The ongoing X and Elon Musk Transgressions Thread

[Hack&Lube]

Originally Posted by Wormius

I’d think the biggest worry about owning a Tesla is having Musk keep changing things on a whim. It would be insanely frustrating to have features come and go.

I have had several features deleted while the price tag only went up

[Erick Estrada]

Originally Posted by Wormius

I’d think the biggest worry about owning a Tesla is having Musk keep changing things on a whim. It would be insanely frustrating to have features come and go.

Yes it is. I'm not a big fan of the holiday update outside of the inclusion of Apple Music as they moved the audio interface to the bottom left corner when it was better where it was before. This is the only car I have ever owned where I got used to the interface and within a year it changed for the worse and I can't go back. I suppose that's the con part about having an interface that is fluid and changes all the time.

[ripTDR]

Originally Posted by Ozy_Flame

I am also thinking the build quality is getting better on many other brands, Tesla just has name value more than anything because they were generally first to the punch. I saw a chart the other day of battery loss in various EV's in cold weather, and Tesla's didn't look good. There are other cars with better range an battery durability than Musk Chariots.

I dunno, My model 3 long range build quality is pretty good. I'm happy.



As for cold weather, here in the lower mainland I haven't really noticed a significant drop in range, even with the cold and wind. I get that it's easy to crap all over them but they still have good qualities. I just took my dual motor out for a drive in deep snow and it performed great. Good traction with winter tires and performed on par with the other big trucks and awd suv's


I can easily separate the junk that's going on with Musk to the brand that is Tesla, but I guess for others, not so much. It's too bad because they are decent cars.


Anyways, hate away!!!

[Fuzz]

Originally Posted by Hack&Lube

Picked up the LFP battery RWD Tesla Model 3 when it was still +10 in October. Power consumption on a 10 km drive was 133 Wh/km.

During polar vortex this week I've been hitting 276 Wh/km over that same 10 km drive so I'd say my range loss is at least 50%

Oh wow, LFP sounds like something to avoid in Canada...did you have a choice on that? 50% range loss is aweful.

[Enoch Root]

Originally Posted by Hack&Lube

That's your choice. You can choose how far you want to set your charge limit. On LFP batteries, they do recommend charging to 100% once per week as there much less impact on this battery chemistry.

Yes, it is your own choice. However, human nature is such that, if you give people the choice to make a bad decision, they will.

People will charge to 100%. That causes degradation. Audi/Porsche limit battery access to 98%, which - they argue - greatly reduces degradation. It also reduces range. Range is one of the primary attributes of a Tesla. So it seems fair to all discuss degradation, which stems from that pursuit of range.

[opendoor]

Originally Posted by Enoch Root

You said 'at a given net income level', I assume you mean a given net income level per share (otherwise we have apples and oranges). With the same income per share, the companies should be worth the same, assuming the same growth expectations. The fact that one has more debt only means that they have to have higher revenues in order to cover the debt service and thus have the same net income. The only reason to value one higher than the other, based on the debt level, is that you think the debt level will impact earnings in some way (good or bad). You can't simply say that the first company's equity should equal the second company's equity plus their debt ($500b = $200B + $300B). Their equity should be equal, plus or minus the expected impact of the debt on company B.

Essentially you are using the market cap to determine the value ($500B vs $200B). But value is not a function of market cap, market cap is a function of value. Let's run another quick example:

Two companies start with nothing, and each raise $200B in an IPO, issuing 20B shares at $10. They each now have $200B in equity (and a market cap of $200B). Both generate net income of $1/share, and both have similar growth expectations, and at $10 per share, they each have a P/E of 10X. Now company B raises $300B in debt. Should company A suddenly be worth $500B, simply because company B now has the $300B in debt? No. They are still equal companies.

Company valuation is about earnings. And growth of those earnings. The amount of debt that a company has, is a contributing factor in determining the value of the company - of course. However, it is not a direct, 1 to 1 factor, and less debt is not an automatic positive for the company (as PeteMoss outlined a few posts ago). Tesla's P/E is a function of investors' optimism about earnings growth. And based on the fact that Tesla's head start, and market advantage, are now largely gone, or at least rapidly deteriorating, I think the P/E is too high.

But a large-cap $200B company can't really raise $300B in debt, any more than you can get a $1M loan against a $500K house.

What actually happens is over time a company grows and as they take on more debt, shareholder equity declines as a result (relative to what it'd be with no debt). A well-run business will use debt so it can increase it's value more than the debt decreases it (i.e. a $100B company might borrow $25B to invest in itself to become a $200B company, leaving shareholders ahead by $75B). But ultimately, taking on debt reduces shareholder equity relative to the company's total value.

For instance, if TSLA took on $100B in debt and vaporized that money, you don't think their market cap would be impacted? Or if a company issued a bunch of preferred shares to insiders? In both cases the market cap would decline and P/E would get lower, with little change to the underlying business or profitability.

That's why EV/EBITDA is normally a better comparison for companies with significantly different debt levels. The normal range for car companies is about 8-15x; Tesla is currently at 28x. Still too high, but not absurdly so if they continue to grow their earnings.

And I'm not even talking specifically about Tesla. I wouldn't be the least bit surprised if the company tanked in the coming years; Musk is an idiot, their autonomous driving looks like vaporware, and their build quality isn't up to the standards of their competitors. I'm talking more about P/E not being a useful metric without context.

I mean, look at General Electric. 10 years ago their P/E was a pretty reasonable 8x. But they had a ton of debt, so their EV/EBITDA was about 30x. Meanwhile a similar company in Honeywell had a P/E nearly double GE's at 15x, but because they had virtually no debt, their EV/EBITDA was only 12x.

And what happened? GE's stock tanked in the following years while Honeywell's has tripled since then. P/E would have suggested the opposite, but because it ignores debt and we're talking about companies with significantly different debt levels at the time, it wasn't a useful metric on its own.

[Enoch Root]

To the first sentence, I was continuing with your fictitious numbers.

To the rest, you are basically moving the goalposts and saying what I was saying, which is that debt can impact the stock price, if it becomes too burdensome. So I'm out here.

Tesla is way over-valued at 47 X earnings.

[Fuzz]

Originally Posted by Enoch Root

To the first sentence, I was continuing with your fictitious numbers.

To the rest, you are basically moving the goalposts and saying what I was saying, which is that debt can impact the stock price, if it becomes too burdensome. So I'm out here.

Tesla is way over-valued at 47 X earnings.

The market must agree, Tesla down another 6% today, testing the $140 level from fall 2020.

[Hack&Lube]

I know it's relevant to Twitter and the collapse of Musk's stock market value but we also have a dedicated Telsa thread to discuss that company and the cars.

https://forum.calgarypuck.com/showthread.php?p=8497571

[Fuzz]

We are just keeping the thread warm until Musk does something else dumb with Twitter. Any minute now.

[GordonBlue]

Originally Posted by Hack&Lube

I know it's relevant to Twitter and the collapse of Musk's stock market value but we also have a dedicated Telsa thread to discuss that company and the cars.

https://forum.calgarypuck.com/showthread.php?p=8497571

i think Tesla stock comments work just as well here. It's sort of a musk thread and everything he does is woven together. Leave the other thread for those who want to talk about the car.

[Sliver]

Originally Posted by Kasi

All I know is that Elons recent events and activities have guaranteed that I will never buy a Tesla. Considering I will likely be moving from my hybrid to an EV in the next 3 years well that’s one sale lost. Relatively minor ofc but I have heard this sentiment from some friends too.

Yeah, I'm in the same boat. I was always hesitant because of the fit and finish issues that would drive me bonkers, but I'm also a sucker for amazing acceleration and fun tech. I could have seen myself getting one; however, as I was driving behind a Model 3 today I was thinking of a photo I just saw of Musk with Putin's chief propaganda officer (or some title to that affect...she was hot) and how I could not support a guy who associates with people like that and is also the latest right-wing #### disturber. Fata that. He's not getting a penny from me.

[opendoor]

Originally Posted by Fuzz

The market must agree, Tesla down another 6% today, testing the $140 level from fall 2020.

8% now. Down 40% from the day he took control of Twitter.

It'll be interesting to see what happens if the bleeding continues. He may be the CEO, but he also only owns ~13% of the company.

[Wormius]

Originally Posted by opendoor

8% now. Down 40% from the day he took control of Twitter.

It'll be interesting to see what happens if the bleeding continues. He may be the CEO, but he also only owns ~13% of the company.

How does that compare to the stock market as a whole? I know his recent antics aren’t helping, but the market overall looks prettu crappy.

[PeteMoss]

Originally Posted by Wormius

How does that compare to the stock market as a whole? I know his recent antics aren’t helping, but the market overall looks prettu crappy.

No where near down 40%. That's like a great depression/covid world shutdown level drop.

[Enoch Root]

Originally Posted by opendoor

8% now. Down 40% from the day he took control of Twitter.

It'll be interesting to see what happens if the bleeding continues. He may be the CEO, but he also only owns ~13% of the company.

And if shareholders think they can connect the two, he could be subjected to a lawsuit

[timun]

Originally Posted by Wormius

How does that compare to the stock market as a whole? I know his recent antics aren’t helping, but the market overall looks prettu crappy.

Tesla share price was $309.07 on September 19th. By October 27th it had dropped 27%, to $225.09. It closed today at $137.80, down 55% vs. Sep. 19 and 39% vs. Oct. 27.

The NASDAQ composite itself was 11,535.02 on Sep. 19. By Oct. 27 it had dropped to 10,792.67, down 6% vs. Sep. 19. It closed today at 10,547.11, down 9% vs. Sep 19 and 2% vs. Oct 27.

[Erick Estrada]

The whole twitter thing is definitely hurting Tesla but there was going to be some pain regardless as they are going to miss delivery targets as the China market has flattened for them and the Model Y introduction basically cannibalized Model 3 sales (down 50%) in Europe. The industry is down and they aren't immune.

[Senator Clay Davis]

TSLA cratering even more today, down 9%. Nothing like severely overpaying for Twitter and then promptly crashing what makes up the majority of your worth. Stable genius!

[Wormius]

Originally Posted by timun

Tesla share price was $309.07 on September 19th. By October 27th it had dropped 27%, to $225.09. It closed today at $137.80, down 55% vs. Sep. 19 and 39% vs. Oct. 27.

The NASDAQ composite itself was 11,535.02 on Sep. 19. By Oct. 27 it had dropped to 10,792.67, down 6% vs. Sep. 19. It closed today at 10,547.11, down 9% vs. Sep 19 and 2% vs. Oct 27.

Musk isn't helping anything, and while he has a unique potential to be a boost to Tesla more than the other EV companies, it seems like these 50% drops are general trend for EV companies though if looking at Lucid or Rivian during that time period.