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Sure, but the same could be said of Tesla. Horrible employer, constant exec churn, unbelievable cash burn, what appears to be structural losses.... But Tesla st

by hodder 7y ago

Sure, but the same could be said of Tesla. Horrible employer, constant exec churn, unbelievable cash burn, what appears to be structural losses.... But Tesla still has a 56B mcap today. Uber is 46B. These VC/equity issue cash furnaces can go on longer than most can fathom if a subset of investors believe in the long term vision.

deweller 7y ago
Tesla has arguably a more clear path to a profitable future. Uber's path to profitability is arguably much more speculative and dependent on risky technology advances.
- drannex 7y ago
  Agreed. Not only did Tesla have a clear path, but they had a product that could sell at much higher margins, better quality control, not-so dubious legal ways of selling them, paid their employees decent wages (Uber... does not), and they won't have technology that can be copied and repeated by a second year student at uni. Uber and Tesla are not anywhere close to directly comparable.
- aplummer 7y ago
  I think very clearly, I’m not a Tesla fan but the solar roof and car are both unique and the core fan base is very strong.
- toong 7y ago
  Additionally, Tesla is pushing hard on battery tech etc, ... As far as I understand, Uber does some autonomous vehicles R&D, but the required tech advances will probably not be developed by them ?
dd36 7y ago
Tesla is building a product. Automated dispatch is not protectable.
- aSplash0fDerp 7y ago
  BINGO! After all of the pennies are counted, the cost to pave the way for the future where other companies take market share after the dust settles is astounding. Had they rolled their 1st mover advantage into building and smoothering markets (think scooters) with IP locked autonomous taxis, a trillion dollar valuation would have been acceptable.
- MaupitiBlue 7y ago
  Like Hertz and Avis and Budget aren’t already established brands in the fleet financing, servicing, and dispatch business.
john_moscow 7y ago
Tesla is toxic because the founder has a vision, sets tight constraints and pushes hard on people to meet them (hello Amazon). Uber is toxic because there are too many people sitting on a pile of investor money, hence politics and infighting. As an employee, you may want to avoid both, but as an investor, you need to see the difference.
erikpukinskis 7y ago
Do you really see structural losses when you look at the graph of Tesla’s P/L? I don’t understand how you could interpret the charts that way. That seems like a talking point people parrot who have never looked at the numbers. I mean, this is Tesla and Uber on the same timescale: https://imgur.com/gallery/NOsh4b1 https://imgur.com/gallery/NOsh4b1 Certainly one of those companies has structural losses.
- hodder 7y ago
  Yes I see structural losses. Look at the cash flow.
  - erikpukinskis 7y ago
    Appreciate the honesty!
mdasen 7y ago
I think part of the issue is market timing. If we went back to June, Tesla is sitting at a $33B market cap after a huge slide. Uber started sliding in August. If we were just looking at market cap, Uber's had been decently stable for 3 months post-IPO and is now sliding. Tesla's would have been at its low point in June. You could have said then, "same could be said... but Uber is sitting at a $71B market cap while Tesla has slid down to $33B". I do think Tesla is overvalued, but presents less risk than Uber. Ultimately, Tesla is looking to be a car company. $56B is a bit expensive for a car company, but there are examples. GM is $54B, Ford is $35B, Fiat Chrysler is $25B, Volkswagen is $100B, Toyota is $230B, Honda is $50B, Nissan is $27B, and Mazda is $6B. I think Tesla is overpriced because I think it's highly unlikely that they're the next Toyota. In 10 years, I think they might be the next Mazda or GM or Nissan or Honda - representing no gain to a significant loss over the next decade. Even if they become the next Volkswagen in 10 years, that would represent a less than 10% annualized return for something that's unlikely to happen. Even if one thinks Tesla is making a great product, the likelihood of becoming the next VW is very slim. Heck, Mazda makes some great cars and sells nearly 2 million, but they're only a $6B company. But fundamentally, building cars and selling them for the amount of money people buy cars at is a reasonable proposition. Tesla's quarterly reports show that they can make them profitably and that the solar business is weighing on their financials. I can see Tesla being a profitable, sustainable company. They've proven out the economics of their batteries, drive-trains, manufacturing, etc. enough for me to believe there isn't an impediment to them continuing to exist indefinitely. I don't think they're going to justify their high valuation, but I can certainly see them becoming a Mazda, Nissan, or Honda - well respected, profitable, etc. I mean, Tesla had $143M in GAAP net income in Q3. However, I think there are big questions on whether Uber can stick around indefinitely. As states turn against the gig economy, does that wreck their business model? As self-driving seems many more years away, do they have the runway to keep going? Even with self-driving, are they the ones that will capture that market or will a company without the losses from a driver-oriented business take over that space? Will customers give a company like Uber margin or will they constantly be searching for the cheapest option? I think the auto industry in general will face challenges over the next couple decades (another reason I'm less bullish on Tesla), but Tesla (at least its auto business) is fundamentally traditional. You give them tens of thousands of dollars, they give you a car. It might be an electric one with interesting new toys, but it's a traditional transaction and one that seems to provide good margin as the ramp-up costs start to wind down (launching an auto company takes a lot of time and money). Tesla is trying to convince people that they want to buy a Tesla rather than a Nissan. Uber is trying to convince people that they want to buy a lot more taxi rides and the only way to do that is by making them cheaper. Can they make that happen? Even if they make that happen, is there a barrier to someone else coming in and competing?
marcosdumay 7y ago
Don't Tesla earn some profit on each sale, while Uber loses money? Both are losing money overall, but this detail makes a lot of difference.
zby 7y ago
Elon has overpromised many times in the past - and probably it won't happen in 2020 but I still believe that Tesla is leading the driverless competition. They have the data.

by hodder 7y ago

deweller 7y ago

Tesla has arguably a more clear path to a profitable future. Uber's path to profitability is arguably much more speculative and dependent on risky technology advances.

drannex 7y ago
Agreed. Not only did Tesla have a clear path, but they had a product that could sell at much higher margins, better quality control, not-so dubious legal ways of selling them, paid their employees decent wages (Uber... does not), and they won't have technology that can be copied and repeated by a second year student at uni. Uber and Tesla are not anywhere close to directly comparable.
aplummer 7y ago
I think very clearly, I’m not a Tesla fan but the solar roof and car are both unique and the core fan base is very strong.
toong 7y ago
Additionally, Tesla is pushing hard on battery tech etc, ... As far as I understand, Uber does some autonomous vehicles R&D, but the required tech advances will probably not be developed by them ?

dd36 7y ago

Tesla is building a product. Automated dispatch is not protectable.

aSplash0fDerp 7y ago
BINGO! After all of the pennies are counted, the cost to pave the way for the future where other companies take market share after the dust settles is astounding. Had they rolled their 1st mover advantage into building and smoothering markets (think scooters) with IP locked autonomous taxis, a trillion dollar valuation would have been acceptable.
MaupitiBlue 7y ago
Like Hertz and Avis and Budget aren’t already established brands in the fleet financing, servicing, and dispatch business.

john_moscow 7y ago

Tesla is toxic because the founder has a vision, sets tight constraints and pushes hard on people to meet them (hello Amazon). Uber is toxic because there are too many people sitting on a pile of investor money, hence politics and infighting. As an employee, you may want to avoid both, but as an investor, you need to see the difference.

erikpukinskis 7y ago

Do you really see structural losses when you look at the graph of Tesla’s P/L? I don’t understand how you could interpret the charts that way. That seems like a talking point people parrot who have never looked at the numbers. I mean, this is Tesla and Uber on the same timescale: https://imgur.com/gallery/NOsh4b1 https://imgur.com/gallery/NOsh4b1 Certainly one of those companies has structural losses.

hodder 7y ago
Yes I see structural losses. Look at the cash flow.
- erikpukinskis 7y ago
  Appreciate the honesty!

mdasen 7y ago

I think part of the issue is market timing. If we went back to June, Tesla is sitting at a $33B market cap after a huge slide. Uber started sliding in August. If we were just looking at market cap, Uber's had been decently stable for 3 months post-IPO and is now sliding. Tesla's would have been at its low point in June. You could have said then, "same could be said... but Uber is sitting at a $71B market cap while Tesla has slid down to $33B". I do think Tesla is overvalued, but presents less risk than Uber. Ultimately, Tesla is looking to be a car company. $56B is a bit expensive for a car company, but there are examples. GM is $54B, Ford is $35B, Fiat Chrysler is $25B, Volkswagen is $100B, Toyota is $230B, Honda is $50B, Nissan is $27B, and Mazda is $6B. I think Tesla is overpriced because I think it's highly unlikely that they're the next Toyota. In 10 years, I think they might be the next Mazda or GM or Nissan or Honda - representing no gain to a significant loss over the next decade. Even if they become the next Volkswagen in 10 years, that would represent a less than 10% annualized return for something that's unlikely to happen. Even if one thinks Tesla is making a great product, the likelihood of becoming the next VW is very slim. Heck, Mazda makes some great cars and sells nearly 2 million, but they're only a $6B company. But fundamentally, building cars and selling them for the amount of money people buy cars at is a reasonable proposition. Tesla's quarterly reports show that they can make them profitably and that the solar business is weighing on their financials. I can see Tesla being a profitable, sustainable company. They've proven out the economics of their batteries, drive-trains, manufacturing, etc. enough for me to believe there isn't an impediment to them continuing to exist indefinitely. I don't think they're going to justify their high valuation, but I can certainly see them becoming a Mazda, Nissan, or Honda - well respected, profitable, etc. I mean, Tesla had $143M in GAAP net income in Q3. However, I think there are big questions on whether Uber can stick around indefinitely. As states turn against the gig economy, does that wreck their business model? As self-driving seems many more years away, do they have the runway to keep going? Even with self-driving, are they the ones that will capture that market or will a company without the losses from a driver-oriented business take over that space? Will customers give a company like Uber margin or will they constantly be searching for the cheapest option? I think the auto industry in general will face challenges over the next couple decades (another reason I'm less bullish on Tesla), but Tesla (at least its auto business) is fundamentally traditional. You give them tens of thousands of dollars, they give you a car. It might be an electric one with interesting new toys, but it's a traditional transaction and one that seems to provide good margin as the ramp-up costs start to wind down (launching an auto company takes a lot of time and money). Tesla is trying to convince people that they want to buy a Tesla rather than a Nissan. Uber is trying to convince people that they want to buy a lot more taxi rides and the only way to do that is by making them cheaper. Can they make that happen? Even if they make that happen, is there a barrier to someone else coming in and competing?

marcosdumay 7y ago

Don't Tesla earn some profit on each sale, while Uber loses money? Both are losing money overall, but this detail makes a lot of difference.

zby 7y ago

Elon has overpromised many times in the past - and probably it won't happen in 2020 but I still believe that Tesla is leading the driverless competition. They have the data.