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I like Tesla like the next guy, but when it comes to investing, especially public money, the burden to prove profitability comes on the company. I'm glad this

I like Tesla like the next guy, but when it comes to investing, especially public money, the burden to prove profitability comes on the company. I'm glad this happened, but the GP is not wrong to criticize this. It's still taking public funds and putting them in a company who still hasn't made a profit.

kirse 17y ago
You summed it up very well. "Profitable in a few months" means you're unprofitable. We can draw up all sorts of extrapolations based on preorders and expected order rates etc., but until the past month's income statement shows green, a business is not profitable. It really is that simple. I hope nothing but success for Tesla in that they usher in an electric car revolution (just imagine if the USA became the primary source of electric cars for the world), but until then I'd like to see some numbers if I'm paying for Elon to run his mouth.
- calambrac 17y ago
  "Not profitable yet" does not necessarily imply "doing it wrong", but you're right, it is easier to ignore that fact, make a cheap snarky comment, and then act self-righteous because you know the definition of the word 'unprofitable'.
- davidw 17y ago
  I'd rather own stock in a company (early Google for instance), that is a few months out from 'profitable', with a sales curve that is trending up, up, up, than stock in, say, GM, in the last month or two that it was profitable.
tptacek 17y ago
I'm not sure I understand what you're saying. Most startup capital goes to companies that aren't profitable.
- knightinblue 17y ago
  Maybe this'll help you understand - Musk is not getting venture capital, he's getting our money.
  - raheemm 17y ago
    Government funding is needed to create new industries or spur innovation in nascent fields. Entire industries like online companies would not exist without DARPA funding of internet, fast food companies would not exist without govt. funding of the interstate. In light of the fact that Detroit got bailout money its perfectly sensible for the govt to invest in innovation within the auto industry.
    - proee 17y ago
      I don't agree with this AT ALL. It's not the role of government to decide when to "fund" or "not fund" certain types of industries. Let the private sectors decide if that's a good idea or not. Do you agree with farm subsidies? Are you glad your tax dollar get spent on projects that may have no practical purpose because there's no market or products ready to use them?
      - tptacek 17y ago
        That sounds like an awfully naive version of how government works. What about DARPA grants to university research projects? Or NIH grants for medical research? What about speculative defense projects, like (to name a bad case) missile defense, or (a good one) unmanned aerial vehicles? The government "funds" and "doesn't fun" "certain industries" all the time. In fact, it even does what it's doing with Tesla in a smaller scale routinely, through the SBA process. The Tesla loan is a drop in the ocean compared to the SBA loan budget.
        proee 17y ago
        I understand that the government funds lots of projects as you mention, my point is that I don't think the government should fun these types of projects and it's going beyond the intentions of the founders. I suppose I'm in the minority, having a small government is better than a fat government.

kirse 17y ago

You summed it up very well. "Profitable in a few months" means you're unprofitable. We can draw up all sorts of extrapolations based on preorders and expected order rates etc., but until the past month's income statement shows green, a business is not profitable. It really is that simple. I hope nothing but success for Tesla in that they usher in an electric car revolution (just imagine if the USA became the primary source of electric cars for the world), but until then I'd like to see some numbers if I'm paying for Elon to run his mouth.

calambrac 17y ago
"Not profitable yet" does not necessarily imply "doing it wrong", but you're right, it is easier to ignore that fact, make a cheap snarky comment, and then act self-righteous because you know the definition of the word 'unprofitable'.
davidw 17y ago
I'd rather own stock in a company (early Google for instance), that is a few months out from 'profitable', with a sales curve that is trending up, up, up, than stock in, say, GM, in the last month or two that it was profitable.

tptacek 17y ago

I'm not sure I understand what you're saying. Most startup capital goes to companies that aren't profitable.

knightinblue 17y ago
Maybe this'll help you understand - Musk is not getting venture capital, he's getting our money.
- raheemm 17y ago
  Government funding is needed to create new industries or spur innovation in nascent fields. Entire industries like online companies would not exist without DARPA funding of internet, fast food companies would not exist without govt. funding of the interstate. In light of the fact that Detroit got bailout money its perfectly sensible for the govt to invest in innovation within the auto industry.
  - proee 17y ago
    I don't agree with this AT ALL. It's not the role of government to decide when to "fund" or "not fund" certain types of industries. Let the private sectors decide if that's a good idea or not. Do you agree with farm subsidies? Are you glad your tax dollar get spent on projects that may have no practical purpose because there's no market or products ready to use them?
    - tptacek 17y ago
      That sounds like an awfully naive version of how government works. What about DARPA grants to university research projects? Or NIH grants for medical research? What about speculative defense projects, like (to name a bad case) missile defense, or (a good one) unmanned aerial vehicles? The government "funds" and "doesn't fun" "certain industries" all the time. In fact, it even does what it's doing with Tesla in a smaller scale routinely, through the SBA process. The Tesla loan is a drop in the ocean compared to the SBA loan budget.
      - proee 17y ago
        I understand that the government funds lots of projects as you mention, my point is that I don't think the government should fun these types of projects and it's going beyond the intentions of the founders. I suppose I'm in the minority, having a small government is better than a fat government.