Quote:
Originally Posted by verticaldoug
As much as I think Tesla the stock is overvalued, the chances of this are pretty slim. The company is largely debt free outside of a 5 billion dollar revolver they have for cash management. Tesla's issue is discipline. If you look at CAPEX growth, it all appears to be going to GPUs for his AI infatuation right now. Elon's comment on the earnings call about how many GPUs they plan to buy by year end is what really stood out to me. I suppose Elon's ego and need to excitement may enable him to drive this into the ground, but the company is profitable and it just needs discipline which Elon lacks. SpaceX will also face this inflection point in a few years. (although I think they are there now, but what do I know)
|
It's worth saying that it is easier to be debt-free when you receive critical government subsidies as Tesla did or get critical government contracts as SpaceX did. Elon is a master at finding areas of business where the government is willing to throw in the form of electric car subsidies (and now the desire to share the Tesla charging network) or "public-private partnerships", as NASA was to solve their need for reliable next-gen orbital transport. Meanwhile, Elon has built Starlink, and will be able to sell SpaceX services to private concerns.
As former minion working for a Federal contractor in DC, my worm's eye view is that you have to work very hard to screw up the sluice of money that can flow from government agencies, so long as you don't engage in outright fraud.
This is an article from when Elon was slagging off about NPR as "government" media--but there are numerous older articles detailing exactly how much he has relied on government funding, direct and indirect:
https://qz.com/elon-musks-spacex-and...mon-1850332884