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The chances that Tesla will buy out a legacy auto company are zero. It makes no sense. They are all saddled with crushing debt loads, dealer networks, and str

The chances that Tesla will buy out a legacy auto company are zero. It makes no sense. They are all saddled with crushing debt loads, dealer networks, and stranded assets. None of them have anything Tesla needs to become the largest car manufacturer in history by 2030.

nickik 6y ago
There are so many more issues. They have lots of plants that Tesla doesn't need or want. Even worse, you can't close down those plants because of unions and politics. Tesla doesn't want unions in general. Battery being the limiting factor means that having more ability to produce cars is basically useless.
- rswail 6y ago
  The fact that "Tesla doesn't want unions in general" is a sad anti-pattern. Unions are the way that labor negotiates with capital on an equal basis. The fact that the US has a badly flawed labor market where things that shouldn't be tied to employment (eg healthcare, pensions/retirement) are still tied to employment, is a bug, not a feature. Tesla will not be able to avoid "unions" if they manufacture in Europe. Neither will they be able to avoid standard employer contributions in the form of taxation and employment benefits, like minimum paid vacation and sick leave, etc.
  - mcot2 6y ago
    Tesla gives almost all their factory workers stock. I think that’s worked out well. https://www.teslarati.com/tesla-giga-berlin-starting-wages-revealed/ https://www.teslarati.com/tesla-giga-berlin-starting-wages-r...
  - nickik 6y ago
    I was just explaining why Tesla will not buy other car makers in the US.
- deleted 6y ago
  [deleted]
friedman23 6y ago
This kind of uninformed negativity is why I'm loaded up on GM calls. GM btw, has no debt (at least in the way you are thinking).
- totalZero 6y ago
  If there is a cash takeout, the IV will go down. If there is a share component to a hypothetical acquisition, the IV will potentially increase. However, I'm not sure how likely that is. Just be aware that your Vega p&l could be negative, so extremely long dated calls with a lot of Vega may need a big gap between a cash takeout price and spot in order to be profitable.
  - rlonn 6y ago
    This reads like finance buzz bingo
    - totalZero 6y ago
      I'm just saying that long-dated calls can lose money in a cash acquisition.
  - friedman23 6y ago
    I'm already up 200% on my $150k bet. The IV was basically nothing a month ago.
- pmorici 6y ago
  Yeah I’m sure Tesla is just chomping at the bit to take on a debt portfolio backed by ICE vehicle loans and leases. The assets underlying all that debt are going to have a drastic revaluation as electric takes over. I would bet on a GM bankruptcy within 5 years. GM is blackberry it’s 2008.
- pokerhobo 6y ago
  GM has about $100B in debt https://www.benzinga.com/news/20/09/17407586/a-look-into-general-motorss-debt#/:~:text=General%20Motors's%20Debt%20According%20to%20the%20General%20Motors’s,company%20has%20a%20net%20debt%20of%20$98.94%20billion https://www.benzinga.com/news/20/09/17407586/a-look-into-gen.... Help me understand how I’m misinterpreting this.

nickik 6y ago

There are so many more issues. They have lots of plants that Tesla doesn't need or want. Even worse, you can't close down those plants because of unions and politics. Tesla doesn't want unions in general. Battery being the limiting factor means that having more ability to produce cars is basically useless.

rswail 6y ago
The fact that "Tesla doesn't want unions in general" is a sad anti-pattern. Unions are the way that labor negotiates with capital on an equal basis. The fact that the US has a badly flawed labor market where things that shouldn't be tied to employment (eg healthcare, pensions/retirement) are still tied to employment, is a bug, not a feature. Tesla will not be able to avoid "unions" if they manufacture in Europe. Neither will they be able to avoid standard employer contributions in the form of taxation and employment benefits, like minimum paid vacation and sick leave, etc.
- mcot2 6y ago
  Tesla gives almost all their factory workers stock. I think that’s worked out well. https://www.teslarati.com/tesla-giga-berlin-starting-wages-revealed/ https://www.teslarati.com/tesla-giga-berlin-starting-wages-r...
- nickik 6y ago
  I was just explaining why Tesla will not buy other car makers in the US.
deleted 6y ago
[deleted]

friedman23 6y ago

This kind of uninformed negativity is why I'm loaded up on GM calls. GM btw, has no debt (at least in the way you are thinking).

totalZero 6y ago
If there is a cash takeout, the IV will go down. If there is a share component to a hypothetical acquisition, the IV will potentially increase. However, I'm not sure how likely that is. Just be aware that your Vega p&l could be negative, so extremely long dated calls with a lot of Vega may need a big gap between a cash takeout price and spot in order to be profitable.
- rlonn 6y ago
  This reads like finance buzz bingo
  - totalZero 6y ago
    I'm just saying that long-dated calls can lose money in a cash acquisition.
- friedman23 6y ago
  I'm already up 200% on my $150k bet. The IV was basically nothing a month ago.
pmorici 6y ago
Yeah I’m sure Tesla is just chomping at the bit to take on a debt portfolio backed by ICE vehicle loans and leases. The assets underlying all that debt are going to have a drastic revaluation as electric takes over. I would bet on a GM bankruptcy within 5 years. GM is blackberry it’s 2008.
pokerhobo 6y ago
GM has about $100B in debt https://www.benzinga.com/news/20/09/17407586/a-look-into-general-motorss-debt#/:~:text=General%20Motors's%20Debt%20According%20to%20the%20General%20Motors’s,company%20has%20a%20net%20debt%20of%20$98.94%20billion https://www.benzinga.com/news/20/09/17407586/a-look-into-gen.... Help me understand how I’m misinterpreting this.