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Musk has done amazing things but his amazing ability to take risk and leverage is something that prevents me from investing into his business. The tech he is bu

Musk has done amazing things but his amazing ability to take risk and leverage is something that prevents me from investing into his business. The tech he is business develops is here to stay but investors may not get the return they want. There is endless stream of new ideas while not delivering fully on the old ideas (for the investors). Tesla bet it's financial future into being able to mass produce Model 3 profitably in large quantities. The amount of debt Tesla has prevents them from retreating into smaller scale luxury cars. When Model 3 is in trouble, lets move to the taxi-scheme. They have to dilute the stocks again and again and current owners see less of the (possible) future profits. There will be some kind of economic slowdown or correction in the next few years. Tesla has maybe one more financing round left until the music stops.

martythemaniak 7y ago
Tesla has gone ~15x since IPO. Unlike virtually every other tech-related IPO, it was possible for retail investors to invest in a risky, growth-oriented company. They IPO'ed at a 2.2B cap, meanwhile all major tech-related IPOs seem to be about 10B. If you're a retail investor looking for high risk/high reward stocks, Tesla was a rare exception. In most other cases, only large funds have access to growth companies like that. I'd like to see more IPOs like Tesla's, rather than reserving wealth growth only for those with tons of money. In short, if you're not interested in taking advantage of an option, don't assume other people think the same way. Also, the robotaxi is not some zany idea Musk randomly came up. It's been publicly on their website for 3 years now and in their internal road maps for long before that: https://www.tesla.com/en_CA/blog/master-plan-part-deux https://www.tesla.com/en_CA/blog/master-plan-part-deux It's really bizarre to see the constant condemnation of Musk, because he chooses to have an ambitions long-term plan and follow through with it.
- Nokinside 7y ago
  If you a retail investor looking for high risk/high reward stocks, Tesla today is not what Tesla was during IPO. The need for more money and future stock dilution means that risk is significantly higher but reward is going to be lower.
  - erikpukinskis 7y ago
    > risk is significantly higher but reward is going to be lower. Is that not true for all companies as they grow?
    - freeone3000 7y ago
      No; Microsoft (for instance) today is much less riskier than Microsoft in 1988. It likely won't experience meteoric growth, but neither is it likely to crash tomorrow. Ideally, risk/reward are inversely correlated.
  - martythemaniak 7y ago
    Well, you claimed he has not delivered for investors because he has not executed well on his plans. Tesla's plans have been on their website since 2006: https://www.tesla.com/en_CA/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/en_CA/blog/secret-tesla-motors-master-... Tesla has executed very well on those plans and delivered very handsomely for investors. Now you're saying, today they are different. Are they? Or is it just simple 20/20 hindsight? Did you happen to invest at $17 and sell at $350? There was even more skepticism of them before their IPO (ie, the famous "Tesla Death Watch" series from 2008) and I think they were in a far, far more precarious position back then.
- fossuser 7y ago
  I also invested early for similar reasons. Though seeing what Tesla constantly has to deal with, if I was ever in a position to decide to IPO in the future I’d want to stay private for as long as possible.
- adventured 7y ago
  > meanwhile all major tech-related IPOs seem to be about 10B. I have some notable counters to that premise. Square, $31.3 billion market cap. At IPO ~$5 billion. Shopify, $27.8 billion market cap. At IPO ~$3 billion (already 9x after four years). Splunk, $20 billion market cap. At IPO ~$5 billion. Palo Alto Networks, $23.7 billion market cap. At IPO ~$5 billion. Fortinet, $15.8 billion market cap. At IPO $1.5 billion. ServiceNow, $50.3 billion market cap. At IPO ~$4.5 billion. Atlassian, $26.5 billion market cap. At IPO ~$6.5 billion. Twilio, $16.5 billion market cap. At IPO ~$4.5 billion. Zendesk, $9.3 billion market cap. At IPO ~$1.7 billion. Salesforce.com, $127 billion market cap. At IPO ~$3 billion. It hit 15x in about the same time as Tesla. Netflix, $167 billion market cap. At IPO... a couple hundred million dollars. It hit 15x in eight years. This and CRM reach back a ways now, however you still could have easily purchased NFLX for sub $10 / share as recently as 2012. And there are a bunch of tech-related companies that may yet produce 15x style net post IPO returns in the coming years. Such as HubSpot, which has a $7.6b market cap, versus ~$1.2b at IPO in 2014. Could have picked up ETSY at $7 / share (sub $900m market cap) well after its IPO, now $68 ($8.1b market cap).

martythemaniak 7y ago

Tesla has gone ~15x since IPO. Unlike virtually every other tech-related IPO, it was possible for retail investors to invest in a risky, growth-oriented company. They IPO'ed at a 2.2B cap, meanwhile all major tech-related IPOs seem to be about 10B. If you're a retail investor looking for high risk/high reward stocks, Tesla was a rare exception. In most other cases, only large funds have access to growth companies like that. I'd like to see more IPOs like Tesla's, rather than reserving wealth growth only for those with tons of money. In short, if you're not interested in taking advantage of an option, don't assume other people think the same way. Also, the robotaxi is not some zany idea Musk randomly came up. It's been publicly on their website for 3 years now and in their internal road maps for long before that: https://www.tesla.com/en_CA/blog/master-plan-part-deux https://www.tesla.com/en_CA/blog/master-plan-part-deux It's really bizarre to see the constant condemnation of Musk, because he chooses to have an ambitions long-term plan and follow through with it.

Nokinside 7y ago
If you a retail investor looking for high risk/high reward stocks, Tesla today is not what Tesla was during IPO. The need for more money and future stock dilution means that risk is significantly higher but reward is going to be lower.
- erikpukinskis 7y ago
  > risk is significantly higher but reward is going to be lower. Is that not true for all companies as they grow?
  - freeone3000 7y ago
    No; Microsoft (for instance) today is much less riskier than Microsoft in 1988. It likely won't experience meteoric growth, but neither is it likely to crash tomorrow. Ideally, risk/reward are inversely correlated.
- martythemaniak 7y ago
  Well, you claimed he has not delivered for investors because he has not executed well on his plans. Tesla's plans have been on their website since 2006: https://www.tesla.com/en_CA/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/en_CA/blog/secret-tesla-motors-master-... Tesla has executed very well on those plans and delivered very handsomely for investors. Now you're saying, today they are different. Are they? Or is it just simple 20/20 hindsight? Did you happen to invest at $17 and sell at $350? There was even more skepticism of them before their IPO (ie, the famous "Tesla Death Watch" series from 2008) and I think they were in a far, far more precarious position back then.
fossuser 7y ago
I also invested early for similar reasons. Though seeing what Tesla constantly has to deal with, if I was ever in a position to decide to IPO in the future I’d want to stay private for as long as possible.
adventured 7y ago
> meanwhile all major tech-related IPOs seem to be about 10B. I have some notable counters to that premise. Square, $31.3 billion market cap. At IPO ~$5 billion. Shopify, $27.8 billion market cap. At IPO ~$3 billion (already 9x after four years). Splunk, $20 billion market cap. At IPO ~$5 billion. Palo Alto Networks, $23.7 billion market cap. At IPO ~$5 billion. Fortinet, $15.8 billion market cap. At IPO $1.5 billion. ServiceNow, $50.3 billion market cap. At IPO ~$4.5 billion. Atlassian, $26.5 billion market cap. At IPO ~$6.5 billion. Twilio, $16.5 billion market cap. At IPO ~$4.5 billion. Zendesk, $9.3 billion market cap. At IPO ~$1.7 billion. Salesforce.com, $127 billion market cap. At IPO ~$3 billion. It hit 15x in about the same time as Tesla. Netflix, $167 billion market cap. At IPO... a couple hundred million dollars. It hit 15x in eight years. This and CRM reach back a ways now, however you still could have easily purchased NFLX for sub $10 / share as recently as 2012. And there are a bunch of tech-related companies that may yet produce 15x style net post IPO returns in the coming years. Such as HubSpot, which has a $7.6b market cap, versus ~$1.2b at IPO in 2014. Could have picked up ETSY at $7 / share (sub $900m market cap) well after its IPO, now $68 ($8.1b market cap).