The SEC filing provides the first clear look at the company’s finances. It notes that Tesla has lost "approximately $236.4 million from our inception through Sept. 30, 2009"
From what I understand their inception is 2001, which means they've lost about $30mil/year. That doesn't sound excessive to me at all. Software startups normally count $15k/employee/month as a reasonable expense (including hardware, rent, benefits, etc.) Given how massive the equipment and production expenses for an auto company can be, I wouldn't be surprised if their number is three times as high. At only 500 employees (again, a very small estimate for an auto company) that would put their expenses at 45k/month * 12 * 500 = $270mil/year. Considering that they've lost only $240 mil in eight years, they're doing extremely well.
I can't even imagine the amount of effort and capital required to pull something like this off. If anything, I'm surprised how well they're actually doing so far.
I'm sorry, but losing $30M in one year is bad. Losing $30M for 8 years is excessively bad. Tesla is bleeding cash left and right and its CEO is flying jets to get around while taking in $450M in taxpayer money for loans, and then files for an IPO a week later.
Musk (its CEO) had mentioned that Tesla would be profitable in 2009, and that's clearly not the case. Stating that losing $240 million in 8 years is doing "extremely well" is irresponsible to impressionable investors looking forward to Tesla's IPO.
Well, there's different ways to calculate those numbers. If I had to guess, Tesla was referring to EBITA and the WSJ is calling them unprofitable after interest and taxes.
At any rate, it's ridiculous to try and claim that they don't have a business model. If they're selling the cars for more money than the incremental unit cost, then they do indeed have a profitable business model.
They may not be selling enough of them yet to have a profitable company but claiming that they don't have a business model is just being obtuse.
Are you claiming that in 2001, Amazon had no business model? Because that would be the same thing.
First off - Tesla is profitable or approaching profitability as of this year, per my link earlier. I figured maybe you didn't see that since you didn't address it.
Second, the money that they get from the government is a loan, just like the government, particularly the Dept of Energy, gives to thousands of companies who's research/products have a chance of generating extremely positive externalities for the country. (Last I knew, the whole dependent on foreign oil thing is sort of a big deal)
So what are you against here? What differentiates Tesla from the rest of those companies? If a company had a promising approach towards cold fusion, would you be against a government loan to them as well?
Your statement about VCs needs a citation. Maybe they think the IPO will raise more money for less equity. Maybe they want to do the IPO for other reasons.
Given that they just got a big loan, I doubt they're down to their last 9 million. Unless they spent it all in a week.
If you read the articles about them, they want to introduce another car model which will be a much higher volume business, involving a lot of capital expenditure up front to create the plant. That's a good reason to go IPO rather than another venture round. Higher dollars.
And if you don't buy it? Fine, don't buy the stock. But what's your ax to grind here? Every capital intensive business, including a lot of valley darlings, went through a long money-losing period at the beginning while they ramped up design and production. This is standard. Why the long face?
Could you cite your sources please.