Is Tesla On The Verge of Bankruptcy?
The Market Ticker - Commentary on The Capital Markets
2017-11-19 13:56 by Karl Denninger
in Company Specific , 1142 references Ignore this thread
Is Tesla On The Verge of Bankruptcy?
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If you want one of their alleged "Super-Roadsters" you need to ante up $5,000 now plus $245,000 more within 10 days by wire transfer.

Note that the car will not be "ready" and "deliverable" for three years according to Master Touter Musk.

What happens if "three years" turns into "never"?

You flushed $250,000 down the toilet.

May I remind you that Tesla is a money-losing enterprise and has been since it was founded.  It has never made a profit, it has zero in retained earnings and you will be an unsecured, back-of-the-line creditor with your "reservation" -- which they will spend the minute it comes in the door.

If the "Reservation" was a modest amount of money this might be defensible.  $5,000 as a punt on a "supercar"?  Sure, why not.

When it's a quarter of a million bucks it not only is indefensible in my opinion the solicitation of same borders on criminal fraud since the company has absolutely no reasonable reason to believe it will be able to ever deliver said car.

Let me remind you that their "example" shown was damn fast and impressive.

It also almost-assuredly had nearly zero range, was "damn fast" because it intentionally had nearly no battery in it and thus might have had a range of a few miles in its "present" configuration which was simply "stick big electric amp-sucker on each wheel and it breaks the 3-second barrier, damn actual ability to use said vehicle for more than a stunt showing to Hell."

You cannot get around physics folks.  Tesla is betting you will fork up a quarter million dollars for something they cannot deliver now, might never be able to deliver as I suspect the technology necessary in the battery department to do it within the weight and power budget does not currently exist in a form that can be manufactured and further, the company may not exist in three years as it only does so today due to being able to continually go back to the well of Wall Street and either issue more stock or debt to fund the charismatic preaching of Elon Musk which thus far has translated into losing money on each vehicle made.

One "market disruption" that occurs at the wrong time and Tesla is literally out of money and out of business.

If that happens, which I believe is quite likely, your $250 large is going to go "poof" like a fart in a church.

Oh, may I remind you that EV subsidies, which have enabled Tesla to run a "tax farm", are going away -- and may well precipitate that "market disruption"?

Musk ought to be in prison for running this crap.

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