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We should ask ourselves why other launch providers have not done this? Why have we been told by BMW, Mercedes, Lexus "this is all there is", "people will only b

We should ask ourselves why other launch providers have not done this? Why have we been told by BMW, Mercedes, Lexus "this is all there is", "people will only buy so many $100k cars per year". Then Tesla came an squeezed $1tn valuation into a niche we've been told does not exist. Or is impossible, unprofittable and we don't need that much innovation. Should we immediately fire all other CEOs? In the end Musk hires the same people from the same planet, uses the same raw materials, banks and same customers.

sschueller 3y ago
What value was created? Car sales have not exactly exploded. [1] [1] https://www.iea.org/data-and-statistics/charts/global-car-sales-by-key-markets-2005-2020 https://www.iea.org/data-and-statistics/charts/global-car-sa...
- paulus_magnus2 3y ago
  The value is this magic building: you put metal sheets & plastic granulate in one door and cars come the other door. Most other vendord are only a marketing shell whereas everything is outsourced to a galaxy of suppliers. Tesla has full vertical integration and captures value of the whole chain including dealerships. Plus Teslas are have performance of supercar and can demand much higher margins.
afiori 3y ago
I am not sure about the other companies, but Tesla has no plan to ever pay dividends to stock holders so (buyout aside) the only "rational" value for the stock is 0 independently of its valutation.
- yzydserd 3y ago
  The dividend strategy of a company has, or should have, minimal if any influence over the valuation of the company. Capital appreciation alone is sufficient. Indeed, in theory any issued dividend is merely a planned dilution of value.
  - afiori 3y ago
    I am not talking about the valutatio of the company but about the price of the stock. The valutation of a company is meaningful for loans and investments, but not directly for retail trading. If the stock pays 0 dividends then the only value it can have must be that of finding a greater fool to sell it to.
    - adriancr 3y ago
      > If the stock pays 0 dividends then the only value it can have must be that of finding a greater fool to sell it to. A share is what it says, a 1/x stake in ownership of the company. What are you actually saying?, that a share in tesla has no value because no dividents?
      - thunky 3y ago
        Yeah, this is it. People get confused about dividends all the time, but they are essentially just a forced sale of your shares. Which is also a taxable event, and many try to avoid dividends for that reason.
      - afiori 3y ago
        I am talking about what is a reasonable price for something vs its market price. As far as I know a stock has three useful uses: - you can sell it to someone - you can collect dividends - if the company is sold you get a fraction of the sale - if it is a voting share you can influence the company For a company like Tesla only the first one applies and a tiny bit of the last one (by selling it you influence the price). I am not sure about this but there might be cases were because of financing/loans/internal politics someone might want to have X% of the shares regardless of other benefits. What I am saying is that for almost every retail investor the only value of Tesla's stock is that probably in the future other might want to buy it for more as the only thing you can do it to exchange it back for the currency you bought it for[0]. So the only "rational"[1] price should be (close to) 0. [0] There might also be fiscal benefits, but I do not think they matter here/ [1] The market if often "irrational" and that is not a bad thing per se. It just means that sometimes prices are more driven by hype.

sschueller 3y ago

What value was created? Car sales have not exactly exploded. [1] [1] https://www.iea.org/data-and-statistics/charts/global-car-sales-by-key-markets-2005-2020 https://www.iea.org/data-and-statistics/charts/global-car-sa...

paulus_magnus2 3y ago
The value is this magic building: you put metal sheets & plastic granulate in one door and cars come the other door. Most other vendord are only a marketing shell whereas everything is outsourced to a galaxy of suppliers. Tesla has full vertical integration and captures value of the whole chain including dealerships. Plus Teslas are have performance of supercar and can demand much higher margins.

afiori 3y ago

I am not sure about the other companies, but Tesla has no plan to ever pay dividends to stock holders so (buyout aside) the only "rational" value for the stock is 0 independently of its valutation.

yzydserd 3y ago
The dividend strategy of a company has, or should have, minimal if any influence over the valuation of the company. Capital appreciation alone is sufficient. Indeed, in theory any issued dividend is merely a planned dilution of value.
- afiori 3y ago
  I am not talking about the valutatio of the company but about the price of the stock. The valutation of a company is meaningful for loans and investments, but not directly for retail trading. If the stock pays 0 dividends then the only value it can have must be that of finding a greater fool to sell it to.
  - adriancr 3y ago
    > If the stock pays 0 dividends then the only value it can have must be that of finding a greater fool to sell it to. A share is what it says, a 1/x stake in ownership of the company. What are you actually saying?, that a share in tesla has no value because no dividents?
    - thunky 3y ago
      Yeah, this is it. People get confused about dividends all the time, but they are essentially just a forced sale of your shares. Which is also a taxable event, and many try to avoid dividends for that reason.
    - afiori 3y ago
      I am talking about what is a reasonable price for something vs its market price. As far as I know a stock has three useful uses: - you can sell it to someone - you can collect dividends - if the company is sold you get a fraction of the sale - if it is a voting share you can influence the company For a company like Tesla only the first one applies and a tiny bit of the last one (by selling it you influence the price). I am not sure about this but there might be cases were because of financing/loans/internal politics someone might want to have X% of the shares regardless of other benefits. What I am saying is that for almost every retail investor the only value of Tesla's stock is that probably in the future other might want to buy it for more as the only thing you can do it to exchange it back for the currency you bought it for[0]. So the only "rational"[1] price should be (close to) 0. [0] There might also be fiscal benefits, but I do not think they matter here/ [1] The market if often "irrational" and that is not a bad thing per se. It just means that sometimes prices are more driven by hype.