The Finance Thread....

[The Proper Chap]

Apparently Deliveroo which had never made a profit up to 2019 and booked a loss of £300 million that year could be worth up to £8 billion when it makes it stock market debut which is expected soon. This on the back of a good year in 2020 due to Covid.

This company fits the model described in your post. I expect all the corporate investors that have propped the company up will trouser nice profits as the mugs pile in. The mugs including those who manage our pension schemes. The guys who spunked a fortune piling into corporate jokes during the "new paradigm" of the dot com bubble.

To55ers.

Bang on matey, it's a fooking joke.

 

[The Proper Chap]

Dr Martens recently floated on the stock exchange, it's currently valued at around 5 billion, ridiculous.

A lot of these businesses use EBITDA as their headline profit figure, it's basically absolute bullsheet.

 

[angelic upstart]

Am I right in saying Tesla is essentially in that boat? Their profit is actually not profit and the traditional car makers are selling just as many EVs and someday it'll all come crashing down.

 

[The Proper Chap]

Am I right in saying Tesla is essentially in that boat? Their profit is actually not profit and the traditional car makers are selling just as many EVs and someday it'll all come crashing down.

Tesla has been massively loss making for years.

I think they claimed they have just made a profit.

It is now valued at 712 billion US Dollars.

As a comparison BMW is valued at around 46 billion Euros and has generally made a profit of 7 - 10 billion Euros in recent years.

 

[The Proper Chap]

Upstart,

This is from 2019, the likes of Tesla generally aren't solvent businesses, they are just backed by investors with never ending resources. In the end those investors do very well when the mugs dive in (as Al implied yesterday).

Tesla’s still losing money despite a record quarter for deliveries - The Verge

 

[The Proper Chap]

Elon Musk is regarded by many as some kind of genius for what he has done, it's a joke.

 

[Snakebite]

I work for a vehicle manufacturer in R+D and spend a lot of my time managing the cost of the parts we develop and confirming budgets to protect profitability.
I have discussed the weird world of Tesla a number of times with my boss who is interested in finance, stocks and shares etc.

We both agreed that Tesla will sooner or later have to do one of two things to turn an actual profit.

1, bring people in who understand how to turn a profit in the world of automotive and start either pricing the vehicles properly or making some tough decisions on the giveaway content in them, alongside doing a proper lean analysis of the business.

Or 2, licence their technology and sell powertrains and tech to the rest of the automotive world of which I’m sure there would be a fairly long line of customers.

It’ll be very interesting to see how it plays out no doubt.

 

[Snakebite]

Elon Musk is regarded by many as some kind of genius for what he has done, it's a joke.

I’m by no means a particular fan of his so it pains me a touch to write this, but I think he’s a genius alright, a massively flawed genius that can act like a petulant child but still a genius.

His success with Paypal(or was it eBay?), SpaceX and I’m getting Tesla off the ground (even if it hasn’t turned profit yet) is astonishing really.

I have no doubt that in the future SpaceX at least will be looked back on as a huge success that a private enterprise could deliver people to to the ISS and maybe beyond.

It’s interesting to read some of his stuff on Twitter about SpaceX, space nerds ask him questions about the missions or the technical aspect and he frequently responds to them, usually fairly quickly with a detailed and very open reply even if it is to say they cocked something up and need to re-evaluate for future.

 

[angelic upstart]

I think musk has been a little lucky with investors rather than a genius. PayPal was the result of a merger, not musks idea. Tesla already existed when he strolled in and I know nothing of SpaceX so cant comment.

 

[The Proper Chap]

I imagine there are plenty of genuine geniuses who haven't been given billions and billions to work on various ideas, many will have struggled to get a few thousand quid behind them. There is shed loads of talent around, sadly most of it doesn't get a look in.

Musk doesn't strike me as a genius.