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Friday, December 28, 2012

Tesla Motors ... Another Elite Theme in Collapse?

By Staff Report
21

Why you shouldn't invest in Tesla stock ... Financials resemble those of many struggling firms ... In my last column, I wrote that Tesla Motors Inc. would have to go back to the federal government for more loans next year to stay afloat, given the state of the company's finances. Those finances include four consecutive quarters of widening net losses, four consecutive quarters of larger operating deficits and a balance sheet that was in the red at the end of the third quarter. – John Shinal, Wall Street Journal

Dominant Social Theme: Tesla, a groundbreaking electric car company, will go on to bigger and better things for sure!

Free Market Analysis: John Shinal is back with a second article blasting Tesla, an advanced technology (green) auto company that makes both electric cars and power train components. Tesla trades on the Nasdaq under TSLA.

As both a public company and a leading electric car manufacturer, Tesla receives a lot of scrutiny for both its product and its financials. Tesla's ¨big idea¨ is the Tesla Roadster, an electric sports car, and more recently, another big idea, the Model S, which is a luxury sedan.

The fundamental vision is to make electric cars that are just as good if not better than gas-powered cars, The dominant social theme, therefore, is that the world needs topnotch ¨clean energy¨ for the soul and also so that carbon doesn't clog the atmosphere.

A subdominant social theme would be, ¨Drive Teslas because they are fun and because you are a responsible citizen ... and now you have a way to illustrate it."

Of course, a cursory examination of global warming evidence brings us smack up against an inconvenient truth ... that global warming probably doesn't exist and that even if it did, the amount of manmade carbon in the atmosphere (versus water based greenhouse elements) won't affect the atmosphere's balance one way or another.

And that offers the question ... Why bother to make electric autos?

This is a question, in our view, that car companies have yet to answer. The technology remains clunky, the range is restricted and often the cars themselves sacrifice solidity for mileage.

Nonetheless, Tesla Motors has gained widespread attention by producing the Tesla Roadster, the first fully electric sports car, according to company literature. And now the Model S sedan is scheduled for production.

Tesla's autos are fairly expensive and the Roadster has received mixed reviews. But few have questioned the solidity of Tesla's financials until recently.

But now John Shinal has cast some doubt on this aspect of Tesla Motors. Shinal has pointed out the company might have to sell additional public stock to fund operations. The company bled US$223 million for the trailing 12 months ending in September.

Going to the public markets is not apparently a painful option for Tesla, as the company has been successful in raising gobs of money in the past. According to the article, Tesla raised "about $195 million in a follow-on offering executed and underwritten by Goldman Sachs, selling 6.93 million shares at $28.25 each."

Shinal is blunt about the offering and Goldman's part in it, which he finds suspicious because of Goldman's track record on numerous fronts. Here's some more from the article ...

Goldman Sachs Group Inc. (US:GS), you might recall, was one of the investment banks that sold mortgage securities to private investors and governments around the globe in the last decade. Within several years, those securities turned out to be worth only a fraction of what they had paid Goldman. The same fate likely awaits the buyers of the Tesla shares in that offering ...

Our question is even more fundamental than whether or not Tesla will make a profit. As we mentioned above, we're focused on why these kinds of cars are being produced in the first place.

To us it is a triumph of elite dominant social themes over reality. The reality is that climate change is surely a kind of manufactured crisis and these kinds of cars are an incompetent response to a nonexistent problem.

Investors who follow elite dominant social themes are perhaps more likely than others to be wary of these kinds of episodes. When one understands scarcity memes and the lengths to which the power elite will go to propose statist solutions, then one is apt to be careful about investing in the ¨latest and greatest¨ technology.

We harp on this only because it would seem that Tesla provides us with yet another clear cut example of how these themes work and how the solutions being proposed are often more promotional than realistic.

Conclusion: Understanding the world around you and the way it REALLY works can help you protect your family, your community and your wallet as well.




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  Posted by robharward on 01/02/13 02:39 AM

To answer your question, "Why make electric cars?" the free market responds, "Why not? If it serves certain people who are interested and willing to pay for it, the market allows competition."

We have little competition in the auto fuel industry today. I followed Tesla Motors while it was under Martin Eberhard, and it was not about saving the planet, but trying out a winning combination - lithium batteries and electric sports cars! Last time I checked lithium was bad for the environment and each Tesla Roadster uses over 5000 Li cells. Martin Eberhard was one of the original inventors and had it in his sights to give the tired, sloppy auto industry something it hadn't seen since Japanese automation - true competition. And with 250 mile range and a 4 hour recharge, he was closer to making the electric car competetive than anyone had ever come.

Unfortunately, Elon Musk was a poor choice as a financer. Elon basically took over the day to day operations and drove Martin Eberhard out of the picture, much to the dismay of the whole company (it is small and tight knit). Elon did make some important changes, so they say, but he ultimately is also the problem because he doesn't have the vision of making Tesla something that can shake up the establishments oil monopoly. Rather, it looks like he plays ball and is keeping the company at bay or driving it into the ground (hey, he has bigger fish with NASA and can afford it).

It is truly a sad day. I was hoping to own one of these fabulous cars in retirement. The choice of gas or electric will only be for kitchen stoves for the forseeable future and beware any other inventor who wants to make a stab at making oil obsolete. Many have tried and all have run aground on the corrupt machine that is the oil trade.

  Posted by dave jr on 12/29/12 10:36 PM

"Won't make a difference. Seer is evidently here for a "reason." "

That is not fair. Fracking is costly and energy intensive plus the enviromental hazards and the yapping boobs to boot. All around it is costing more energy to extract energy. We need to wrap our heads around this concept. Then we can talk constructivly about our energy situation.

  Posted by magna carta on 12/29/12 08:38 PM

Posted by Seer,**The USA passed peak oil production in 1970- not debatable- and unless the USA should suddenly find a massive pool-not going to happen.**

But in fact Seer the US is rapidly approaching energy self sufficiency in oil. Due to Fracking and horizontal drilling oil is gushing out of places like the Bakken, The Marcellus, The Eagle Ford, The SCOOP and others.

Tens and tens and tens of billions of gallons have been found and in North Dakota they are producing over 750,000 barrels per day and it is rising as fast as they can drill. The same is going on in the other fields I mentioned and also lots of other fields including old fields that are being brought back on line or whose volume is increasing.

Peak oil is a fake and if the fools in Washington don't try to get too involved, we will be selling oil to other nations. And I havn't even mentioned the NatGas in the trillions and trillions and trillions of cubic feet.

Reply from The Daily Bell

Won't make a difference. Seer is evidently fere for a "reason."

  Posted by JM on 12/29/12 02:11 PM

What if the guys at Tesla Motors knew something? What if they knew the secrets of Nikola's Pierce Arrow and have a "radiant energy reciver" all ready to plop into their buggies when the time is right.

Click to view link

There might even be a connection to their government financing -- one way for TPTB to control the release of knowledge about "the wheelwork of nature".

  Posted by IndianaJohn on 12/29/12 12:32 PM

I own a couple of electric cars that were perfected decades ago and proven ever since then. They're named 'Club Car'. Also I have a gasoline powered Club Car. That's the one that I use when it's time go go somewhere.

  Posted by dave jr on 12/29/12 12:13 PM

"To subsidize luxury roadsters is irrational and insane and only serves to validate how inefficient the US government has become".

Government has never been efficient, except for death and destruction. All spectacular things can happen without government. And inefficiency is not a product of the free market. It is a matter of the degree to which government (force) is involved. It pays then to look at who or what is really sponsoring government.

  Posted by seer on 12/29/12 11:41 AM

Of course, a cursory examination of global warming evidence brings us smack up against an inconvenient truth ... that global warming probably doesn't exist and that even if it did, the amount of man made carbon in the atmosphere (versus water based greenhouse elements) won't affect the atmosphere's balance one way or another. The author misses the point entirely. The USA passed peak oil production in 1970- not debatable- and unless the USA should suddenly find a massive pool- not going to happen. Tesla went wrong by failing to build a commuter car for the masses at a reasonable price aka Henry Ford. To subsidize luxury roadsters is irrational and insane and only serves to validate how inefficient the US government has become.

Reply from The Daily Bell

Is there a single elite scarcity meme you haven't fallen for or don't wish to regurgitate here? Just ONE you would deny?

  Posted by dave jr on 12/29/12 08:59 AM

Hmmm, is it an automobile or a laundry machine?

Unless the electricity comes from a windmill, which needs to be backed by existing coal plants, these cars might put out more CO2 than their fire breathing cousin, due to effiency loss in the energy conversions.

But I would be in with a glorified golf cart, as a gofer machine, if one were offered for less than, say 15 to $20K. And there is no reason it couldn't be done as the drive line could be off the shelf parts, using deep cycle AGM batteries. Even if it only had a top speed of 65 mph and a 50 mile range.

It is a non-starter though, as a high production automobile, as the electrical grid could not withstand its widespread use.

  Posted by Merridth80 on 12/29/12 07:52 AM

Talking about getting your money's worth, Tesla has an idea for a real hard asset, but there is someone on the TV & I-net selling an idea which is a bait & switch, more or less! If you buy one of his systems, that is touted "with unlimited HELP, you find that help is in the form of "Well that feature is not included in your system.

Then there is the "Try it for 30 days" , during which you can not get a question answered, or after the thirty days you pay for the whole thing whether you can make it work or not. But the "HELP" scenario is just more e-mails basically tlling you that your system did not come with that feature!

TOP that one!But this kid has made millions by doing this to people who take him at his word of genuine help] But the "unlimited help is just not there and neither is the answer to your Questions!

Well Tesla is up front!

  Posted by provolone on 12/28/12 11:37 PM

I am all for skepticism and certainly there are those who will benefit from the global warming meme. I disagree with the concept of state planned economies and corporate welfare. I do not subscribe to statist rhetoric, social contracts, or taxes. However, I do think that interested engineers should have a shot at building an electric car.

Regardless of the efficiency or environmental impact, if private individuals get together and plan to produce an electric automobile; What is the harm?

Certainly we can condemn them for their state subsidies, but we must also recognize the reality of today's market. If they have the opportunity to take government monies which can benefit their endeavors, they have an obligation to their shareholders, employees, and selves to maximize that. If there is a meme about green energy, their marketing department has an obligation to exploit that. Anything less would be an invitation for failure. This is the nature of business. You must do all that you can to sell and make profits, else another entity preempts your efforts.

I accept the argument that they should not take subsidies, or that they should not play into a larger green energy agenda. But we must also accept that perhaps they do not share the same worldview, and therefore the objective truth which you base your moral condemnations is not a common one.

Reply from The Daily Bell

"The objective truth which you base your moral condemnations is not a common one."

It is true we think an "objective view" concludes that Western elites are implenting a kind of slow motion genocide. If that's a "moral condemnation," so be it ...

  Posted by gwarner on 12/28/12 07:58 PM

I own a Tesla Roadster and love the car. I would also like to add that I am hardly one of the elite; just an engineer entrepreneur who was somewhat lucky in business and blew some profit on one luxury.
It is silent, costs almost nothing to run (except tires), all with Leer jet acceleration. I find myself chuckling whenever driving it.
But it won't charge when it's hot from the highway, charging takes a few hours, and its 245 mile range is vexing as are the dearth of charge stations. It is truly ironic that with an electric energy grid so much better than the gasoline distribution system, there are so few places to re-charge.

Those negatives can be solved and in the meantime I make do with the system the way it is. However, the most worrying might be future control of the individuals mobility by electric transport through various means. Is there an RFID chip buried in the thing, for example? All due respect for Elon Musk, but who can one trust? It would be nice to have some reassurance from Tesla.

  Posted by Edgar Friendly on 12/28/12 07:39 PM

SEE: human event; Brick club, first rule about brick club is you don't talk about brick club... can't remember author's name, john something, but recall his image. Wears glasses, frequent human events write, anyways, wrote article about how if you let tesla roadster battery discharge; it becomes totally inert, car won't move, battery is junk, oh, BTW, those batteries are proven toxins to the environment, too. Yup. All those Toyota Prius batteries, too. Tax the libtards that bought 'em for the proper disposal, I say. A 'deposit' for battery disposal! :) Hey, I should be president, I'm so green.

  Posted by Edgar Friendly on 12/28/12 07:39 PM

SEE: human event; Brick club, first rule about brick club is you don't talk about brick club... can't remember author's name, john something, but recall his image. Wears glasses, frequent human events write, anyways, wrote article about how if you let tesla roadster battery discharge; it becomes totally inert, car won't move, battery is junk, oh, BTW, those batteries are proven toxins to the environment, too. Yup. All those Toyota Prius batteries, too. Tax the libtards that bought 'em for the proper disposal, I say. A 'deposit' for battery disposal! :) Hey, I should be president, I'm so green.

  Posted by Agent Pete 8 on 12/28/12 05:25 PM

Were it really truly Telsa technology turingly tested and treatied, it would have antigravity, cloaking, autopilot and de-sucking fentralised economics like in the Aircars.

Freely downloaded and 3D printed of course.

  Posted by rmp on 12/28/12 03:58 PM

I hate to be contrarian here but I dig the idea of an electric car, and I like the Tesla, especially the new sedan which is beautiful. It looks very similar to a Maserati sedan, and although the range isn't great, it's not that bad either. And, from what I understand the re-charging time isn't bad either, around an hour. As an investment in something interestsing, one could participate in a technology that could be an alternative. Besides, why not have lunch while a re -charge took place providing the restaurant had facilities? So relax and think about it. As for up keep they'll come to you. How cool is that! Besides, the idea of not buying gas IS an issue that makes sense. Talk about individual secession! Perswonally, I don't care about greenhouse gases, I know the dirll, (no pun) but I do like innovation. And this car has it. So, I'll ask this question for all you suspicious meme freaks; and don't get me wrong, Uncle Sam should be the last gouup to support this company,same with elite dominate social themed ones at work in whatever capacity, the balance sheet proves that it's not ready for prime time, or general consumption but so what. Even if this is about pumping and dumping, skimming, whatever, the idea is cool enough for me. Besides, does everything have to be totally practical with you guys? Maybe it's time to have a little fun so lighten up.

Reply from The Daily Bell

You like the idea that the government has forcibly extracted your tax dollars and turned them over to Tesla? Why? Because Telsa is deserving and others are not? Because Tesla makes a "cool" if impractical car? Because the world is rapidly running out of oil and gas? Why? ...

  Posted by debris54 on 12/28/12 03:54 PM

here's some more a them thar COMMIES tryin' t' TAKE AWAY YER RAHHTS, BOY! next thing ya know, they'll be COMIN' FER YER MUSCLES CARS!! Click to view link

  Posted by debris54 on 12/28/12 03:28 PM

I really have no idea as to the veracity of global warming, or the claims of it's cause. The topic does, however, point to a REAL common 'dominant social habit' (or whatever you want to call it)... strong opinion of the uneducated. The predominance of such is far more concerning than this article, the value of which is mostly in it worth as an example of the forementioned. (yikes! that was a clunky sentence... ha hah... ) Perhaps if you spread your 'mentor love' beyond the ramblings of your hero Tibor... ?? no? ... anyway, while I rarely read your posts beyond the title, I do applaud the fact that a good looking, reasonably intelligent young chap such as yourself is spending time doing something other than watching sports on TV and boinking barflies... but really... get beyond ol' Tibor... he really is a very self-absorbed wanker, to be blunt. Believe me, I know. It takes one to know one.

  Posted by DockyWocky on 12/28/12 02:43 PM

Who invested in Tesla Motors? If someone did, I cannot believe that the missed the main, blaring signal of a U.S. Federal Government (Obama) loan to get them going to begin with.
Those loans were strictly kick-back arrangements between Obama and the Tesla executives whereby a heck of a lot of that loan money was shuffled back into the campaign cofferts of one Barack Hussein Mohammed Obama.

  Posted by dkmeller1 on 12/28/12 02:41 PM

We are still (in all likelihood) a generation or so away from a viable, profitable, and reliable technology for totally electric motor vehicle, Additionally, it seems that hydrocarbon fuels (even when adjusted for inflation) are becoming somewhat less polluting and are trending downward in price, makes the utility of something like the Tesla roadster problematic at best.

Large scale storage of electricity may be more useful and profitable, given the unreliabilty of the power grid of most cities and States, for large household and industrial appliances rather than buses, SUVs, automobiles and so on.

The fact that total electric vehicles are being promoted by "greens", with their pseudoscience global warming nonsense is certainly NOT a recommendation for investment or current profitability!

PEACE AND FREEDOM!!

  Posted by IndyLyn on 12/28/12 02:34 PM

I think the Tesla car(s) are just perfect... for the elite. Costing a minimum of $49,000 (plus down payment, licensures, taxes, and maintenance of the car itself not to mention the electricity charging costs)! Definitely not an auto plan for the general middle class American. And it really ticks me off knowing the governments will bail them out using our money... just like the GM fiasco!

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