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  #221  
Old Posted Aug 19, 2018, 6:54 PM
Sun Belt Sun Belt is offline
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We're almost coming full circle.

Transit systems that used to be privately run, for profit, offering extensive coverage for a low fare. Then these services were replaced by publicly funded government agencies that reduced service, let infrastructure crumble, are massively inefficient with ginormous budgets and now we're back towards private companies [Uber, Lyft, Bird, Boring Company and more] coming up with transportation solutions that these regional transportation systems could never do.
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  #222  
Old Posted Aug 19, 2018, 9:46 PM
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SIGSEGV SIGSEGV is offline
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Originally Posted by Sun Belt View Post
We're almost coming full circle.

Transit systems that used to be privately run, for profit, offering extensive coverage for a low fare. Then these services were replaced by publicly funded government agencies that reduced service, let infrastructure crumble, are massively inefficient with ginormous budgets and now we're back towards private companies [Uber, Lyft, Bird, Boring Company and more] coming up with transportation solutions that these regional transportation systems could never do.
The profit part is the killer here. We'll see what happens when VC's stop burning their money on these things.
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  #223  
Old Posted Aug 19, 2018, 9:53 PM
BrownTown BrownTown is offline
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Originally Posted by SIGSEGV View Post
The profit part is the killer here. We'll see what happens when VC's stop burning their money on these things.
Exactly. Boring Company isn't even areal think so I'll leave that alone for now, but Lyft and Uber only keep prices relatively low by losing other people's money and skirting labor laws. They're terrible (and unsustainable) examples of how to better run transportation.
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  #224  
Old Posted Aug 19, 2018, 11:33 PM
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That may be true, but he's still not going to jail. Worst case scenario is some sort of fine that's insignificant in relation to his net worth.

And it's most likely nothing happens. Elon Musk is pretty much teflon. He rivals only Donald Trump in terms of constantly saying absolute BS and still having an army of rabid fans willing to proclaim him the best thing since sliced bread.
You are probably right that any fine won't itself hurt him much but this article explains Tesla's problems. And if he were to lose Tesla, I'm pretty sure it would be a major psychological blow that might change his willingness to propose grand schemes like the subject of this thread:

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The Game Has Changed at Tesla
By Charley Grant
Aug. 17, 2018 12:04 p.m. ET

Tesla’s investors, captivated by the electric car maker’s future growth prospects, have ignored its rickety finances. That is no longer possible.

Tesla is in trouble after a chaotic week. Elon Musk’s supposed plan to take the company private at $420 a share looks more like a fantasy. The Securities and Exchange Commission is investigating the company on multiple fronts, including issues related to disclosure about production of the Model 3 sedan. Shares dove 8% Friday morning.

The SEC investigation is a threat to investors, albeit not in the way one might expect. Whatever fine might come if Tesla was found to violate regulations would have minimal impact. The most important impact is Tesla may struggle to raise the cash it badly needs while the investigation is going on. Few investors will buy new shares in a company under investigation. Those who would will likely demand tough terms, which would come at the expense of current investors . . . .
https://www.wsj.com/articles/the-gam...s&page=1&pos=2

Could he go to jail? Not likely based on what he has done so far. But very rich people have been known to, often times after losing most of their wealth when their principle businesses went down. We know Musk has a high net worth in the stock of Tesla, SpaceX and so on but those companies don't actually make any money and Musk clearly doesn't want to raise cash through public share offerings that might dilute his holdings and, as a result, his control.
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  #225  
Old Posted Aug 19, 2018, 11:42 PM
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Originally Posted by BrownTown View Post
Exactly. Boring Company isn't even areal think so I'll leave that alone for now, but Lyft and Uber only keep prices relatively low by losing other people's money and skirting labor laws. They're terrible (and unsustainable) examples of how to better run transportation.
I really feel bad about injecting a few facts into your myth-making but:

Quote:
While Uber isn’t required to disclose its financial results, Uber has done so for the past few quarters as it gears up to go public next year. In Q2 2018, Uber’s net revenue was up 8 percent quarter-over-quarter, at $2.7 billion. Year-over-year, that’s a 51 percent increase.

Uber recorded gross bookings — the total taken for all of Uber’s transportation services — of $12 billion, a six percent quarter-over-quarter increase and a 41 percent year-over-year increase.
But while Uber’s gross bookings increased, so did its losses. In Q2, Uber had adjusted EBITDA losses of $404 million compared to $304 million in losses in Q1.

Uber’s losses added up, given its investments in Eats, India, the Middle East, bikes and scooters. This quarter, Uber expanded Eats into a number of new cities in Europe, the Middle East and Africa, acquired food delivery startup Ando, announced its expansion of JUMP bikes into Europe and made its scooter ambitions official.

Other key stats for Uber’s Q2 2018:

Adjusted EBITDA margin: 3.4 percent of gross bookings (in Q2 ’17, that was 6.3 percent)
Gross cash: $7.3 billion (+1 billion quarter-over-quarter)
“We had another great quarter, continuing to grow at an impressive rate for a business of our scale,” Uber CEO Dara Khosrowshahi said in a statement. “Going forward, we’re deliberately investing in the future of our platform: big bets like Uber Eats; congestion and environmentally friendly modes of transport like Express Pool, e-bikes and scooters; emerging businesses like Freight; and high-potential markets in the Middle East and India where we are cementing our leadership position.”
https://techcrunch.com/2018/08/15/ub...rcent-from-q1/

Uber has positive margins so it has positive cash flow. EBITDA (earnings before interest, taxes and depreciation, adjusted) is negative because of the investments in new businesses. But revenue is rising rapidly and they have about 4 times the cash on hand that Tesla does.

While Elon Musk has repeatedly promised profitability at Tesla, he hasn't achieved it and the company is still essentially a niche maker of luxury cars. They have been unable to make and sell their new model at the $35,000 price point they originally announced because if they did they'd lose money on every car sold.
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  #226  
Old Posted Aug 19, 2018, 11:44 PM
BrownTown BrownTown is offline
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Originally Posted by Pedestrian View Post
Could he go to jail? Not likely based on what he has done so far. But very rich people have been known to, often times after losing most of their wealth when their principle businesses went down. We know Musk has a high net worth in the stock of Tesla, SpaceX and so on but those companies don't actually make any money and Musk clearly doesn't want to raise cash through public share offerings that might dilute his holdings and, as a result, his control.
Trust me, I am fully aware of his issues. I even put my money where my mouth is by buying put options against the stock after it went up 10% based on Musk's fraudulent tweet. I was merely pointing out that even though it was blatantly illegal it's more of a PR issue than a legal one because in the US white collar criminals like Musk virtually never get taken to account. His biggest "risk" is having a mental breakdown at this point or suffering a heart attack from the stress or drug overdose.
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  #227  
Old Posted Aug 20, 2018, 1:06 AM
Will O' Wisp Will O' Wisp is offline
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Trust me, I am fully aware of his issues. I even put my money where my mouth is by buying put options against the stock after it went up 10% based on Musk's fraudulent tweet. I was merely pointing out that even though it was blatantly illegal it's more of a PR issue than a legal one because in the US white collar criminals like Musk virtually never get taken to account. His biggest "risk" is having a mental breakdown at this point or suffering a heart attack from the stress or drug overdose.
Musk has exposed himself to an extremely significant risk though, not of criminal prosecution but of literally being forced to choose between losing his company or going bankrupt. Given Tesla's current burn rate, unless something radically changes Musk is going to need a liquidity injection by early next year to stay afloat. Even if he doesn't go to jail, even if he isn't prosecuted, does Musk still strike you as a man banks are going to lend billions upon billions of dollars to without any sort of preconditions?

Ironically, this is exactly what what drove Musk's so often compared predecessor Howard Hughes into exile. In the late 50s he was unable scrap up enough cash internally to finance a fleet of new jet aircraft in order to keep of with his competitors, and the banks demanded constraints be placed his unstable leadership as a precondition to issuing loans. The loss of his independence broke Hughes, he locked himself up in a hotel room in Vegas and never came out.
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  #228  
Old Posted Aug 20, 2018, 1:54 AM
BrownTown BrownTown is offline
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Originally Posted by Will O' Wisp View Post
Musk has exposed himself to an extremely significant risk though, not of criminal prosecution but of literally being forced to choose between losing his company or going bankrupt. Given Tesla's current burn rate, unless something radically changes Musk is going to need a liquidity injection by early next year to stay afloat. Even if he doesn't go to jail, even if he isn't prosecuted, does Musk still strike you as a man banks are going to lend billions upon billions of dollars to without any sort of preconditions?
Personally I wouldn't lend my money to Tesla no matter who the CEO was.
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  #229  
Old Posted Aug 20, 2018, 2:25 AM
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His biggest "risk" is having a mental breakdown at this point or suffering a heart attack from the stress or drug overdose.
Or being confronted by a rebellious board finally aware of its own legal jeopardy.
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  #230  
Old Posted Aug 20, 2018, 2:50 AM
BrownTown BrownTown is offline
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Or being confronted by a rebellious board finally aware of its own legal jeopardy.
Doesn't really work when half the board is people Musk himself put there due to their loyalty to him including his own brother.
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  #231  
Old Posted Aug 20, 2018, 4:29 PM
jmecklenborg jmecklenborg is offline
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Originally Posted by Sun Belt View Post
We're almost coming full circle.

Transit systems that used to be privately run, for profit, offering extensive coverage for a low fare. Then these services were replaced by publicly funded government agencies that reduced service, let infrastructure crumble, are massively inefficient with ginormous budgets and now we're back towards private companies [Uber, Lyft, Bird, Boring Company and more] coming up with transportation solutions that these regional transportation systems could never do.

For-profit transit companies were profitable when they enjoyed monopolies and when the U.S. cities were more densely populated.
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  #232  
Old Posted Aug 20, 2018, 5:33 PM
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In a turnabout, Saudis could be investing $1 billion in Tesla rival Lucid Motors
By Luke Stangel – Contributing writer
3 hours ago

Saudi Arabia’s deep-pocketed sovereign wealth fund is in talks to invest more than $1 billion in Newark-based Tesla Inc. rival Lucid Motors, Reuters reports, citing unnamed sources.

The Public Investment Fund of Saudi Arabia (PIF) and Lucid Motors have drawn up a term sheet that details an initial $500 million investment, followed by two additional tranches of funding if Lucid hits specific production milestones . . . .

PIF’s reported interest in Lucid Motors could spell trouble for Tesla CEO Elon Musk, who has publicly pinned his hopes of taking his company private on a multibillion-dollar investment from the Saudis.
https://www.bizjournals.com/#
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  #233  
Old Posted Aug 20, 2018, 5:34 PM
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Originally Posted by BrownTown View Post
Doesn't really work when half the board is people Musk himself put there due to their loyalty to him including his own brother.
At some point, people begin to realize they have to look out for themselves. Ask Paul Manafort or Michael Cohen, just as 2 examples.
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  #234  
Old Posted Aug 20, 2018, 5:41 PM
BrownTown BrownTown is offline
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At some point, people begin to realize they have to look out for themselves. Ask Paul Manafort or Michael Cohen, just as 2 examples.
Of your 2 examples only one really applies. Paul Manafort didn't cop a plea, he went to trial. And right now it's looking like the jury is hung so he might end up the smartest guy in the room if he skates on all these charges while all the other rubes pled guilty.
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  #235  
Old Posted Aug 22, 2018, 11:07 PM
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For-profit transit companies were profitable when they enjoyed monopolies and when the U.S. cities were more densely populated.
They weren't that profitable either. They operated as public utilities, so the transit fares were regulated by city or state government. The transit fare was 5 cents for many years - this was profitable at first, but eventually inflation caught up to it. In the face of that inflation, politicians refused to allow a fare increase, so transit operators responded by slashing maintenance budgets. Eventually this lead to a death spiral of unreliable service and crumbling infrastructure, right as Detroit was gearing up to put a car in every household and the Feds were gearing up to string interstates across America.

At least with fully public transit agencies, politicians have to answer to the voters for both fare prices AND quality of service.

Fully private transit companies are insulated from political bullshit and can focus more on operations, but they might set fares that are out of reach for some members of the community.
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  #236  
Old Posted Aug 22, 2018, 11:57 PM
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Originally Posted by BrownTown View Post
Of your 2 examples only one really applies. Paul Manafort didn't cop a plea, he went to trial. And right now it's looking like the jury is hung so he might end up the smartest guy in the room if he skates on all these charges while all the other rubes pled guilty.
I don't want to get this thread closed by talking politics here so I won't. But the Tesla Board is not immune to be held to account for their own fiduciary duties and they know it, or should. It's a lesson the Theranos board is now learning.

Quote:
Establishing what the board knew and when is key to the SEC’s probe. For instance, if Mr. Musk didn’t show the board a relatively firm deal with potential investors, it could indicate that the conversations weren’t as far along as he suggested when he tweeted that he had “funding secured” for a deal.
https://www.wsj.com/articles/sec-pre...s&page=1&pos=6

But if he did tell them the complete details of what now appears to be very tentative negotiations for deal funding and they failed to clarify for stockholders after Musk's disastrous tweet, they could have their own hot water to boil in.

Meanwhile, things are getting really sticky at Tesla:

Quote:
Some Tesla Suppliers Fret About Getting Paid
By Tim Higgins, Marc Vartabedian and Christina Rogers
Updated Aug. 20, 2018 4:48 p.m. ET

Tesla Inc.’s tumultuous year has fueled concern among some of its suppliers about the auto maker’s financial strength after production of the Model 3 car drained some of its cash, according to industry executives and documents.

A recent survey sent privately by a well-regarded automotive supplier association to top executives found that 18 of 22 respondents believe that Tesla is now a financial risk to their companies, according to the document reviewed by The Wall Street Journal . . . .

Delays this year in the production of the Model 3 car drained Tesla’s cash, which fell by $1.13 billion in the first six months of the year to $2.24 billion . . . .

Tesla’s cash and cash equivalents fell to $1.69 billion as of Aug. 12, according to the records. That was largely because it repaid $500 million of a revolving credit line in July. Tesla plans to tap that same amount again later this quarter, according to the records. That, plus additional cash flow that Tesla anticipates from an increase in vehicle deliveries in the second half of the quarter, is expected to leave it with several hundred million dollars more in cash at the end of September compared with three months earlier, according to the records.

To conserve cash, Tesla has asked some of its capital-equipment suppliers in recent weeks for cash back ranging from 9% to 20% of what the company paid dating back to 2016, according to people familiar with the requests. In one email to a supplier reviewed by the Journal, Tesla asked for help to make “an immediate impact” by providing a rebate on products already purchased . . . .

One parts supplier was asked by Tesla for a 10% reduction on costs across the board going forward, a person familiar with the matter said in an interview. This person said the request was extreme, saying other auto makers typically seek savings of 1% to 2% on individual parts or programs.

The supplier said Tesla indicated it would ask to extend the payment terms to 120 days from 60 days if it didn’t get the price reduction, a length rarer among auto makers than a 90-day term.

Eleven of 23 responding suppliers in the survey said Tesla had asked them to extend payment terms . . . .

Public records show 16 companies since October have taken the unusual step of filing mechanic’s liens—or legal claims seeking unpaid compensation—against Tesla claiming bills haven’t been paid for supplies and services. Previously, only four liens had been filed against Tesla in all of 2015 and 2016 combined . . . .
https://www.wsj.com/articles/some-te...s&page=1&pos=2

A few months ago Tesla might have solved its cash problems with a secondary stock offering or by selling bonds but both those options could be problematic with an active SEC investigation.
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  #237  
Old Posted Aug 23, 2018, 2:17 AM
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Elon Musk is an egomaniac who has proven himself more than willing to bend the truth in order to promote both his interests and sense of self importance.


Despite these personal short-comings, the world needs a lot more Elon Musks. Some of his ideas are fanciful, some irrational, some financially unsustainable but all are visionary. Tried, tested, and true transportation dogma will not produce the transportation options that this planet is in dire need of. We need dreamers and people willing to break out of our transportation paradigms and Musk is such a man. Whether his plans come to fruition or not is not the point. The point is that we need to encourage people, government, and businesses to explore radical transportation option and Musk is such a man.
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  #238  
Old Posted Aug 23, 2018, 3:18 AM
BrownTown BrownTown is offline
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Elon Musk is an egomaniac who has proven himself more than willing to bend the truth in order to promote both his interests and sense of self importance.


Despite these personal short-comings, the world needs a lot more Elon Musks. Some of his ideas are fanciful, some irrational, some financially unsustainable but all are visionary. Tried, tested, and true transportation dogma will not produce the transportation options that this planet is in dire need of. We need dreamers and people willing to break out of our transportation paradigms and Musk is such a man. Whether his plans come to fruition or not is not the point. The point is that we need to encourage people, government, and businesses to explore radical transportation option and Musk is such a man.
The LAST thing the world needs is more Elon Musk's. Everybody dreams big, what sets people apart is the ability to actually execute. Don't think there is no cost to Elon's whimsical failures; many billions of dollars have been spent by Tesla and the opportunity costs for such large amounts of money are enormous. How willing do you think people will be to invest more in infrastructure after losing tens of billions in this failed venture?
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  #239  
Old Posted Aug 23, 2018, 3:47 AM
jmecklenborg jmecklenborg is offline
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They weren't that profitable either. They operated as public utilities, so the transit fares were regulated by city or state government.
It hasn't been published anywhere that I suspect Musk was and still is seeking to built his own expressway tunnels under LA and other big cities that only his cars are allowed to use. So the promise of a traffic-free drive from the San Fernando Valley to Westwood/Hollywood/DTLA, etc., would incentivize people to buy Teslas in large numbers.

The way they aim to save money is by building very small-diameter tunnels and putting the cars on a "skate". Great in theory but they aren't considering how scary riding at 60mph with tunnel walls just outside the window will be. In the unlikely event that one of these tunnels is actually built, we'll see quite a number of people ride it once and then swear it off.
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  #240  
Old Posted Aug 23, 2018, 4:52 AM
canucklehead2 canucklehead2 is offline
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Originally Posted by jmecklenborg View Post
It hasn't been published anywhere that I suspect Musk was and still is seeking to built his own expressway tunnels under LA and other big cities that only his cars are allowed to use. So the promise of a traffic-free drive from the San Fernando Valley to Westwood/Hollywood/DTLA, etc., would incentivize people to buy Teslas in large numbers.

The way they aim to save money is by building very small-diameter tunnels and putting the cars on a "skate". Great in theory but they aren't considering how scary riding at 60mph with tunnel walls just outside the window will be. In the unlikely event that one of these tunnels is actually built, we'll see quite a number of people ride it once and then swear it off.
I'll take my chances on a skateboard in a tunnel compared to Donnie Dimwit's and Dismal Dora's texting their ways into early graves behind the wheel now, thanks...
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