Liberty

Video presentation of Tarasoff (55 minutes): https://www.youtube.com/watch?v=0m18fG6FQpE Found via Ian Cassel.

Since you asked, me. AWS capital base is increasing just as fast if not more than its revenue and profit is growing. Its not a tech company, it gets the same margins and EBITDA with the same amount of PPE as a utility. Sounds like a great short, then, no? Guess he's just lucky to have gotten away with it for 20 years and personally made 95 billion in the process of not caring about returns on his invested capital...

Who believes Bezos doesn't care about the returns he's getting on his invested capital? ???

Thanks, Rishi. Very interesting dynamic. I think Priceline is being smart here, playing the long game.

I don't think I've ever seen a company with this scale of ambitiousness (if that's a word). I'm still not sure if Musk is a genius or a crazy person. Or most likely both, because the only company I can think of with crazier and loftier ambitions than Tesla is Space-X. The stock price shows that, at least for now, the capital markets are willing to support him. I don't know why he isn't taking advantage of that and issuing shares like crazy to fund everything he wants to do. Maybe he succeeds or maybe it all blows up spectacularly, but one way or the other it will be fun to watch. Agreed on the ambition. I think he's very aggressive but also I think he feels back-stopped. If things went wrong and he needed cash and couldn't access the capital markets, he would probably do a deal with Google (they almost bought Tesla in 2012, Larry Page is a friend of Musk) or Apple or Tencent or whatever. Might not be the greatest deal for him personally, but I think the company would carry on.

I think it has happened a lot before, but what has changed is the size of these companies. From startup, it's not been that weird to see companies develop products and production and distribution channels and invest in brands and such for many years, but that more often happened at the micro to small cap level, and these were not in the public eye. Now, with the internet and globalized markets and large capital markets, companies can go through that phase at a much bigger scale, but mostly because they're also chasing bigger markets, but also because they can be more visible on the net. Tesla isn't spending much on marketing (if at all), but people are excited enough about their products that they're constantly in the public eye. That couldn't really have happened before the internet.

Once in a while, anyone should look to see if their theories have any value. Hussman has been wrong for so long, I wonder why anyone listens to him. Even if what he predicts does end up happening someday, someone would be richer by not having listened to him at all than by having listened to him. Opportunity costs are real. The problem with perma bears in a world where stock markets are up way more than they are down on average over the long-term is that it leads to something like this: "This is a fake market, a house of card, it'll crash any day now, look at these charts and metrics, better stay cash and/or short" *market doubles or triples over many years* "Any day now the big one will come!" *Market falls 20%* "This is the big one! The 50%+ drop, great depression, here we come! I'll just wait a bit more before deploying capital..." *Market bounces back* "This is a dead cat bounce, it'll start falling again any day now" *Market keeps growing for a few more years before another 10% correction* "The big one is coming any day now! We're still too high on the CAPE, look at the gold ratio, these debt levels... Someday I'll get to invest that cash at great depression levels!" *years pass* Meanwhile, someone who started with the same capital and just rode it all out in great companies generating good returns is probably 10x richer than the permabear.

Succeed at WHAT exactly? In a capitalist mindset the goal is to make a profit on each car. Right now they have never done so, and they have been around how many years? If you think eventually they will make a profit per car, can we put a estimate on when? at the 400,000th Model 3? or the next model, or the next model after that? Musk has always said that his primary goal with Tesla was to accelerate the transition to electric transportation. That's why he opened up all his patents to other companies, not something he'd have done otherwise. On that front he's pretty successful so far. Even Bob Lutz said that GM would never have done the Volt if Tesla hadn't shown EVs could be desirable with their original Roadster, and there's no doubt that the legacy automakers with huge sunk cost investments in ICEs would be taking their time A LOT more for EV if Tesla didn't exist. He's probably accelerated the transition to EVs by multiple years, and the EVs we'll get are going to be of a much higher calibre than they otherwise would be become of the Tesla benchmark (otherwise automakers would've made crippled EVs that cannibalize their ICEs as little as possible, like Nissan did with the LEAF). I'm sure Musk also wants Tesla to be profitable and sustainable. That's not proven yet, but I think that if the company can make it through to scaled production of Model 3, I don't see a reason why they'd lose money selling cars. Right now it's not like Model S and X couldn't be profitable, it's that they've invested billions in new factories and developing new models and complex software and such. If they were just making Model S/X and nothing else, you think they couldn't be profitable (with battery costs dropping each year, etc)? Now whether the stock will do this or that is another question. I have no opinion on that.

I don't think you're comparing apples to apples. Pretty sure that many of those 6000 (which is a 2016 number) at the Fremont plant are doing all kinds of others things, like R&D and software, autopilot, and working on next models (Y, truck, Semi, Roadster) and building the lines for the Model 3 and such. At the old NUMMI plant, this was just assembly of vehicles afaik. The requirements are also very different for a mature plant than for one for a company growing revenues/units at rates of 50-100% YoY. In other words, you don't need as many people to maintain a stable system than to build and maintain a rapidly changing system. But I could be wrong.

whats elons interest in the company? his reputation. and 33 million shares Proxy says "Shares Beneficially Owned" is 37,193,974, or 26.5% of the company. I think he also owns some of the debt/debentures, but haven't really followed that, so not sure and don't feel like digging it up right now.

This is what good online marketing looks like: Some couple selling their 1996 Honda Accord made a commercial on Youtube that got viral: CarMax responded with this: It cost them around $20k for a ton of good publicity and makes their brand looks pretty cool...

If I was Musk I'd have issued more equity too to have a few more billions in cash in the bank as a buffer to get through the Model 3/Gigafactory ramp up, but his risk tolerance is much higher than mine, and I'm sure people were telling him to issue tons of equity around when the Model S was ramping up too, and back then the stock was in the $30-range, so ¯\_(ツ)_/¯

Thanks, sarganaga. I can't comment on the actual business, as I just looked at the financials (I try to at least have a quick look when I see a name I haven't seen before), so I know there's a large part of the picture that I'm missing. If it's indeed stable and they can get decent returns on capital because of a moat, then there might be a delevering story. Not knowing the past history of the business, my next question would be how did they get in the current situation and why debt has gone up so much and returns haven't been that good for many years (a turnaround story too?), but I know that's another tangent and I'll move it to the company's thread if I want to know more. Thanks.

Finally re-stumbled on the chart I was referring to somewhere else in this thread: https://steinbuch.wordpress.com/2017/06/12/photovoltaic-growth-reality-versus-projections-of-the-international-energy-agency/

Thanks. Have you calculated how big a shock the company could absorb before the debt becomes unmanageable? ie. Some unforeseen delay/downturn/bad luck cuts EBITDA by 10/20/30%? I'm wondering because just looking at the past few years, it looks like op. income is volatile by more than 40% over short periods. By unmanageable I don't necessarily mean it kills it. These companies tend to sell assets in those situations... But that still impairs the value, especially since it's hard to get good prices on distressed sales. Like burning the furniture for heat...

Hour-long video of Jeff Bezos with his brother Mark:

Just had a glance out of curiosity. Are you not worried by the debt-to-EBITDA levels?

https://www.youtube.com/watch?v=MeZ3fKSWmcs It's refreshing to hear someone who doesn't stand for BS... "People mistook leverage for genius." "Incentives trump ethics all the time." “Everybody in this chain was paid on volume, nobody was paid on quality.” "Hard to argue with someone who thinks he’s god because making more money every year." (found via John Huber on Twitter)

And here's the transcript: https://www.cnbc.com/2017/11/16/cnbc-exclusive-cnbc-transcript-liberty-media-chairman-john-malone-speaks-with-cnbcs-david-faber-today.html

Liberty, you could get exposure to the jet engine business of GE via Safran (relatively more of a pure play in aero). GE's leadership in the jet engine space is in the narrow body segment is via its CFM engines. Every CFM engine is made by GE and Safran in partnership and the economics are probably equally good for both parties here. Thanks for the suggestion, Rishi, I appreciate it.

I think he supports some of his policies. I do too (lower corporate taxes I have nothing against, though the way to get there is a different question...). I agreed with some George W. Bush policies too. Pretty different from being a supporter of either guys.. Malone won't go on TV and say negative things about almost anyone, not his style. Go to Barry Diller for that: https://www.cnbc.com/video/2017/07/12/barry-diller-on-trump-hopefully-will-be-over-soon.html

Mexico doesn't even have 1GW of solar power yet afaik (around 180MW last year). Storage isn't an issue at this point, that's what I said. On very sunny days when these solar farms will produce most, A/C use will be at its highest and the grid will easily absorb all that power and some other peaker plants just won't turn on, reducing pollution. Now in many years when solar is 20-30% of the grid, then yes, storage will be an issue. By then storage costs will also have come down a lot (including V2G and demand-response, as EVs come in by millions), and the grids everywhere will be a lot smarter and more interconnected so that if Mexico has a surplus of solar power it might send some up or down to neighboring countries and vice versa, as well as store some in things like grid-scale batteries, pumped hydro, etc. If it all happens overnight it's a problem, but a gradual ramp up, as any infrastructure change is, is fine. Of course it's a challenge, but building out the internet was also a challenge, but it was done because it was worth it. Building some transmission lines to then get almost free and clean power for decades is also worth it. In one specific spot renewables are very variables, but over large areas, and across categories like wind (onshore and offshore) & solar, things are a lot more predictable. It's like how hundreds of stocks might be a lot more volatile individually than an index that smooths things out. That's why more interconnected grids will happen, because while it might be cloudy somewhere, somewhere else it might be very sunny and windy and excess power can be moved across regions.

That's good writing right there. I hope it's also correct, but just the imagery is worth it.

Direct links: https://www.tesla.com/roadster/ https://www.tesla.com/semi/

No need to store anything until much further penetration. The grid will easily absorb all that.