Is Tesla TOAST ?

[GRG55]

Re: Is Tesla TOAST ?

Nice find.

Although the statement "the largest corporate collapse for many decades" seems a bit of hyperbole in these intensely speculative times of chronic excess.

The rest entirely predictable, and many of the factors and expectations of this written up in various threads over the past few years by a number of different iTulipers.
But when the inevitable end for Tesla finally comes I am certain it will be "unexpected" and "nobody could have seen it coming".

[dcarrigg]

Re: Is Tesla TOAST ?

Nice find.

Although the statement "the largest corporate collapse for many decades" seems a bit of hyperbole.

The rest entirely predictable, and many of the factors and expectations of this written up in various threads over the past few years by a number of different iTulipers.
But when the inevitable end for Tesla finally comes I am certain it will be "unexpected" and "nobody could have seen it coming".

The Efficient Market Hypothesis just will not die. So nobody can ever see anything coming. Even when basically the same thing keeps happening over and over again in basically the same way. To admit that bubbles exist and it's possible for stocks to be overvalued and prices to be irrational is to admit that markets are imperfect. And we musn't do that. Because if markets are imperfect, then the whole faith comes crashing down. The true believers cannot tolerate that. The smarter folks who study this stuff through all of history--doesn't matter if it's Adam Smith or John Keynes or Warren Buffet--have all said expressly that markets are not efficient. Greenspan had his famous (if temporary) come to Jesus moment in front of Congress. Volker said directly that the Great Recession was caused by, "an unjustified faith in rational expectations and market efficiencies." And what is less rational that the cult of Elon Musk? The emperor has no clothes. We can all see it. We know what's coming. But at the same time nobody can see it. Because even though we know better, convention says markets are perfect and efficient. And it's not for most economists or businessmen or politicians or journalists or talking heads or true believers of any other stripe to ever question that. I keep going back to this, but we've all known what the root of all evil was for millennia. Perverse disputings of men of corrupt minds, and destitute of the truth, supposing that gain is godliness: from such withdraw thyself...

When a big name from Princeton tweets something like this...well...as far as I'm concerned it tells anyone vaguely familiar with the scientific method or really any form of post-enlightenment thought all he or she would need to know about the state of the dismal science: It's a faith.

[DSpencer]

Re: Is Tesla TOAST ?

Nice find.

Although the statement "the largest corporate collapse for many decades" seems a bit of hyperbole in these intensely speculative times of chronic excess.

The rest entirely predictable, and many of the factors and expectations of this written up in various threads over the past few years by a number of different iTulipers.
But when the inevitable end for Tesla finally comes I am certain it will be "unexpected" and "nobody could have seen it coming".

How far in advance is one allowed to claim that a company is doomed and still be considered correct when it fails? 1 year? 5 years? 10 years? As you said, iTulipers have been predicting the death of Tesla for years. Nobody ever posts the details of their short position or even just a specific prediction of when this event will happen.

I see Tesla/Musk skeptics everywhere. It's not some some unique, contrarian position to compare him to PT Barnum; there are dozens of articles doing just that. There are still plenty of believers and fanatics out there as well.

Timing is everything. If people are preparing to pat themselves on the back for their foresight, they should at least predict something that could ever be proven wrong. Otherwise we might as well discuss how confident we all feel in the heat death of the universe

[jk]

Re: Is Tesla TOAST ?

the author of the piece i linked to disclosed he is holding tesla puts and put spreads. not clear when he purchased them.

there are plenty of shorts in tesla. last reported short interest in tesla [6/15/18] was a bit over 37million shares, or a little more than 3 days' volume.

note this from the same article:
On the day of that layoff announcement [IN JUNE] and the day after, Musk bought $25 million of Tesla stock, much (and possibly all) of which was done in the illiquid pre-market in order to jam up the price up as much as possible. The effect of this was to cause algorithmic computers to bid the stock up from there, further squeezing shorts and thereby forcing the stock up still higher. Clearly the sole purpose of Musk’s timing (after all, his buy was insignificant relative to his holdings) was to punish short sellers, possibly figuring that if he’s going down, he’ll take as many shorts down with him as he can. Sorry Elon, but we’ll still be here, and we won’t be visiting you where you’re going.

[GRG55]

Re: Is Tesla TOAST ?

How far in advance is one allowed to claim that a company is doomed and still be considered correct when it fails? 1 year? 5 years? 10 years? As you said, iTulipers have been predicting the death of Tesla for years. Nobody ever posts the details of their short position or even just a specific prediction of when this event will happen.

I see Tesla/Musk skeptics everywhere. It's not some some unique, contrarian position to compare him to PT Barnum; there are dozens of articles doing just that. There are still plenty of believers and fanatics out there as well.

Timing is everything. If people are preparing to pat themselves on the back for their foresight, they should at least predict something that could ever be proven wrong. Otherwise we might as well discuss how confident we all feel in the heat death of the universe

LOL. As long as the capital markets are supportive Tesla will survive. The moment the capital markets stop funding it the company dies.

If you can predict how capital markets and Central Banks, who influence the cost of money, will behave you may be able to predict the timing. Otherwise you, like the rest of us, are limited to observing how perfectly nonsensical the circumstances are from a loooong way off.

Personally, I have never been able to make sense of Tesla's business plan. I have never been long Tesla stock, never been short Tesla stock and have no desire to ever own a Tesla automobile. But I am fascinated with the market behaviour that allows companies like this to incinerate investor cash year after year after year. What are these people thinking?

[dcarrigg]

Re: Is Tesla TOAST ?

How far in advance is one allowed to claim that a company is doomed and still be considered correct when it fails? 1 year? 5 years? 10 years? As you said, iTulipers have been predicting the death of Tesla for years. Nobody ever posts the details of their short position or even just a specific prediction of when this event will happen.

I see Tesla/Musk skeptics everywhere. It's not some some unique, contrarian position to compare him to PT Barnum; there are dozens of articles doing just that. There are still plenty of believers and fanatics out there as well.

Timing is everything. If people are preparing to pat themselves on the back for their foresight, they should at least predict something that could ever be proven wrong. Otherwise we might as well discuss how confident we all feel in the heat death of the universe

It's tough. But there is some fairness in your criticism. But, I also think it's fair to point out that there were not dozens of articles doing just that years ago when the the scam was spotted here.

I guess I'd put it this way: It's one thing to know the Emperor has no clothes. It's another to guess when his Court will stop pretending otherwise.

But maybe I could offer up a bit of a comparison? Maybe I could just use odds and timeframes and standard deviations to give you a rough sense of my thoughts?

I'd say 40 years out there's a >68% chance that Ford is still in business (1 sigma event) and a near 0% chance that Tesla is still in business (4 sigma event).
I'd say 20 years out there's a >95% chance that Ford is still in business (2 sigma event) and a <0.3% chance that Tesla is still in business (3 sigma event).
I'd say 10 years out there's a >99.7% chance that Ford is still in business (3 sigma event) and a <5% chance that Tesla is still in business (2 sigma event).
I'd say 5 years out there's a very near 100% chance that Ford is still in business (4 sigma event) and a <32% chance that Tesla is still in business (1 sigma event).

So there's the bell curve. I'd also say the odds are probably better than 50/50 that Tesla goes under in the next 2.5 years. But I can't time the market down to any level of specificity that would be useful for say options buys or something, and I won't pretend to be able to. I have no clue exactly what it will take or when an irrational group of people will snap back to rationality. I do know how to spot a big scam and a group of people falling for it when I see it, though.

[DSpencer]

Re: Is Tesla TOAST ?

Apologies if my comment was too snide, I just find it irksome to see so many non-actionable and virtually non-falsifiable "predictions" that feel well-worn at this point. I certainly understand the difficulty of actually predicting the timing, but timing is half the battle in investing. Maybe GE is TOAST too, but what good is that information to an investor in 1990? I'm sure in hindsight people who didn't load up on Amazon stock can look back and somehow convince themselves that they knew all along they would stop hemorrhaging money and become the second most valuable company in the world.

It's hard to even quantify what counts as being TOAST. If Tesla gets bought out or merges with another company, does that count as still being in business? If they manage to achieve meager profitability eventually, but the stock price plummets as people realize they will never be the world's leading car manufacturer then the investors might be toast while the company lives on.

I've never traded Tesla stock (outside of index funds) and I don't own one either. I don't really know what to make of the company. It seems way overvalued, but I'm not convinced it's worthless. Obviously there is a lot of over-promising and under-delivering. When the Chevy Bolt came out there were plentiful articles doing head-to-head comparisons with the Model 3. I honestly didn't think there was much comparison; the Tesla seemed better looking, faster, and was even slightly cheaper. Of course, the real reason the comparison was silly is for an entirely different reason: you couldn't actually buy a $35,000 Model 3 and a year and a half later you still can't buy one.

Nonetheless, they are making Model 3s and if they can release a $35k version by the end of the year my guess is it would still be the most popular electric car at that price range. It's also been reported that GM is taking a 8-9k loss on each Bolt so the whole fight takes place in economic fantasy land to start with. If Tesla is even close to profitability then they would be way ahead of the electric car game at that price.

I don't really understand the comparisons to Theranos. Is there evidence of that type of fraud? That seems like the equivalent of Tesla secretly using IC engines while pretending to make all electric cars. At a minimum they seem to be actually producing functioning cars that perform as advertised and people enjoy driving. Theranos appears to have been a true Vaporware company where its core product simply cannot perform its essential function.

[dcarrigg]

Re: Is Tesla TOAST ?

DS, I think you're taking the comparisons to Theranos too specifically/literally--or at least more than I've ever intended them. The commonality is too much hot investment capital--the ease with which a company, if it's in the Valley and labeled as tech, can raise billions of dollars even if there's nothing to warrant it but hype. Tesla gets to lose a billion dollars per quarter, miss all kinds of deadlines, promise a $49 k Model S and end up starting at $71k and promise a $35k Model 3 and end up at $49k, etc. and investors react by...investing more? It's bananas. Imagine what would happen to Ford's stock if they promised a $35k electric F-150 and it came out years late starting at $49k...do you think it wouldn't tank hard? Yet Musk renames an old Toyota/GM plant an "alien dreadnaught" and finishes the line work by hand in a tent, and suddenly failure even by the CEOs own guidance and targets is not only not a problem, his market cap exceeds major auto makers that make millions more cars in plants worldwide. Meanwhile, at this one small old plant, te Model S is on its 7th production year, 10 years since the prototype came out, and they don't have any new generation in the pipeline. Same body; same chassis. Model X is old too. Everyone from Jaguar to Porsche and in between is coming out with new and beautiful competitors starting this year that make the model s and x really look as old as they are.

Here's a couple pictures for you. The competition is real. And I don't know how much demand is really out there for ultra-luxury EVs in the $60-$120k price range. But it will be a crowded field. The lack of refresh/new generation-models in the pipeline is real. The missing production targets is real. The USSR-style reserve a car for thousands years before you can get one model is real. The over-promises and under-deliveries are real. The lack of dealer networks and garage infrastructure to handle recalls and maintenance at scale is real. If Wall Street considered Tesla a car company and not a tech company, it would be hammered down to a tenth its market cap by now. But Moon Man Musk bamboozles them all.

PS: I'll make another prediction for you: The $35k Model 3 will never be produced in any significant numbers, just like the $49k Model S never was. What was it George W. said?

[Mega]

Re: Is Tesla TOAST ?

Jumped Ship?
https://www.zerohedge.com/news/2018-...ineer-has-left

[GRG55]

Re: Is Tesla TOAST ?

Tesla can't afford to produce a $35k Model Anything.
It's a low volume, high cost, inefficient, hand-build car assembler.
As long as it was making small numbers of expensive Model S and X luxury vehicles, with some margin and the tax credits, the business model sort of worked.
The "mass market" Model 3 is the kiss of death; and that's no surprise to anyone here I'm sure.

And now, like so many car makers before it (American Motors, Studebaker and Chrysler but three contemporary examples) as you so correctly note Tesla does not have the cash and other resources to make the development investments it desperately needs in its flagship product to survive without ongoing support from "irrationally exuberant" capital markets.

[jk]

Re: Is Tesla TOAST ?

tesla doesn't need to update the model s. it is in the process of becoming the 21st century's delorean - a timeless classic and a business failure. it will be a central prop when someday they remake "back to the future." [or maybe they'll use a model x to repeat the gull wings.]

[dcarrigg]

Re: Is Tesla TOAST ?

Jumped Ship?
https://www.zerohedge.com/news/2018-...ineer-has-left

Mega, I think you'll like this:

Correction: A Tesla spokesperson reached out to clarify that Field was NOT the top engineer at Tesla, but rather that he was the top vehicle engineer. Much as there can only be one God, there can only be one Top Engineer at Tesla, who is Elon Musk. Second engineer at Tesla is JB Straubel. - M.B.

His spox literally compared him to God. Hahahahaha

[DSpencer]

Re: Is Tesla TOAST ?

DS, I think you're taking the comparisons to Theranos too specifically/literally--or at least more than I've ever intended them. The commonality is too much hot investment capital--the ease with which a company, if it's in the Valley and labeled as tech, can raise billions of dollars even if there's nothing to warrant it but hype. Tesla gets to lose a billion dollars per quarter, miss all kinds of deadlines, promise a $49 k Model S and end up starting at $71k and promise a $35k Model 3 and end up at $49k, etc. and investors react by...investing more? It's bananas. Imagine what would happen to Ford's stock if they promised a $35k electric F-150 and it came out years late starting at $49k...do you think it wouldn't tank hard? Yet Musk renames an old Toyota/GM plant an "alien dreadnaught" and finishes the line work by hand in a tent, and suddenly failure even by the CEOs own guidance and targets is not only not a problem, his market cap exceeds major auto makers that make millions more cars in plants worldwide. Meanwhile, at this one small old plant, te Model S is on its 7th production year, 10 years since the prototype came out, and they don't have any new generation in the pipeline. Same body; same chassis. Model X is old too. Everyone from Jaguar to Porsche and in between is coming out with new and beautiful competitors starting this year that make the model s and x really look as old as they are.

Here's a couple pictures for you. The competition is real. And I don't know how much demand is really out there for ultra-luxury EVs in the $60-$120k price range. But it will be a crowded field. The lack of refresh/new generation-models in the pipeline is real. The missing production targets is real. The USSR-style reserve a car for thousands years before you can get one model is real. The over-promises and under-deliveries are real. The lack of dealer networks and garage infrastructure to handle recalls and maintenance at scale is real. If Wall Street considered Tesla a car company and not a tech company, it would be hammered down to a tenth its market cap by now. But Moon Man Musk bamboozles them all.

PS: I'll make another prediction for you: The $35k Model 3 will never be produced in any significant numbers, just like the $49k Model S never was. What was it George W. said?

The Theranos comment was mainly a reference to the end of the article that JK quoted implying (I think) that Elon Musk will end up being charged with fraud and imprisoned.

There's no doubt that the hype/spin is out of control. I have always felt that the real test for Tesla would be when the other car companies get serious about competing in the all-electric space. I don't have enough information to know if Tesla has any real-world technology advantage from their head start or if that can be erased overnight with deep pockets by hiring (even poaching) the right talent. I also don't know if their semi-autonomous driving feature is worth anything or if the other companies will simply contract Google or whoever if/when the time comes with no real competitive disadvantage.

PS: C'mon! Give us a concrete prediction! How many is significant? What time frame are we talking? It's all just for fun on the internet.

[DSpencer]

Re: Is Tesla TOAST ?

Tesla can't afford to produce a $35k Model Anything.
It's a low volume, high cost, inefficient, hand-build car assembler.
As long as it was making small numbers of expensive Model S and X luxury vehicles, with some margin and the tax credits, the business model sort of worked.
The "mass market" Model 3 is the kiss of death; and that's no surprise to anyone here I'm sure.

And now, like so many car makers before it (American Motors, Studebaker and Chrysler but three contemporary examples) as you so correctly note Tesla does not have the cash and other resources to make the development investments it desperately needs in its flagship product to survive without ongoing support from "irrationally exuberant" capital markets.

It's definitely interesting that Elon himself tweeted that the company can't sell the Model 3 for $35k right now or the company will die.

The ridiculous way that the tax credits are structured (per manufacturer instead of just first X number of electric cars) will certainly start to work against Tesla unless Musk can pull another government favor out of the hat which seems unlikely currently.

[dcarrigg]

Re: Is Tesla TOAST ?

PS: C'mon! Give us a concrete prediction! How many is significant? What time frame are we talking? It's all just for fun on the internet.

I don't know. I'm the one who doesn't think markets are efficient. I don't think this is rational. It's like trying to predict the exact time when the drunkest maniac at a looney bin christmas party will drop his pants. But I'll tell you the thought process and try to come up with some reasonable bounds that keep us away from "heat death of the universe" territory.

Think of it this way, just like he dropped Model 3 production 1,000-2,000 per week for weeks 2 and 3 of June so that he could have the 5,000 ready to push out in week 4, Musk can put some number of Model 3s together with something like the specs he said and sell them at a loss for $35k if he really wants to. But he can't do it profitably. He would be doing it just to say he did it and to stop the brand from losing all credibility. Still, it will come at a great cost if he does.

See, he can't do it at scale without bankrupting the company. He pulled the same thing with the Model S too. He made a few $49k Model Ss just to say he delivered on his promise, but he couldn't build them at scale, and customers who weren't on the inner circle list couldn't buy them, and the only options to configure online were the $71k+ options, just like the $49k+ options for the Model 3.

Musk made a few hundred of the $49k Model S cars. Fewer than 1,000. And it's not entirely clear how the people who got them got them. Actually, it was supposed to be cheaper than the $71k Model S because it had a smaller 40kW battery for a powerplant instead of the larger 60kW. But they never even manufactured or bought a 40kW system. They simply used software to hobble a 60kW Model S to get half the range and sold it at a loss. In fact, it's even worse than that. If you buy a Model S even with the 60kW or 75kW battery packs, you're actually getting 85kW battery packs hobbled by software, and if you crack them open, they're identical. He's selling those broadly at a loss too and charging customers thousands of dollars for software to "unlock" the power in the hardware they already bought. Truth was, they could only afford to manufacture one version at a time and the idea of different options here are all gimmicks.

I mean, imagine if you could buy a 4 cylinder ICE car or a 6 cylinder one for $5,000 more, and you come to find out that the 4 is really a just the same 6 cylinder engine with two pistons disabled and a governor...insanity.

So where was I...

Numbers? I don't know. I still don't know how many of the 40kW Model Ss were ever made and sold at $49k. Probably about 500 or so. Tesla never made that clear. So it's possible we may never have good reporting to compare any prediction to.

But let's say Musk wants to do a similar stunt for the $35k Model 3 he did for the $49k Model S. He'll probably have to make a good deal more to have it be convincing, but his market cap is much higher now. He'd probably lose about $15k per car. Say a six months to a year from now or so he actually gets enough tents and other crap together to cobble together regular 5k weekly production runs. And say he decides to run a month of the $35k version off. That's probably about 20k cars at a $300M monthly loss. Or ~$3.5 billion per year.

Combine that with the idea that they have ~$10 billion in debt already with ~$1.8 billion coming due before the end of 2019 and the fact they had $3.5 billion in negative cash flow in 2017, and let's just say I'm supremely confident they can't hit the ~400,000 car deposit figure they tout, or even come close to it. Even if they got their act together in 6 months, pushed out 5k per week consistently, and just ate losses at current rates, you're looking at a 20 month required production run of exclusively $35k Model 3s (assuming zero new sales) resulting in a loss of about $30 billion, and at this point Tesla is almost certainly bankrupt.

So, a lot of those figures have to be bunk. Musk has to push nearly all of the demand up to the $49k model, probably by offering extended term financing (they're offering 1.99% at 84 months now, I believe, but they'll have to stretch it to beyond 7 years probably--and yes, they already offer 96 month loans on the Model S and X, but at 3.9%, and third party lenders are offering 120+ month loans now too) So we're talking a lot of 8 year car loans being a big part of the plan here. He's going to need a hell of a sales crew to push everyone, but he already has been pushing Model 3 reservation holders to buy Model S cars. And he'll have to pull the same thing he did with the $49k Model S--don't make it until years late and spend the intervening months pushing everyone you can into a higher-priced model with longer-term financing, then claim there was not enough demand to do a mass-run on the cheap model and scrap it, only fulfilling a few reservations of people who probably got in early and were really patient and stubborn, and only at a great loss.

Point is, the $35k Model 3 can be created as a gimmick to save face for the brand's reputation, but only at a pretty significant cost. This is why Musk says Tesla would die if it started selling them now. Even he's aware of that. That's why if you have a reservation now, they'll tempt you with delivery in the next few weeks and the same monthly payment (for several more years) if you go with the $49k option over the $35k option (which still doesn't come with a delivery date, only a vague 'starting in late 2018'). So see the game Tesla's playing here? The next six months minimum are about up-selling to a model that doesn't bleed so much cash.

But remember the ~1.8 billion in debt? Here's the problem: Even though Musk has magically irrational almost limitless support in the equities markets, he doesn't in the corporate debt markets. Moody's already downgraded it again a month or two ago. The 2025 notes are pushing 8%. Amex will give me an unsecured loan cheaper than that. They're lending out 8 year loans on cars for half that rate. Anyways, they're not getting the cashflow to have $2bn on hand. They had only $2.4 billion on hand at the end of Q1, and they lost $785m in the Q1 earnings report. If they have to raise cash to pay debt service, they're only going to do it at outrageous interest rates by floating junk or by somehow having Musk pull more flash powder out of his behind that bamboozles equity investors into driving a few more billion into the cash incinerator. Reality is, that will probably be the two-pronged approach. So look for some nonsense behind a waving right hand about Model Y and Electric Trucks and Flying Cars powered by Saturn's Rings at the same time he uses his left hand to borrow cash at 10% interest.

So let's sum up a little. He'll have pissed through his cash on hand by fall 2018 almost certainly. Publicly he has announced he has delayed any $35k delivery at this point to "late 2018," which is the point he'll have run out of cash. He needs $2bn more in cash in 2019 just to break even. Even if we take their word on a 20% gross margin on the expensive versions, they're losing money on the $35k version almost certainly (even at 15% gross margin given SG&A costs, which scale linearly simultaneously with sales when you don't have a dealership network). So he just cannot sell too many $35k base Model 3s without killing the company. That's why customer service is actively trying to refund the $1,000 deposit or convert people into giving another $1,500 for a non-refundable $49k+ deposit with a delivery date--both a cash raise and a way to push people out of the $35k Model 3 ordering pool.

But they're telling people on the phone 2019 (even if they say late 2018 on the website), and I think 2019 it will have to be. So probably sometime between January and a year from now (Q1-Q2 2019) they'll make a few if they have to. They have a big tranche of debt due come end of Q3 2019, so they're going to try to bend the cashflow curve before then--e.g. that's a particularly bad time to be losing money on all your production. But regardless, they will only make the fewest number they possibly can. Then they will cancel the base $35k version of the Model 3 and stop taking further orders of it. They will blame low demand. But they will have done every trick in the book to push demand away from that base model. They'll need a cash raise to cover it. Probably they'll need to raise cash in the winter of 2018. And the size of the cash raise will probably give you a sense of how much money they think they'll blow. They also have lots of lawsuits and other pending legal actions against them. He's probably going to need to raise ~$4 billion. And it's not going to be cheap. Maybe add an extra billion in for a run of losses on ~60,000 $35k Model 3s while you're at it? Sure, it's possible. But it'll be one-time, not ongoing, they'll cancel future sales of that base model, and that will be that.

And the real kick in the ass? They're losing the $7.5k credit. They already refuse to promise it to new reservations. So that is bye-bye. It won't happen.

So you want a sigma-style breakdown again? 120k is the most extreme upper bound. 60k is the realistic upper bound. 6k is the realistic lower bound. 0 is the most extreme lower bound. Either way, they cannot keep taking new reservations for these things, so they need to cancel the model. Timeframe? They're saying all sorts of different things, on the phone, and online. This page says if you reserve one now it will take 6 to 9 months. I think it's probably more like 9 to 12 months, with maybe some existing reservations getting delivered in the 6 to 9 month from now span, maybe. The next 6 months will be about converting every one of those reservations possible to higher-end, non-base models.

By about six months from now they will cancel the base model and stop taking reservations for more. They will cite low demand or safety or some other silly reason, but it's just cash flow. And by that same time, they will need to raise capital to fund their existing debt service and the losses they will be about to take on the base model. At this point, if equity investors haven't already panic-sold, they'll do a short run. They'll probably also panic come the end of Q1 2019 and switch to more profitable ones again to show the curve bending in their favor. Then they might do some more in Q2.

But by the end of Q3 2019, they have a lot of debt come due, so they'll have to try to save a pile of high-margin orders for just then. And then what? The total numbers built will be way below promises. We still won't be near profitability. And we'll probably be talking a company with minimum $13 billion in high-yield debt on the books, very few assets to show for it, and no more believable pathway to mass-market scale. At that point, I don't even know how you sell the equity any more. Unless he comes out with the Model Pleb or something and promises a $20k car in 2023 and people are dumb enough to believe it and ride the merry-go-round for another 5 or 10 years...but eventually the debt levels are such an albatross that it's going to look like what happened to Toys R' Us when Bain was done with them.

If I recall, Musk's pay package is $2.5 billion, dependent on getting TSLA to $650 billion market cap by 2025. That's not a real package. That's not a real figure. At $650 billion, Tesla would be bigger than GM, Ford, Toyota, Honda, Nissan, BMW, and Mercedes combined. What do you think the odds are of that (really?) So Musk himself isn't even planning on being there in 10 years. That's what that tells me. And he doesn't strike me as the type of captain that goes down with the ship. At some point he's going to "leave to focus on SpaceX."