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Ford and Tesla's market cap are about the same at $40 billion, yet Ford's total liabilities are ten times Tesla's: https://www.macrotrends.net/stocks/charts/F/f

by thrill 8y ago

Ford and Tesla's market cap are about the same at $40 billion, yet Ford's total liabilities are ten times Tesla's: https://www.macrotrends.net/stocks/charts/F/ford-motor/total-liabilities https://www.macrotrends.net/stocks/charts/F/ford-motor/total... That doesn't mean Ford is ten times as likely to go under - indeed the market cap's being the same means that buyers and sellers generally believe that Ford can carry ten times as much debt as Tesla with about the same risk.

bryanlarsen 8y ago
"Enterprise Value", which includes debt, is a much more accurate measure of a company's size than market cap. By that measure, Ford's Enterprise Value is $190B vs Tesla's $50B. Ford's sales are about 7.5X Tesla, and it's EV is about 4X Tesla. Tesla's financials and market cap are not completely out of whack when compared to other car companies.
- dragontamer 8y ago
  > Tesla's financials Tesla has literally never made a yearly profit in its life. Tesla hasn't even had positive yearly cash-flow for its entire life. The best Tesla ever got was Q3 / Q4 2018, a very modest profit of a couple hundred-million dollars. But this was very quickly wiped out by Q1 2019 with a $700 Million loss and $1.4 Billion negative cash flow. Tesla's financials are a complete disaster. Tesla's stock price has absolutely no bearing on its financials. Investors are chasing Tesla's future, they're hooked onto its story and 10-year plan. Tesla investors always ignore the finances of today.
  - vtail 8y ago
    Can you apply the same logic to Uber/Lyft?
    - dragontamer 8y ago
      Yes, but Uber / Lyft loses less money than Tesla. So Uber / Lyft will fail at a later date than Tesla will fail. Note that Uber/Lyft can potentially become profitable by simply raising prices, but there's no easy way for Tesla to raise prices. (In fact, they haven't really deployed the promised $35,000 M3 yet in wide numbers. Tesla's customers are still expecting price cuts... to get to the $35k number)

by thrill 8y ago

bryanlarsen 8y ago

"Enterprise Value", which includes debt, is a much more accurate measure of a company's size than market cap. By that measure, Ford's Enterprise Value is $190B vs Tesla's $50B. Ford's sales are about 7.5X Tesla, and it's EV is about 4X Tesla. Tesla's financials and market cap are not completely out of whack when compared to other car companies.

dragontamer 8y ago
> Tesla's financials Tesla has literally never made a yearly profit in its life. Tesla hasn't even had positive yearly cash-flow for its entire life. The best Tesla ever got was Q3 / Q4 2018, a very modest profit of a couple hundred-million dollars. But this was very quickly wiped out by Q1 2019 with a $700 Million loss and $1.4 Billion negative cash flow. Tesla's financials are a complete disaster. Tesla's stock price has absolutely no bearing on its financials. Investors are chasing Tesla's future, they're hooked onto its story and 10-year plan. Tesla investors always ignore the finances of today.
- vtail 8y ago
  Can you apply the same logic to Uber/Lyft?
  - dragontamer 8y ago
    Yes, but Uber / Lyft loses less money than Tesla. So Uber / Lyft will fail at a later date than Tesla will fail. Note that Uber/Lyft can potentially become profitable by simply raising prices, but there's no easy way for Tesla to raise prices. (In fact, they haven't really deployed the promised $35,000 M3 yet in wide numbers. Tesla's customers are still expecting price cuts... to get to the $35k number)