Tesla Passes Ford by Market Value - <AUTHOR> https://www.bloomberg.com/news/articles/2017-04-03/tesla-passes-ford-by-market-value-before-musk-delivers-model-3 <comment><USER2> Interesting, but market cap isn't everything - FTA:

"While Tesla's market capitalization has swelled in size, Ford still overshadows the Palo Alto, California-based company in most other financial metrics. Over the last five years, Ford has posted net income totaling $26 billion, while Tesla has lost $2.3 billion. Last year, Ford had annual revenue of $151.8 billion compared with Tesla's $7 billion.

And when it comes to car sales, Tesla sold 40,697 vehicles in the U.S. last year, according to researcher IHS Markit. Ford sells that many F-Series trucks in the U.S. about every three weeks."

<comment><USER3> > Over the last five years, Ford has posted net income totaling $26 billion, > while Tesla has lost $2.3 billion.

Ford: "We have no idea how to invest this money. I guess let's just put it in the bank."

Tesla: "We have so many idea for investments, we're only constrained by cash. Let's go back to the capital markets!"

<comment><USER4> More like

Ford investors: "Let me soberly evaluate the company's present and future financial situation before I make any commitments"

Tesla investors: "TAKE MY MONEY"

<comment><USER5> Dead on. The price of Ford is predominantly being determined by institutional investors with a strong understanding of the dividend discount model. Investors moving the market on Ford are buying/selling what they believe to be a stable, mature company and are pricing pretty much ZERO potential for innovation into Ford.

Tesla on the other hand is a darling of retail investors attracted to the marketing machine of "Silicon Valley disruption" and they have already priced in a belief that Tesla will win the global automotive market. DDM? What's a DDM?

Meanwhile Ford, GM, and all the other automotive incumbents are investing in the same technologies as Tesla. Is it more likely that Tesla never falters (even slightly)? Or is it more likely one of the 10+ incumbents surprises with a self-driving/electric success?

I know where I put my money. Interest rates will be climbing at the exact same time as Tesla will be attempting to expand their market to a larger audience who always purchase new cars with an accompanying loan. Oil prices are showing no indication of climbing again for years to come. Consumers have just replaced their aging vehicles in record numbers and won't be in the market for a new one for roughly 7-12 years. Good luck Tesla.

<comment><USER6> Right so for Tesla to make sense, it has to make the iPhone of cars with Ford analogously in the position of Nokia. It looks like that's the expected level of disruption priced in right now.

(Personally I have no idea whether this is likely or not).

</comment></comment></comment></comment></comment><comment><USER7> Former finance professional here: Ford is actually worth 3 times as much as Tesla, once you factor in debt. The total value of the Ford capital structure ("enterprise value") is about 150 billion.

When two companies have wildly different capital structures, you have to compare them on enterprise value, not the market cap of their equity. So while I give kudos to Tesla for building a valuable business, it still has a long way to go to catch up to Ford.

<comment><USER8> [edit]: Current finance professional here.

> When two companies have wildly different capital structures, you have to > compare them on enterprise value, not the market cap of their equity. So > while I give kudos to Tesla for building a valuable business, it still has a > long way to go to catch up to Ford.

That is not necessarily true.

Market cap and enterprise value are two equally valid ways of measuring value or worth. There are even more ways to measure value, such as DCF or value of assets. All of these have their pros and cons.

In this case, my personal opinion is that market cap is a very meaningful way to measure Tesla/Ford and that it's noteworthy that Tesla has passed Ford.

I think it is very meaningful because it (loosely) implies that the present value of Tesla's profits (i.e. net profit after tax) is higher than Ford's. Even on a risk-weighted basis. Or, at least, that's roughly-kinda-sorta what the market believes.

I would argue that enterprise value would be more meaningful that market cap if we were talking about which company was 'bigger'. However, the interesting thing here is that Tesla has become more 'valuable' than Ford, for this definition of value.

<comment><USER9> Current amateur here. I feel like there's only one important thing to consider when comparing Tesla and Ford as investment opportunities: is their value likely to increase?

With Tesla, there's an obvious path for potential massive growth. It's not guaranteed, but the potential is obvious.

With Ford, it's like any other auto manufacturer. What surprises are we expecting? What new products or innovations? Does Ford have _any_ path, even hypothetical, to massive market share growth relative to its current position the way Tesla does? It seems clear to me that the answer is no. Even if their Bolt is a success, they're not about to dominate the market, double their sales, and double their stock. They don't have any Model 3 type event on the horizon.

So all these comparisons of financial metrics on current value, to me, seem pointless. This is the only thing that should matter (along with whatever analysis you want to use to gauge whether Tesla is likely to be able to _execute_ on its plans, which is a more complex question-- but performance so far makes it clear that they are experiencing steady and dependable growth of production and sales with clear, well-defined plans for further future growth.)

<comment><USER10> Irrelevant nit that doesn't undermine your point: the Bolt is made by Chevrolet.

<comment><USER9> Totally forgot, sorry. Right you are.

</comment></comment></comment></comment></comment><comment><USER11> I think these comparison's to other car companies really miss the mark. Those who are long on TSLA (myself included) aren't looking at them as a car company. Tesla is cracking open new markets in the following areas:

\- Electric Cars (most visible. Also don't undervalue their unique direct sales channel, which is a huge competitive advantage)

\- Batteries/Energy Storage (not just cars - utility scale energy storage, with capacity coming online that will double global output of lithium batteries)

\- Solar panels and solar roofs (both residential and commercial, a market with a hockey stick growth curve coming)

\- Self-driving AI (head to head with Google on one of the most fundamental changes to transportation our society has seen in a century, and they have the hardware driving around us all the time already, rapidly learning and improving)

Ford, GM, et al are irrelevant and poor comparisons. This is SpaceX for Terran energy and transportation.

<comment><USER12> What makes you think solar is a hockey stick? I'm not saying you're wrong it's just the first time I've heard this before.

<comment><USER11> The price has been rapidly decreasing in the last 10 years, to the point that it no longer makes sense to _not_ have solar everywhere. It's cheaper than coal, and will soon be cheaper than all the other fossil fuels as well, and will continue to go down, never up.

China now employs over 1 million workers making solar panels. And they're ramping that up as fast as they can, and shelving coal power plants. We've reached that critical tipping point for PV solar to go vertical, and Tesla/SolarCity just built their own factory in Buffalo to take advantage.

<comment><USER13> I think solar is the future, but these claims are stupid.

> "to the point that it no longer makes sense to not have solar everywhere. > It's cheaper than coal, and will soon be cheaper than all the other fossil > fuels as well, and will continue to go down, never up."

Then the market should automatically have shifted to 100% solar by now.

Solar is getting cheaper yes, but it is dependent on hours of sunlight available, which like wind energy, is unreliable and doesn't work at periods (like night). Further, the capacity of a solar power plant isn't its produced electricity, because the capacity is mainly peak capacity, which is only reached a few hours a day.

> China now employs over 1 million workers making solar panels

Don't know where that figure is from, but I guess china must be covered in solar panels by now. 1 million is large number of people. Unless your figures are deceiving. For example, walmart sells solar panels. So, you will count every walmart employee as a solar panel retail employee.

<comment><USER11> >Then the market should automatically have shifted to 100% solar by now.

65% of new capacity in the US last year was wind or solar.[1] The world doesn't change overnight, but expect that trend to continue.

Renewable energy growth is only being slowed by lack of storage. As battery production and other storage techniques come online, it allows higher and higher % of energy to come from renewable sources.

>Don't know where that figure is from, but I guess china must be covered in solar panels by now.

Pretty good summary of the situation here: [2]

"In 2015, China installed half of the world's wind power and a third of its solar photovoltaic capacity. Last year, solar capacity jumped 81.6 per cent and wind capacity grew 13.2 per cent. Greenpeace has said that China's renewable energy growth rate is equivalent to installing one wind turbine and covering one soccer field with solar panels every hour. Five of the world's top six solar manufacturing companies and five of the 10 biggest wind turbine companies are in China. By 2020, half of the country's new electric generation will come from solar, wind, hydro and nuclear power."

[1][https://www.ferc.gov/legal/staff-reports/2016/dec-energy- inf...](https://www.ferc.gov/legal/staff-reports/2016/dec-energy- infrastructure.pdf) [2][http://blogs.ei.columbia.edu/2017/03/03/will-china- take-the-...](http://blogs.ei.columbia.edu/2017/03/03/will-china-take-the- green-mantle-from-the-u-s/)

<comment><USER13> USA is a saturated market, where renewables are given incentives by the government (unfortunately it won't be so any longer).

Look at developing countries, only a fraction of new energy sources for India are solar, even though our coal is inferior quality.

I'm pretty sure that coal is still cheaper than solar

</comment></comment></comment></comment></comment></comment><comment><USER14> Wasn't overvaluing the potential of newer companies over established institutions with significant holdings one of the hallmarks of .com bubble ridiculousness? I'm not particularly knowledgeable about finance and economics– if someone that is knowledgeable has some insight, I'd love to hear it.

<comment><USER15> Totally. Just look at the ridiculous valuations here:

[https://en.wikipedia.org/wiki/Dot- com_bubble#List_of_compani...](https://en.wikipedia.org/wiki/Dot- com_bubble#List_of_companies_significant_to_the_bubble)

On the other hand, there were some major successes as well. Amazon got its start in the bubble and is now gigantic. eBay is doing great. So is PayPal (which is relevant here, since without PayPal we wouldn't have Tesla).

Sometimes these ridiculous valuations are completely unjustified, but sometimes they do come true. Figuring out which is which ahead of time is, well, hard.

<comment><USER16> Cherry picking a piece or two from your link.

>Books-a-Million - Saw its stock

>VA Linux - .... They set the record for largest first-day IPO price gain; after the price was set at $30/share, it ended the first day of trading at $239.25/share, a 698% gain (9 December 1999)

I don't think we are quite in the situation where valuations are based on updated websites. Nowadays it seems like monthly active users drives valuations which when your revenue is ad based, is a smart metric. In Tesla's case, they are actually shipping cars.

<comment><USER15> Agreed. During the dot-com bubble it seems like a lot of stock was driven by abject cluelessness and investors' perceived need to get in on _any_ stock with .com in it.

These days, it's more like excessive optimism. People actually understand this stuff, at least vaguely, and if they're getting it wrong it's just because they don't see the downsides.

</comment></comment></comment></comment><comment><USER17> Bill Ford gave a talk at SXSW, and I asked him the question "Why hasn't Ford built the gigafactory". He gave IMHO a really weak answer about how they weren't sure the economics of it worked out.

Big car OEMs have so much invested in terms of R&D, brand and emotionally in the combustion engine that I think most are just not going to be able to make the jump to EVs. Nissan and BMW are trying, but they are still making really baby steps.

<comment><USER18> He's right, the economics don't work out for a Ford. They only work out for a smaller, separately owned disruptor. Inevitable truth and pattern seen across all mature industries

<comment><USER17> That makes no sense to me - can you explain further?

Why don't Ford produce a 60KWH car as cheaply as they can?

<comment><USER19> The dealerships won't sell it. Any marketing they do for it will hurt their other brands. Any marketing they do for their other brands will hurt it.

It's like McDonalds selling an organic, grass fed burger. If they talk about the quality of the beef, they're basically saying the Big Mac is low quality beef.

<comment><USER20> Interesting they haven't done a sub-brand like a Saturn or Scion.

<comment><USER19> The sub-brand still messes with their marketing. Why do you think there is so much anti-Tesla astroturfing? There's no point in starting a sub-brand if you're just going to have to astroturf it.

</comment></comment></comment></comment></comment></comment><comment><USER21> This headline reads like a race between Nicola Tesla and Henry Ford, with some Musk character unable to get a third revision done.

<comment><USER22> Continue in the same vein: Musk works for Tesla.

</comment></comment><comment><USER23> Can anyone long the stock who is bullish about the future growth of production, cars, batteries etc write down some quick napkin math on future expectations that would justify your investment at this valuation? I have yet to hear a bull case with any actual math behind it, but am willing to hear you out.

Something like:

cars sold by yr, Margins.

battery wall, solar sold by year. Margins.

multiples assumed on revenue and earnings by yr, and at mature phase.

dilution of equity assumed to scale production.

Can someone address those things without hand waiving them away for me? Again, I'm not long or short the stock, but havent heard a coherent argument with math for going long.

<comment><USER24> The thing is, Wall St. already factored all that stuff into their valuation and determined that the 'fair price' is $290/share (as of today).

Tesla's car business is quite profitable and has huge growth...that's what matters [http://greyenlightenment.com/another-correct-prediction- tesl...](http://greyenlightenment.com/another-correct-prediction-tesla)

In the late 90' during the tech bubble, companies that had negative cash flow operation were bid to the stratosphere. Tesla and Amazon however have positive cashflow for operations and huge growth.

People said the same thing about Facebook in 2012-2013 and Google in 2004-2005: how will they (Google and Facebook) justify their valuations? Well, they did. Wall St. sometimes get it terribly wrong (Infospace in 2000) and other time very right.

Sometimes it doesn't make sense...but there is a method to the market's madness.

<comment><USER25> lol @ "but there is a method to the market's madness." It is just supply and demand. More buyers than sellers => price goes up. More sellers than buyers => price goes down. Not all buyers need to be smart and informed. I think Elon Musk will do great things with Tesla but I would never buy that stock... it is purely a gamble.

</comment></comment></comment><comment><USER26> Ford's F-150 truck line is a fortune 50 company by itself. Two factories. It's kind of insane.

<comment><USER27> And yet the rest of Ford's lineup is a snoozefest, even the Mustang.

<comment><USER28> My Focus ST is pretty sweet

<comment><USER29> Isn't that one built in Germany?

<comment><USER30> Focus ST is made in Michigan until 2018 when it moves to Mexico.

<comment><USER29> I was thinking of the RS!

</comment></comment></comment></comment></comment></comment><comment><USER31> I would agree with the market that Tesla has the _potential_ to be far far larger than Ford should things go well. If they manage to get to 500000 cars and full automation within the next year, they'll be worth even more than their current market cap.

Remember that Tesla have by far the best dataset for building self driving cars and this is going to give them a huge time to market and/or safety advantage over their competition. If they launch an Uber clone as well (which they have implied they might) I think they _could_ be able to replace a lot of car journeys with their service instead of paying drivers, something Uber's lofty valuation is entirely based upon.

<comment><USER32> >If they launch an Uber clone as well (which they have implied they might)

Lol. Yes, the second most unprofitable tech company in the world should clone the first most unprofitable tech company. Why not.

<comment><USER31> Because Uber's value is all based upon self driving cars, as I said in my comment.

</comment></comment></comment><comment><USER33> Ford is sitting on almost $16 billion cash. Tesla, like Amazon, burns through cash as fast as they can turn it into _scalable future stuff._ Whether you consider this good or bad depends on your future outlook:

Being long Ford is making a bet that the future will look pretty much the same.

Being long Tesla is making a bet that the future will look different. (Plus the risks of believing that they can do what they say they can, and that their vision is more correct than not)

If you are a Ford investor and want Ford to be investing in the future, you should be ashamed of them for being either too scared or too stupid to know what to do with their piles of money. Then again, the largest carmakers in the US (incl. Ford) were making a _loss_ just a few years ago, and unlike Tesla, they were making that loss while doing ZERO to invest for the future.

So maybe Ford should be scared.

Or maybe they should be pivoting faster so they don't return to not-making-a- profit, because unlike Tesla, they _still_ aren't spending very much on the future, are they?

We can argue about whether or not Tesla has a good plan or a bad plan, but Ford has shown before that they more or less have "No plan." Their reliance of SUV profits almost killed them in the mid 2000's (and did mortally wound GM, only to be resurrected). Will Ford's reliance on the F-150 (or on ICE expertise while outsourcing most other things) do the same thing in the future?

<comment>

I've been holding Tesla for a long time. Currently I'm more optimistic about the company than when I bought it, which seemed fairly risky.

I think the room for growth and market expansion (Important Electric Things and energy future) is very large. I think trying to compute how the math will get there is a mistake, short of making sure that they are not going to run out of money.

Being long technology stocks is a strange game. If you're long IBM or AAPL right now, you're more or less betting that the future is going to look pretty much the same, just like with Ford. It's almost a misnomer to call them technology stocks.

There are only a handful of public companies you can bet on (Tesla and Amazon are probably the most obvious) that are really betting _big_ on the future. The dividends of these will be unknown.

(This was part of a previous small discussion about the price of TSLA last night: [https://news.ycombinator.com/item?id=14018954](https://news.ycombinator.com/item?id=14018954))

<comment><USER34> " _Being long Tesla is making a bet that the future will look different._ "

No. Being long Tesla is making a bet that the future will look like Tesla, that Tesla will be producing a very significant chunk of the vehicles on the road sometime in the reasonably near future. Tesla currently has plans to expand to produce 0.5 million vehicles per year in the 2018-2020 time frame; Ford currently produces 2.5 million vehicles in the US for ~15% of the market.

Disclaimer: I'm on my second F-150 and third Ford vehicle.

</comment></comment></comment><comment><USER35> I've been expecting this ever since I test drove a Tesla last year and got the same feeling I got back in 2008 when I saw an iPhone 3G. The market isn't betting on just another car company but on. car + energy (electricity instead of gas) + TaaS (Transportation as a Service). Tesla has a tremendous headstart on this and in 5-10 years I expect a bloodbath like the smart phone wars, with a only 2-3 main players left e.g. Tesla:Apple::Waymo:Android.

</comment><comment><USER36> Ford has dozens of production facilities across every continent on earth producing millions of vehicles a year. How can Tesla possibly be more valuable?

<comment><USER37> It is all about who owns the future. E.g. how much would you value the stock of SpaceX competitors now that SpaceX can fly reused rockets? Doesn't matter how many factories these guys have. They will be destroyed because they will never be able to compete on price, with somebody who can just refuel their rocket while you have to build a whole new one each time.

People value stocks based on what they think the future holds.

<comment><USER38> Do you actually think other rocket companies won't be able to do that? Tesla doesn't have a monopoly on the future. Also SpaceX isn't Tesla.

</comment></comment></comment><comment><USER39> I think people are betting more on Elon then they are on TSLA.

As an aside, he strikes me as someone who's been told he has some short measure of time left to live and is trying to make the most of it. By all measures, he's swinging for the fences.

</comment><comment><USER40> My prediction has always been that all traditional car manufacturers will jump into the market with gusto at the next inflection point in battery technology.

The current state of the art battery technology for vehicles is heavy and has less than desirable energy density.

The minute a new technology can deliver twice the energy density at the same or lower weight and lower cost most established car manufacturers will jump in.

Electric cars are very easy to build when compared to IC cars. The simplest fact being that you are eliminating thousands of mechanical components and replacing them with an electric motor and hundreds (or thousands?) of electronic components (for motor control). Electronics design and manufacturing is easier, cheaper and faster than mechanical manufacturing.

I believe Tesla is positioned to take a big hit when that inflection point happens. They are inexorably married to a battery technology. The Gigafactory, as awesome as it might be, is now a large ship with huge mass that is very difficult to turn around.

The next battery technology might very well turn the Gigafactory into a huge anchor for a few years, during which all other car manufacturers, lacking that commitment, are likely to leave Tesla in the dust.

<comment><USER37> When that change comes the other players will have the problem that they too will need to build some sort of Gigafactory. There is no way they can do a rushed attack against Tesla on this. These guys are slow movers not willing to take big risks. When this battery technology switch happens I am pretty sure Tesla will actually be the first to move. They will have more experience with large scale battery production than the competition.

It isn't just about cells but putting them together and designing a whole battery, with cooling and everything. Tesla knows very well how to do this. The competition doesn't.

<comment><USER41> They could also buy from the gigafactory, just like Apple buys components from Samsung (their competitor within, particularly, the mobile market). Google licensed their search engine to Yahoo and others.

Tesla is not in a position to replace Ford and others, and they won't be for several years. Even then, they won't be in a position to displace anyone in anything other than _consumer_ vehicles. They have no truck and no announcement for a truck. They have no busses. They have no heavy equipment.

</comment></comment></comment><comment><USER42> This is a perfect slice of Americana here.

I can't find a number through Google but the number of Ford Hourly/Salaried employees has to be over 125,000. As a guess.

Tesla has 30,000 hourly/salary employees.

Despite being valued 'less' Ford has a huge economic impact for many peoples lives. This may decline, over time, but don't be surprised if Ford/GM/Chrysler combine forces for a huge battery factory of their own. Their ability to tap capital markets with lower interest rates than Tesla is a competitive advantage. They also move many more vehicles than Tesla and get better prices from suppliers, which is a competitive advantage.

Tesla's gambit with batteries is either going to work or will offer a fantastic opportunity to pickup a battery factory at a good price.

At the of the day, when all major automotive companies have EV vehicles, what's going to differentiate them? The accuracy of the self driving software? Entertainment options within the vehicle? Serious question.

<comment><USER43> > don't be surprised if Ford/GM/Chrysler combine forces for a huge battery > factory of their own.

They could do that, but they haven't really woken up to the huge threat to their markets that electric cars are posing. They still believe that ICE cars are what people really want. Ford has just announced now that it will begin designing hybrid vehicles. They're a few years behind.

If they decided now that they're going to fund their own gigafactory, it would only be ready in 4-5 years. Where do you think Tesla is going to be then? If things go as planned, in 4-5 years, Tesla could have sold 2+ million Model 3's, and be on its way to more new models.

> when all major automotive companies have EV vehicles, what's going to > differentiate them? The accuracy of the self driving software? Entertainment > options within the vehicle? Serious question.

\- Better performance. The Model 3 isn't a model S, but you can be sure that it will kick the Leaf and Chevy Bolt in the balls.

\- Slicker looks

\- Brand appeal. Don't underestimate this. Think Apple.

\- A supercharger network that's already in place. Other vendors all have major catching up to do.

Another thing to consider is, Tesla has a lot of expertise and an EV designed from the ground up to be electric. Other vendors can't just come up with that tomorrow. It takes time to design and refine a product. IMO, by the time Ford really wakes up, they will largely be fucked. Not just because of Tesla, but because all other vendors are already ahead.

</comment></comment><comment><USER44> Of the major automakers, Toyota probably has the furthest behind ICE platforms. The 5.7L V8 and the 4.6L v6 are 10 years old, and very fuel inefficient compared to the the engines from ford or GM. I think that Toyota really has the most to fear in this case, since they haven't had any success bringing out more efficient ICE/Drivetrains to match the competition, and haven't really managed to scale the hybrid efficiency past the sedan market.

<comment><USER45> In the truck/SUV/CUV segment, the engines are dated- sure. But that segment barely exists in other markets, at least compared to small cars. Particularly in Europe and Asia.

Regardless, I don't think it's a tech issue, but rather an image issue. Trying to sell hybrid trucks to Americans is like trying to feed boiled spinach to kids.

<comment><USER44> Ford has been successful with the Ecoboost, though. And Ram has the ecodiesel. Both viable options. Though the segment is small outside the US, the Article states that Ford alone sells 40K trucks every 3 weeks.

</comment></comment></comment><comment><USER46> Comparing Tesla with Ford is like comparing Ford with (GM + Shell + Hertz). Tesla is an energy company not an automobile company. It plans to sell you new ways to capture (solar panels), store (power wall), and consume (cars) energy. It also plans to make cars fully autonomous and ownership free. Ford will obviously compete with Tesla in some segments is not a primary competition for Tesla.

<comment><USER47> What you said is correct but immediately raises the question "what's the value of that integration?" Obviously GM and Shell have been successful and profitable without being integrated, and it's not clear that merging would yield them advantages. Why do these advantages exist in the electric energy arena?

<comment><USER46> Can't predict numbers but some obvious integration points are... a) on the hardware side a solar panel customer could also buy the power wall (natural extension) and car, which can yield very high LTV per consumer; b) on the services side a fully autonomous ride sharing means low operating cost; c) if Solar City continues to lease out the panels then Tesla could become the biggest solar powered grid network on the planet.

<comment><USER48> I just don't see a) as happening much. If there are cheaper solar panel or electric cars available I don't see the point in a consumer not going with the competition. Unless Tesla intentionally makes it hard to integrate competitors solar panels into their power walls/cars, which would likely land them in some anti-competitive/monopoly troubles in a number of jurisdictions.

<comment><USER46> Possible.. interesting thing to note is that home owners are more inclined to lease panels than buy them (so retail cost doesn't matter much it appears). SolarCity really took off after it started offering the 0 down lease. If that trend continues, Tesla could potentially offer a blanket $x/month for energy production and $y/month for consumption (cars) and lock people in. We know panel cost and batter cost will go down over time, so the game is likely in selling experiences not entities..

</comment></comment></comment></comment></comment><comment><USER49> I think this is mostly undervaluation of Ford. 45B$ marketcap is quite low for that kind of revenue, profits and assets. I mean 12B$ in free cash flow! How do analyst even evaluate car companies?

</comment><comment><USER37> Why doesn't this have a huge benefit to Tesla. They always seem to be short on cash, but if you are worth that much shouldn't cash be super simple to raise for Tesla?

Why push for high stock prices if it gives little benefits.

Seems like a nutty evaluation even if Tesla knocks over the established players in the future. I do in fact think that there will be an iPhone moment where established players who have not taken electric self driving cars seriousness will be eradicated like Black Berry and Nokia.

<comment><USER50> That's an interesting comparison — we could very well end up in a market where existing manufacturers catch up and vastly outsell Tesla in the long-run (Android), and Tesla ends up as a very successful luxury model (iOS).

<comment><USER37> Android was not an established player either though. So we had a situation where new entrants like Apple and Google both destroyed the established players like Nokia, Black Berry, Windows Phone, Siemens, Sony-Ericcson etc.

There might very well be another electric car maker upending the market, but really I think Tesla has quite a number of years head start now. Building and planning something like the Giga factory took many years. A competitor will not be able to reproduce that in a couple of years.

Tesla also sits with years of experience designing batteries now. They have a competency advantage over the established players who mainly know how to make a fossils fuel engine. Each year passing that becomes useless and dead knowledge. They also lack the software development skills of Tesla. They have mostly bought that from vendors. Tesla thus sits with expertise in the key areas for the future of automobile while the competition is very weak in these areas.

I predict a bloodbath. 10 years from now I think Tesla will be quite big and the established players struggling hard to hang on.

</comment></comment></comment><comment><USER51> This seems like irrational exuberance levels. It's already worth more than Ford and still hasn't even produced the model 3. :/

</comment><comment><USER52> Not a very meaningful metric. Ford is still 3x Tesla in terms of Enterprise Value, which accounts for how much of the cap table is debt.

</comment><comment><USER53> Note that Ford stock pays good dividends. You can make money just by holding onto it [https://www.fool.com/investing/2017/02/13/how-safe-is- ford-m...](https://www.fool.com/investing/2017/02/13/how-safe-is-ford-motor- companys-48-dividend.aspx)

</comment><comment><USER54> Can someone more knowledgeable explain how is that even possible? Doesn't this mean that the market predicts that Tesla's future earning after discount and after taking risks into account is higher than Ford's? Under which data? Or am I missing something?

<comment><USER34> " _Doesn 't this mean that the market predicts that Tesla's future earning after discount and after taking risks into account is higher than Ford's?_"

Roughly, yes.

" _Under which data?_ "

Data? Data? Never heard of it. This is all gut feelings here.

</comment></comment><comment><USER55> This is exciting, but Ford continues to be a major player. They just invested $1 billion in R&D in Ontario, Canada. Seems like they are on the right path, but perhaps don't have the flexibility and velocity of a (relatively) smaller company like Tesla.

</comment><comment><USER56> What this says to me is that the stock asset class is broken. The value of a stock is supposed to be the amount of earnings you are expected to receive from it over its lifetime (adjusted according to the risk free rate or whatever).

But today a stock's value can be influenced by a cool factor. Stocks that never pay any earnings can have high values (Amazon) and investor mania can out-live any attempted short.

There has to be a better way to set up the market.

What if stock had an expiration, after which you had to buy it again? And what if, when you short a stock, you get the full face value of the stock and then only have to pay the owner the earnings? Since the stock expires, you don't have to worry about covering both the earnings and the stock price, only the actual earnings.

I think the result would be pricings that more accurately represented a company's earnings potential.

<comment><USER57> > the value of a stock is supposed to be the amount of earnings you are > expected to receive from it over its lifetime

Who supposes that? I don't and I'm ready to pay a different price that you'd do. If there isn't a good reason for that, you might be able to take advantage from my position.

Now, there are many reasons why I wouldn't price a stock as the sum of its (future) earnings. For instance, a company can be acquired by another and makes a very different business in the combined configuration. Moreover, the acquirer could use the merger to prevent a competitor to enter a very profitable market. Why would you care about the performance of the acquired company if it remained independent? There's no way to estimate the future earnings of a company without knowing all the possible strategic configurations.

Growth stocks are bought for potential capital gains, not dividends. (Market) power is much more important than earnings you can forecast.

I'm a Tesla shareholder (the stock makes over 90% of my financial assets) and I don't expect a buck of dividend from this company. I intend to keep the stock for ~20 years, which I bought at $25 avg.

<comment><USER56> All companies eventually die. Sometimes this can take hundreds of years, but all companies do eventually die. At that point, the stock is worth zero. So if all stock is eventually worth zero, why pay for any of it today?

Well, you may want voting rights. But voting rights don't mean much unless you hold a lot of stock, and a lot of stock is non-voting anyway.

That leaves dividends and exits. An exit depends on someone having a value for the company, and can almost be looked at as a 'final dividend'. So I would essentially boil the value of most stock down to purely dividends.

If you buy it for any other reason, you are hoping that some other person will be willing to buy it from you later. Which means that other person needs a reason (voting power, dividends, or some other business move with external benefits).

But my appraisal is that many stocks exist today that have value simply because people think that other people will want the stock. It's inefficient, and at the moment of exit (death also counts as exit here) someone is left holding a bunch of stock that's worth less than what they bought it for.

</comment></comment></comment><comment><USER24> Part of this huge surge in tesla stock has to do with enthusiasm over their battery technology. tesla is a battery company that also makes cars, too. I think the share price goes as high as $500 soon.

</comment><comment><USER58> Totally relevant news to 99% of us readers who wont be driving a Tesla anytime soon :)

<comment><USER59> even years ago, a model s was as expensive to own, all costs accounted for over the span of seven to ten years, as a honda odyssey minivan. they are about to release a car that costs 35000 dollars.

<comment><USER60> There's literally a sh*t ton of assumptions, and caveats to the comparison you're referring to: [https://www.teslacost.com/model](https://www.teslacost.com/model)

Also, the "winner" of his comparison was a RAV4 EV (by about $20K) The Tesla finish mid-pack (behind the Ody)

<comment><USER61> So three years ago, the high-end, not-meant-to-be-cheap $92,800 car was 5% more expensive than the Odyssey according to a decent-looking model (but cheaper according to some reports), and significantly more expensive than the since-discontinued Rav4 EV.

Fair, it's not a slam-dunk that the Tesla S was a great purchase if your goal was saving money. I'm pretty sure it' wasn't the best option in that case.

The Model 3 sticker price is less than half the S85, though. Short-term, yeah, most people _still_ won't be driving a Tesla, but when I see volume increasing and unit price decreasing, I extrapolate to "Tesla could easily become a major player", not to"this is irrelevant to 99% of us".

</comment></comment></comment></comment><comment><USER62> I would say Tesla is chasing it's valuation, Ford earned it's valuation.

</comment><comment><USER63> I think that shows how important e-mobility is for the consumer.

</comment><comment><USER64> Maybe it's time to buy some boring old Ford stock?

</comment><comment><USER65> Where are all the guys saying that this is just an illusion amd that elon actually doesnt know any physics or engineering, but just is a master salesman in disguise?

</comment><comment><USER66> Often discussed outside HN, but almost never heard here: Many are investing in his relationship with President Trump. At least two major investment banks [0][1][2] advised their clients of it and many other observers and investors think so too. [3][4] Again, outside HN it's not an uncommon idea; just search a news aggregator for "musk trump".

EDIT: It's a very serious problem if we lose free market competition, and instead success depends - or even appears to depend - on politics and corruption. Even the appearance will encourage others to take that course, and normalize it. Corruption always exists to a degree, the market is never perfect, but that doesn't mean it's not serious. What happens to startups if success depends on access to politicians?

The surge in Tesla's market capitalization corresponds with Musk's public support for Trump, though the stock market in general has recently. Here's the data on Tesla; I recommend just looking at the graphic, which will tell you more:

[https://finance.yahoo.com/quote/TSLA?p=TSLA](https://finance.yahoo.com/quote/TSLA?p=TSLA)

* It's now at it's all-time high (give or take a buck or two), $294

* Generally, around Election Day it was stable around $190, on Dec 2 it hit bottom at ~181, then it vectored mostly steadily upward to Feb 21 (277), then there was a dip and it stabilized for awhile; now it vectored up again starting ~ March 23. today.

\----

[0] [https://www.nytimes.com/2017/01/26/business/elon-musk- donald...](https://www.nytimes.com/2017/01/26/business/elon-musk-donald-trump- wall-street.html)

[1] [http://money.cnn.com/2017/01/20/technology/elon-musk- trump/](http://money.cnn.com/2017/01/20/technology/elon-musk-trump/)

[2] [https://www.cnbc.com/2017/02/16/ubs-analyst-says-he-cant- und...](https://www.cnbc.com/2017/02/16/ubs-analyst-says-he-cant-understand- why-tesla-shares-are-up-so-much.html)

[3] [https://www.bloomberg.com/news/articles/2017-01-26/musk-s- su...](https://www.bloomberg.com/news/articles/2017-01-26/musk-s-surprising- rapport-with-trump-yields-40-rally-for-tesla)

[4] [https://www.theatlantic.com/technology/archive/2017/02/elon-...](https://www.theatlantic.com/technology/archive/2017/02/elon- musk-is-all-in-on-donald-trump/515562/)

<comment><USER66> @dang, @mods: I don't care about this one comment, and obviously HN is your forum and you can score things however you want. However, please let us know your policies so that commenters can willingly follow them and so that they don't waste their valuable time contributing things that are unwanted and will be underutilized (and in fairness those contributions are most of HN's value). Please be open about it (whatever 'it' is); we shouldn't have to guess.

When the above comment was posted, it immediately was below 7 other threads and hundreds of comments, and it dropped quickly since then, despite no downvotes. That is odd behavior; usually new comments start at the top, or near it, unless the user is brand new or has some other problem (I'm in neither category AFAIK; most of my other comments seem to behave within the range of normality). I've seen other recent comments exhibit this different behavior. I see nothing that would algorithmically trigger anything; it's not short, it contains no inflammatory words, no all caps, etc.

My guess, based on eyeballing the anecdotal evidence is that mentioning "Trump" is the problem. If you object to it, please just say so. I think it's a bad idea to single him out - his presidency will have a very serious impact on the IT industry, startups, and many broader things that HN readers hold dear. But that's a different issue. Please give us the courtesy of letting us know, whatever it is, Trump or not.

EDIT: You objected previously to something I wrote that mentioned Trump, but I wasn't clear what the objection was - mentioning Trump? something else? I responded and asked, but I think too late to be noticed, so I still don't know. I really have no idea what's going on. The thread with my question is here:

[https://news.ycombinator.com/item?id=13880838](https://news.ycombinator.com/item?id=13880838)

<comment><USER24> I think the placement has a large degree of randomness. Comments with a lot of Karma will rise to the top, and everything else settles in the middle and bottom.

</comment></comment></comment><comment><USER67> Is TESLA now too big too fail?

</comment><comment><USER68> Somewhat related, when can I hitch my Fifth Wheel to a Tesla 1 ton truck?

<comment><USER69> 3-5 years. Truck is probably there next or 2nd next model. Expect announcement after model 3delivery.

</comment></comment><comment><USER70> If I actually trusted the derivative counterparties to remain solvent, I'd reopen a trading to put a long short strategy on this. Everybody seems so have missed the glaring fact that the electric transport isn't going to go anywhere; the lucky ones will have good bi/tricycles, or horse/mules and cart. Motorized transport wasn't a product of humanity's sheer desire for it! It was only caused by the incomparably immense oversupply of energy from fossil fuels, which was a one-off. We can just pray that the transition won't destroy us. Electric lights and computer networks would be nice to salvage out of it. Did you think you'd never use a 100mhz CPU again? The suckless guys have the right idea; we need more efficiency and standardization, not bigger frameworks running on faster chips. I want a 500mW workstation with relatively fast e-ink like display. I'd sell billions of em. Sell your (e)cars, buy yourselves nice bicycles. You won't regret it.

<comment><USER71> Are there any public ebike companies?</comment></comment>


To keep temp at 1.5ºC: "No new fossil fuelled infrastructure, anywhere, ever" - <AUTHOR> https://twitter.com/mark_lynas/status/1145977972849033216 <comment><USER2> If you still have any fossil investments I am begging you to divest. It might not even impact your returns [http://www.lse.ac.uk/GranthamInstitute/news/the- mythical-per...](http://www.lse.ac.uk/GranthamInstitute/news/the-mythical- peril-of-divesting-from-fossil-fuels/)

<comment><USER3> I don't have any, but how would that change anything? Presumably, people won't just shut down a company, they will sell it to somebody else - the company stays in operation, only with new owners.

<comment><USER2> I guess there are many convoluted and interconnected reasons. Here is just one snippet

"As time went on, though, it became clear that divestment was also squeezing the industry. Peabody, the world's biggest coal company, announced plans for bankruptcy in 2016; on the list of reasons for its problems, it counted the divestment movement, which was making it hard to raise capital. Indeed, just a few weeks ago analysts at that radical collective Goldman Sachs said the "divestment movement has been a key driver of the coal sector's 60% de-rating over the past five years"."

[https://www.theguardian.com/commentisfree/2018/dec/16/divest...](https://www.theguardian.com/commentisfree/2018/dec/16/divestment- fossil-fuel-industry-trillions-dollars-investments-carbon)

<comment><USER3> Thanks, that sounds plausible. So it's less about taking out your current investment and more about not investing new money into them that is hurting them. Taking out the current investments still makes sense, of course, both ethically and by not being invested into an industry you're trying to shut down.

<comment><USER4> Divesting your current holdings should also help to drive the price down (more supply) which lowers the appeal of the industry for investors with less idiological motivation.

<comment><USER5> Some people like to purchase investments that decline, because they are cheaper. As opposed to owning things that are going up, because they are expected to go up more.

If a lower price didn't attract investors, you _couldn 't_ divest, could you? Nobody would appear to buy from you.

<comment><USER4> Everything you say is true, but seems like a weird framing. Low price "attracts" investors because they think it will go up in value. If all it does is go down, it creates a downward spiral as less and less people believe it will go up in value.

</comment></comment></comment></comment></comment></comment></comment><comment><USER6> Want to make a difference on climate change as a technologist? Feel free to join these communities actively looking for support and with ongoing projects (that are alive):

\- [https://climateaction.tech/](https://climateaction.tech/)

\- [https://techimpactmakers.com/](https://techimpactmakers.com/)

\- [https://www.tmrow.com](https://www.tmrow.com)</comment>


After Dark in CSS - <AUTHOR> http://bryanbraun.github.io/after-dark-css/ <comment><USER2> I bought the flying toasters screen saver, now owned by infinisys in Japan, a few years ago:

[http://en.infinisys.co.jp/product/flyingtoasters/index.shtml](http://en.infinisys.co.jp/product/flyingtoasters/index.shtml)

It's an appropriately bizarre way to get the best screen saver ever made going on your mac.

</comment><comment><USER3> Nicely done. Great flashback :)</comment>


The War on Meetings - <AUTHOR> https://www.nytimes.com/2016/02/28/magazine/meet-is-murder.html <comment><USER2> The idea that engineers and product designers or whatever are a new overclass seems faintly ridiculous. I don't have as many meetings as my manager.... because I'm busy writing the software my manager decided I should write.</comment>


Hacking X Rebirth for fun and education - <AUTHOR> http://fabian.trampusch.info/blog/hacking-xrebirth-for-fun-and-education/ <comment><USER2> Anyone have any input as to the current state of this game?

I was a massive X series fan right up until Terran Conflict and Albion Prelude and was looking forward to Rebirth more than any other game I've ever played.

Unfortunately the game was a huge disappointment. Not just in terms of the bugs and lack of stability but what I saw as the extreme dilution of the mechanics and gameplay elements that had become staples of the series.

It felt very much like a console game that had been ported to PC and was incredibly limited in scope compared to its predecessors.

Egosoft are good with patches and free updates though so I was hoping over time it would approach something like what I envisioned from an entry into the X series.

I haven't touched the game since a week or so after release.

<comment><AUTHOR> I have the same background as you. Preordered it and never played it until now. Something is definitely missing. I played countless hours in X-Tension / X2 / X3 / AP / TC - but X Rebirth is really different. I will play definitely the campaign to its end (even though Egosoft is not really famous for producing deep campaigns). Maybe when the campaign ends the real free game begins...

I would say: Give it a try.

<comment><USER2> I'll have to give it another go once I've waded through some of the other games in my colossal backlog.

</comment></comment></comment><comment><USER3> Impressive.

Although the log-to-debug approach works fine, we used to use that to write an ingame chat client for earlier games: [http://creshal.de/Static/?page=dcgui](http://creshal.de/Static/?page=dcgui) / [https://github.com/creshal/devchat- gui/wiki](https://github.com/creshal/devchat-gui/wiki)

Latency was… about as high as you'd expect, but it worked. (Although I think we never got around to kill the player if he was kicked out of the chat.)

<comment><AUTHOR> I will have a look at that, thanks! :-)

<comment><USER3> Better don't, it was my first bigger programming project, and the first I made in C.

</comment></comment></comment><comment><USER4> I've actually been hacking on the X-games for a while, looking to create a local X-wiki based on the mods I currently have installed on my game. It works by running locally and using the game's data files to create the wiki content.

Love this idea for pulling live data out of the game though. Seen some really powerful mods for Gnomoria and Cities: Skylines use a similar injection approach.</comment>


Show HN: Pix-Zip – Download stock images easily - <AUTHOR> https://pix-zip.herokuapp.com <comment><AUTHOR> Hi guys, I built this app to try out my skills in ReactJS and Adobe XD. At the same time, it's useful when I need a bunch of stock images served in one zip file instead of opening separate tabs in the browser with my slow connection.

I hope you guys find it useful as well. I appreciate all criticism and feedback!

Also, you're free to fork and modify it on GitHub.</comment>