There is an article today in Bloomberg on how he is financing issues within his companies.
He owns large chunks of three: Tesla, Solar City and SpaceX. The latter has won government contracts. It appears he has SolarCity issuing "solar bonds" that SpaceX has been acquiring. Therefore, transferring hundreds of millions helping finance their operations. SpaceX has been buying about 70% of issuance. He has also used Tesla stock and SolarCity stock as collateral for personal loans.
This type of financing is not only highly risky for the margin calls -there has been already a congressman trying issue some law to stop the "solar bonds" arguing he is milking the government coffers- but also speaks of his character. I may say, shady character. You don't borrow from Peter to pay Paul having Joan as collateral if the businesses you are running have a shot at making it.
Unfortunately, this gives Musk and therefore SolarCity some edge. But the day will come that market forces will instill some discipline too. Just like they did with Valeant.
The fed will rush to raise on second half once it becomes clear the economy is more than strong. More likely, by October data will come in to reflect this. Short gold, don't get stuck with commodities. Neither oil. Go long USD on dips and go long small caps russell 2000. SPX will stall by year end.
This john beans is a consumate troller and goes about the business of ruining enphase shareholder's day. Don't pay attention. He is not simply presenting an opposing view. He is a nasty character.
Since low of 1.63 on mid Nov. all reactions ended up in higher lows, consistently. Last one at 2.23. This is going much higher.
There is something to that. But the rest is built upon air: heavy subsidies.
Tesla Co. is far from a success with 50k cars a year. The promise of 180k/y with T3 today is just that. Built on a cheap downpayments and a 2 year blank check. What happens with M Benz and BMW when they too come aggressively in the market? SpaceX had some quite stunning failures and... oh well.. then, there is that battery storage unit.
Toyota, the largest car manufacturer in the planet, is betting on hydrogen. Not electric vehicles. EM is a dreamer with a 13 bill and some venture backing. Most of his appeal as an entrepreneur comes from the old paypal days.
Don't get me wrong. I wish I had that type of success and all his 13 bill. But some of his present ventures are questionable. Time will tell if gets the scale he needs or not. My bet is he doesn't.
As stated in yesterday's NPR segment on EV, most Teslas are in California. And they are there because of tax breaks but specially because of the waiver for one passenger driving in HOV lanes in California highways. Something that may go away in the near/mid term. And something that is specific to California.
Without those special breaks EV sales (and Teslas in particular) would surely plummet. Big car companies are in the game just because they like to build cars and an EV is just one more, albeit tiny, segment. A lot of hype around EV.
Consider that when you think about the giga-factory. There is a good chance things will not work out as he envisions. And what will he do with his vast economies of scale if there won't there be a demand for the batteries?
This Elon M is a joke asking for $1000 in advance for the T3 when delivery is not even certain by end of 2017. Knowing of his delays, the downpayments will earn a nice financial return for 2+ years on his bank account. By the time T3 comes out we may live in a completely different electric world. What a joke. Add to the joke the powerwall too.
Then, you broadly agree with me.
And in some regards with enphase. Who is pursuing a less threatening battery scheme to utilities.
Maybe there is more in enph's approach than meets the eye.
A battery that provides back up is well on its way to replace power from the grid, at some point and theoretically, permanently. This means bye bye to the utility company. Although it is not a present danger, it is probably being considered in some small, powerful circles as something terribly disruptive. In fact, I believe Warren Buffett's latest shareholder's letter mentions something to this regard.
Enph has demonstrated they want to work with utilities' operators. More importantly, they have extended a friendly hand-shake to them, as in "partners".
Perhaps enph's long term bet is that only survivors will be those who develop a healthy relationship with incumbents so as to prevent a fierce backlash as seen in Nevada with net-metering.
In this regard, going for a battery solution that does not upset the cart may work to their benefit.
If they are so sure there are new sign ups, old customers coming back and a general sense that sales are growing due to margin compression and if they are so sure storage will add incrementally to sales, why don't they just come out with a revised estimate of sales?
This WILL cause the price per share to move. Right now, their informational pr's look more like stunts that the market deems not credible.
I have always considered their high RD a waste.
However, in a recent interview, Bill Gates stated that energy storage and batteries are a critical development and he said a breakthrough is required within 2 years for which he was planning on forming a new venture with other tech giants to pursue such breakthrough. He said from all developments this is close at hand.
So it may not be a bad idea for enph to continue to spend money this way.
We may get a pop. But not a runaway breakthrough.
Only when they show earnings/sale acceleration -even the 1Q happening- you will see a wild ride.