Tesla's Future As a Private Company

in #technology6 years ago (edited)

Established back in 2003 by Martin Eberhard and Marc Tarpenning, Tesla dreamed of becoming a "story stock". Fast forward 15 years later and they moved from having a single prototype, to a company able to produce product superior to the competition's made in Detroit. Since inception Tesla earned a reputation as a highly visible brand utilizing tools like social media. Quite a shift from the mainstream path traditionally taken. Replicating this feat continues to prove difficult for startup competitors like Lit Motors or Elio Motors.

tesla-press-semi-release.jpg
Source:Tesla

Tesla chose this alternative path that continues to innovative building massive factories that are the first it's kind called Gigafactories. No other option existed for Tesla that would also be able to produce such large amounts of lithium batteries the electric vehicles need to run. Sitting now as the largest consumer of batteries in the world, Tesla continuously excels in finding new creative ways to cut costs with production of battery packs.

Even with so much progress Tesla ran into some turbulent times. The past few months investors had to stomach large swings in the price of Tesla Stock. Elon Musk spoke on twitter stating, "Am considering taking Tesla private at $420. Funding secured". Making it clear Musk is working on plans to be able to take the company private sometime in the future.

Musk made this move at an interesting time stepping back and looking at the overall market. Global debt is rocketing up towards new astronomical levels. This is making some investors nervous as they believe debt rising follows a pattern that's lead to bear market corrections in the past. Another reason for some investor concern would be the housing market bloating into levels well past the numbers from 2007's correction. Elon Musk has also spoke in an interview about the last financial market correction where he speaks about the crisis in 2007.

Going private insulates Tesla from the copious amounts of market manipulation done by those going against or shorting the stock. Tesla commonly gets called the most shorted stock in history. The same Investors shorting likely tried Tesla's product or own the product them self but simply want to speculate for potential profit. Long term investors largely have seen the potential for the cars in the future making available a large amount of private silicon valley capital if Elon Musk or others want to liquidate shares on a rainy day.

I'm under the impression Tesla taking this direction could have an upside for them as a business and a brand. Keeping the best of both worlds by retaining investors while at the same time insulating them self from turbulent stock markets.

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I hope they can work out any bugs that come their way, atleast until I can afford :) Nice read, well written.....well thought out of course, You're Gray.

Well, I remember crash that happened in 2007 and it is his ability to lead that could raise back Tesla and his other projects; SpaceX is a notable achievement. Most of his projects are futuristic and Tesla is being one of them. I happened to talk to one of the head of some Oil refinery in India and he told me about his fear of loosing job after 2030. This dude is right on his track as he has created a panic in automobile companies, oil refineries and I think this panic is a good sign for sustainable development.

And it would be very interesting to see how investors are going to react once it goes private. I think Market is going to love 'em

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I am so curious where all of these developments will lead to.

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