markets.businessinsider.com/bonds/tesla_incdl-notes_2... for verification.) If the markets were assuming that they would recover half of what was owed in bankruptcy, that corresponds to about 1/4 odds of bankruptcy in the next few years. Given that historically markets have been more accurate than any individual commenter, the risk of bankruptcy was quite real. No matter how many Monday morning quarterbacks like you think otherwise.
    - stevievee 8y ago
      Sorry, to clarify I am talking equity. Please provide examples now. The snark in this thread is unbelievable.
      - btilly 8y ago
        Here is a quick explanation of how markets work, and why equity is the wrong thing to look at to answer the question asked. Equity prices give you a share in future success. They therefore predict expected future value, pro-rated by the odds of getting there. Bonds give you back money if the company remains in business, and nothing more. Therefore they represent a prediction of odds of going out of business, with no regard to how wonderful the possible upside in the company might be. Tesla's combination of high equity value and low bond value represents a company that has a real chance of becoming dominant in its sector, and also a good chance of cratering instead. You shouldn't invest in a company like that unless you understand why there is a real risk, and are willing to take it.
jblow 8y ago
Can you explain why the decision is poor? Because it results in fewer jobs (but still the same number of jobs Tesla had in early 2018)? Is number of jobs the only metric that determines whether a decision is good or bad? If so that would lead to an entire system of economics that is very different from the one economists know. So if you hold the secret to this vast trove of knowledge, you would be doing a disservice to humanity by not sharing your wisdom.
- stevievee 8y ago
  I gloss over it in another comment. You may be exaggerating with your sarcasm a bit.

What an oversimplification of my comment. I'll oversimplify it for you so you can't misinterpret it: "This decision he just made is poor and Elon is human just like everyone else"

djrogers 8y ago

> "This decision he just made is poor and Elon is human just like everyone else" How on earth could you possibly know that? It's entirely possible (likely) that not laying off those 3000 people would endanger the ability of Tesla to continue employing the other 30,000 people. Life (and business) is sometimes messy...

stevievee 8y ago
No, the company has been operating in the red forever. He is bowing to the public markets to make the company's life easier. It was never going to die if he kept these employees.
- rdgthree 8y ago
  Wow, this is huge information. Can you link your source?
- btilly 8y ago
  Those same public markets were recently trading at 87-88 cents on the dollar. (See http://markets.businessinsider.com/bonds/tesla_incdl-notes_201717-25_regs-bond-2025-usu8810laa18 http://markets.businessinsider.com/bonds/tesla_incdl-notes_2... for verification.) If the markets were assuming that they would recover half of what was owed in bankruptcy, that corresponds to about 1/4 odds of bankruptcy in the next few years. Given that historically markets have been more accurate than any individual commenter, the risk of bankruptcy was quite real. No matter how many Monday morning quarterbacks like you think otherwise.
  - stevievee 8y ago
    Sorry, to clarify I am talking equity. Please provide examples now. The snark in this thread is unbelievable.
    - btilly 8y ago
      Here is a quick explanation of how markets work, and why equity is the wrong thing to look at to answer the question asked. Equity prices give you a share in future success. They therefore predict expected future value, pro-rated by the odds of getting there. Bonds give you back money if the company remains in business, and nothing more. Therefore they represent a prediction of odds of going out of business, with no regard to how wonderful the possible upside in the company might be. Tesla's combination of high equity value and low bond value represents a company that has a real chance of becoming dominant in its sector, and also a good chance of cratering instead. You shouldn't invest in a company like that unless you understand why there is a real risk, and are willing to take it.

jblow 8y ago

Can you explain why the decision is poor? Because it results in fewer jobs (but still the same number of jobs Tesla had in early 2018)? Is number of jobs the only metric that determines whether a decision is good or bad? If so that would lead to an entire system of economics that is very different from the one economists know. So if you hold the secret to this vast trove of knowledge, you would be doing a disservice to humanity by not sharing your wisdom.

stevievee 8y ago
I gloss over it in another comment. You may be exaggerating with your sarcasm a bit.