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Panasonic sells its $3.6B Tesla stake
- sschueller 5y agoYet the stock is still going up.
- paulpauper 5y agobecause $3 billion is tiny compared to Tesla's size
- darig 5y ago<1% of market cap, around 5% of average daily volume. Yet you believe this action should preclude the price from going up?
- jamestenglish 5y agoBuried beneath the sensational headline is the fact that Panasonic has been slowly divesting over the past year. They did not just "dump" the stock today, they simply reported that they had finished selling all their shares today.
- FartyMcFarter 5y agoIt seems like a smart decision once you look at car companies' market caps: Tesla: $651 B Toyota: $288 B Volkswagen: $152 B Daimler / Mercedes: $99 B Ford: $60 B
- paulpauper 5y agoPeople said this 3 years ago too, arguing Tesla was too big. guess what: it got way bigger. Tesla is forcing other brands to have to adapt or die. They are way behind Tesla in technology, infrastructure, and marketshare for electric vehicle and battery tech.
- bredren 5y agoDon’t forget customer satisfaction.
- Aperocky 5y agoMaybe market share, but I can't see how the argument goes for technology or infrastructure. As of now, none of the auto-driving tech is acceptable to go hands free, people have tried it and paid with their lives. The only difference between Tesla and traditional companies is that Tesla didn't seem to mind people testing unproven techs with their lives while the other manufacturers are more restrictive.
- toomuchtodo 5y agoTake a long distance road trip with an EV without Supercharger access. Report back.
- agloeregrets 5y agoSuperchargers are better on average. But the US Electric Canonball run record is NOT held by a Tesla. It's getting there.
- adolph 5y agoKyle Connor, from the Out of Spec Motoring YouTube Channel, took a Porsche Taycan across the country on December 31 and set a new electric Cannonball record with a time of 44:26. This beats the previous record set by Connor and his team in a Tesla Model 3 by almost an hour. https://cleantechnica.com/2021/01/12/porsche-taycan-beats-teslas-ev-cannonball-record/ https://cleantechnica.com/2021/01/12/porsche-taycan-beats-te...
- Spooks 5y ago"The Japanese firm paid $21.15 per share for around 1.4 million shares" That is some decent profit
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- orcasauce 5y agoIs that 1.4 million shares before, or after, the 5:1 split?
- FabHK 5y ago> Panasonic’s share price increased 4.53% in the morning session after Nikkei reported the stock sale.
- codeulike 5y ago.... making almost $3B in profit. edit: in perpective - they owned about 0.55% of Tesla. Selling their share nets Panasonic a windfall thats worth about 10% of their own $27.7B market cap.
- avelis 5y agoYeah "dumping" a winning trade isn't dumping. It's taking profits to move onto other investments.
- EGreg 5y agoWhy not? It’s still dumping. Saying that someone is only dumping if they lose, makes it too narrow. Dumping lowere the price, the bigger the dump the lower the price. Selling slowly can be called gradually unloading.
- toomuchtodo 5y ago"Panasonic realized exceptional gains on Tesla investment, continues successful partnership." Edit: Money made is money made. Lots of wealthy folks who exited investments before they were done running.
- toast0 5y agoDumping is half of pump and dump. Which if you do it right is making a profit. (I don't think this trade is pump and dump, just arguing usage with a commonly used term)
- lmilcin 5y agoDumping a winning trade is still dumping. It means you think you have won as much as there was to be won and you now have better uses for the money. This suggest you believe the stock is no longer as wortwhile as some alternative.
- codeulike 5y agoWhen Amazon sell you a printer or a book or a laptop, are they dumping it?
- avelis 5y agoA more appropriate headline would be: Panasonic uses gains from stock investment (TSLA) to expand car battery operations.
- jamestenglish 5y agoEven more appropriate: Over the course of the last year Panasonic has divested from TSLA and used the gains to expand car battery operations. The currently headline makes it sound like it just click sell on $3.6B shares, the article makes clear that they have been selling over the year and this is just the final report that they are fully divested.
- dehrmann 5y agoThat's the story people might tell, but it's untrue. Interest rates are low. Panasonic has a medium investment-grade credit rating. Yields those bonds would be something like 3.5%. Panasonic would rather sell Tesla shares to fund a project than pay 3.5% interest.
- robomartin 5y agoReading between the lines, my guess is Panasonic is getting ready to work --and scale-up-- with lots of car manufacturers. Owning stock in any one company would create a conflict of interest. So, you either buy an equal amount (whatever "equal" means) in stock in every company you work with or you own no stock on any of them. The latter is the easiest path to eliminating any ethical questions.
- foobarian 5y agoWhy would it be a conflict of interest or some vague ethical concern, instead of just expecting the TSLA valuation to drop as they expand their client list?
- r00fus 5y agoClear conflict of interest prevents future sales contracts with other clients. It's not the governments or Panasonic, it's their image to new clientele.
- robomartin 5y agoLet me reduce it to a simple example: Two companies buy tires from the same tire manufacturer. The tire manufacturer owns a significant amount of stock in company A and none for company B. If company A does well, the stock value increases. This could be worth billions. Company B has a legitimate concern here. Is company A getting any preferential treatment? Lower pricing? Preferential deliveries? Better access to resources? Etc. While two companies can buy exactly the same product from a manufacturer, the nature of the relationship and the advantages one receives over the other can be massively different. The easiest way to understand this, of course, would be volume. If a company buys a million units a year it will have preferential treatment and access over another only buying 10K/year. My point is that owning billions of dollars of Tesla opens the door to a set of questions. This door is closed permanently the minute Panasonic got rid of all the stock.
- frumper 5y agoThe problem in your example isn't for Panasonic, it's for company B. I'm not sure why you think preferential treatment between companies is a bad thing. If you're Panasonic or Tesla you'd want to keep a good thing going and if Tesla wants to change battery design, Panasonic isn't going to cater to the car company buying a rounding error of what Tesla buys to keep some appearance of "fairness." You make what your customers want, and you definitely favor making what your best customer wants.
- romwell 5y ago>The move provides the Japanese firm with billions of cash to support new strategic initiatives, such as the $7.1 billion purchase of Blue Yonder ...what the hell is Blue Yonder, and why would Panasonic want it?
- bluedino 5y agoAccording to wikipedia: Blue Yonder (formerly JDA Software Group) is an American software and consultancy company (owned by New Mountain Capital, The Blackstone Group and Panasonic), providing supply chain management, manufacturing planning, retail planning, store operations and category management offerings[1] headquartered in Scottsdale, Arizona.
- romwell 5y agoSure, but why Panasonic, and why now?
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- keypusher 5y agoThey are primarily in supply chain management. Given the current issues worldwide with supply chain disruption, this seems like a prescient acquisition.
- BurningFrog 5y agoNot as dramatic as it sounds: "Panasonic sold its entire share in their important battery client Tesla, in the last fiscal year"
- TX0098812 5y agoCan anyone explain how Tesla can be valued so high? They're valued twice as high as Toyota at around 1/12 the profits of Toyota. P/E is almost 600 so they'd have to overtake Toyota's profits by a significant margin to justify their valuation. So far this looks like pure hype. However... they are way ahead in terms of technology in a number of areas and I guess they could also make money from things like their super charger network and batteries? So maybe they're better positioned for the future / more diversified than Toyota and therefore have greater potential?
- noveltyaccount 5y agoTwo thoughts: 1) the stock market is irrational and FOMO bubbles go to the moon 2) the market is perfectly rational and perfectly prices in future considerations; Tesla isn't an automaker, they're an energy company with tons of upside ahead. ¯\_(ツ)_/¯
- aeternum 5y agoThe valuation reflects the idea that they eventually will overtake Toyota's profits significantly. Toyota continues to focus on hybrids rather than EV. A questionable gamble.
- njharman 5y ago> So far this looks like pure hype. So far, the last 5 years? > better positioned for the future Yes, they are a battery company. Positioned to capitalize on the end of the Fossil Fuel age.
- nscalf 5y agoYeah, valuations also bake in expectations of future earnings. Beyond normal expectations, growth stocks like this and tech companies get big multiples. My theory is that retail investors behavior is more like angel investors with tech companies now. My guess on the valuation right now is that a huge amount of people think Tesla becomes the worlds largest car company and redefines the industry. I mean, they kind of already have redefined the industry, the only question left is how much of the change do they capture as value.
- vharuck 5y agoQuestion to anyone more knowledgeable than I am in fiscal or business matters: why did Panasonic invest in a large client? Wasn't it risky? If 2020 had not been kind to Tesla, Panasonic would've been hit twice.
- colinmhayes 5y agoI think it has to do with a battery tech/manufacturing agreement between tesla and Panasonic.
- plorkyeran 5y agoPanasonic made their investment back in 2010. Investing in a (at the time) much smaller partner as part of a business deal is a semi-common thing to do because the smaller company needs more runway to be able to get to the point where they can actually start buying from you.
- Shadonototro 5y agosounds like people figured how to scam the US pump and dump their stocks
- thehappypm 5y agoJust... no. That's now what happened here at all. Panasonic invested very early in Tesla, as a way to help give them more runway and just generally be a good partner to a buyer of their batteries. The price of Tesla stock has nothing to do with anything Panasonic did to "pump it up". They probably are just as astounded as the rest of the world by how the Tesla stock is, and decided to cash it out rather than let a meme stock own a huge chunk of their balance sheet, all while making a 9-figure profit.
- bell-cot 5y agoSo...Panasonic - which probably wants to be an electronics company, not an investment fund - booked a huge profit by selling off something which started out as a little demonstration of financial & moral support for a little customer. But which had grown to be ~13% of Panasonic's own market cap - possibly interesting financial regulators, or causing electronics-focused talent there to feel some concern for their career paths. And they did so gradually and quietly, when the no-longer-little customer had long outgrown any need for Panasonic's show of financial & moral support. I understand why this pushes a lot of peoples' buttons. But objectively, my reaction is "Zzzzz".