
Apple tried to buy Tesla for more than it’s currently worth in 2013, report says - doener
https://electrek.co/2019/05/21/apple-buy-tesla-2013-report/
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rockinghigh
The comparison is misleading because Tesla had 120M shares outstanding in 2013
versus 170M shares today. $240 per share at the time is equivalent to $169 per
share today or $28B in market capitalization. It’s still 15% cheaper than
today’s share price.

~~~
earthshot
You need to adjust for cash and debt to get the enterprise value. If you do
so, you’ll find that Tesla is worth about 50% less than it was.

~~~
Reason077
Enterprise value is not derived from market cap.

Rather, market capitalisation reflects investor’s assessment of the enterprise
value.

Whether rational or not, this already takes cash and debt positions into
account.

~~~
kgwgk
[https://en.m.wikipedia.org/wiki/Enterprise_value](https://en.m.wikipedia.org/wiki/Enterprise_value)

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Phillipharryt
This piece uses Ashlee Vance as a source. Having read and checked on facts in
his books, his factchecking is sketchy at best. It's a somewhat believable
rumour, but of course take it with a pinch of salt and consider that analysts
like making big calls as well (usually backed by "anonymous sources").

~~~
w8vY7ER
I have enjoyed his writing so far and haven't found reason to question his
fact checking yet. Can you offer any example for someone curious about the
sketchiness you mentioned?

~~~
Phillipharryt
Musk himself claims it's rife with errors

[https://twitter.com/elonmusk/status/895834554245709824?lang=...](https://twitter.com/elonmusk/status/895834554245709824?lang=en)

and I recall some of his figures about initial tesla production being
outrageous. Like body gaps of 40mm being deemed the target. Figures like that
made me wonder if anyone had proof-read it because a 4cm gap in a car is
enough to fit your hand through

~~~
w8vY7ER
Thanks, this was news to me. Appreciate the insight

e: in hindsight your comment about 40mm gaps, as an example, does some
particularly crazy and I'm surprised it didn't stand out to me.

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InTheArena
This has been openly talked about for a while. It makes all the sense in the
world - Apple wants to get into this space, and has the pieces that Tesla is
missing - supply chain optimization, good capitalization and strong marketing.
Tesla has what Apple is missing - vision, electronics, deep learning
experience.

I'm still amazed that this hasn't happened yet.

~~~
blantonl
That, and Netflix.

Apple truly would expand their footprint into the daily life of hundreds of
millions of people.

~~~
the_other
I already feel like I spend too much with Apple. If they bought Netflix, I'd
probably stop watching TV.

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rchiniquy
The validity of the comparison aside, if Apple had bought Tesla in 2013, I
feel pretty confident Tesla would be worth more now than it is.

~~~
throwayEngineer
What would they synergize? Apple is known for marketing, which is already
Elons speciality.

Tesla cars are first revision technology, which means almost starting from
scratch anyway.

Two companies that live on reputation instead of quality would tarnish both.

~~~
Traster
Apple is known for its operations. Tim Cooke was head of ops before he was
CEO, imagine Tesla produced the same cars as today, but when it wanted to ship
its inventory to Europe it didn't tank an entire quarter of sales because of
fuck ups? Or imagine if Tesla had a competent scale-up of manufacturing their
Model 3. Those are the things that Apple could help a lot with.

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brmgb
On the one hand, Apple has a lot of experience in domains where Tesla has been
less than great (supply chain, manufacturing) and software is slowly becoming
a key differentiator for the automobile industry so I can somewhat see where
synergies might exist.

On the other hand, automobile is quite far from Apple core business. I know
that there is not much growth remaining in Apple key markets but still if I
were a shareholder, I'm not sure I would be comfortable with Apple making such
a move.

I guess we are entering a new golden age for conglomerates.

~~~
djtriptych
Traditional autos are far from Apple's core business (whatever that is.
software? hardware? design?) but Tesla isn't.

It's supply chain + manufacturing + software + batteries + sensor tech + gps.
All things Apple has spent billions developing internally.

And how many Tesla owners also own an iPhone. I bet it's something like 80%_

~~~
brmgb
> Apple's core business (whatever that is. software? hardware? design?)

Selling laptops and phones mostly segueing into digital services.

> Tesla isn't.

Sadly, it very much is.

Tesla potential customers are not buying a Tesla in place of another batteries
+ sensor tech + gps. They are first and foremost buying a car.

~~~
zapzupnz
> Tesla potential customers are not buying a Tesla in place of another
> batteries + sensor tech + gps

I feel like this is a poor comparison. When companies attempt to make luxury
_experiences_ affordable to the masses (yes, still more expensive, but at
least within reach), the whole is greater than the sum of its parts.

Of course Tesla customers aren't going out buying cars instead of batteries.
But what drives people to want to purchase Teslas? They don't just want cars,
they want _luxury_ cars, they want _electric_ cars, they want sleek and modern
cars.

The question is how does one build a car, make it out of the best parts so
that the customer has the best experience, how does one build it inexpensively
but still safely, securely, and maintaining the luxury quality.

If any old car would do, they wouldn't get a Tesla, they'd get a Honda Civic.
That's not Tesla's target market.

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S_A_P
I think that the fact that either Alphabet or Apple could easily buy Tesla in
cash is a great reason not to short the stock.

~~~
foobiekr
Tesla has huge liabilities in terms of debt and (probably under-accouted-for)
warranties. Even if the stock dropped to $1, wouldn’t this be the biggest
Apple acquisition in company history? Tesla has 12+B in debt and other
liabilities and is losing nearly a billion a quarter. That’s four Beats and
another one per year.

~~~
mattnewton
What else are they going to do with their cash horde except make big
acquisitions? Strategically, I think this could make sense in the long term,
even if it loses for a very long time, just for the battery research team and
the foothold into the electric car business.

~~~
xkjkls
Why does having more cash make a business strategy better? Just because they
have cash to spend, doesn’t instantly mean there are synergies.

In fact, most corporations tend to spend cash for acquiring irresponsibily. At
the beginning of any MBA class discussing mergers and acquisitions, they’ll
cite the fact that the majority of these fail to produce the intended value.

------
erpellan
These days, I'd be suggesting Apple buy Jaguar.

Both brands have a reputation for design and customer satisfaction, and
customers with a certain insensitivity to price.

Jaguar are reinventing themselves as a BEV company with the i-Pace. (Other car
manufacturers like BMW and Audi are shoe-horning electric motors into their
existing platforms, not redesigning from scratch).

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mikekij
As a Tesla optimist, it seems like their biggest constraints are cash and the
distraction of quarterly earnings calls with analysts. Apple could use that
huge stockpile of cash to allow Tesla to continue playing the long game,
without having to worry about their stock price fluctuating every day.

~~~
tyre
And you would think Elon could still be given free reign, but I suspect he
would reject this out of hand because he wants to stay in absolute control.

We obviously don’t know everything behind this, but Tesla’s in perpetual
turmoil internally and externally. They’ve done incredible things and at the
same time put that in jeopardy. Elon has huge upside but can be his own worst
enemy at times (get the fuck off of twitter)

~~~
dangero
Apple can't buy Tesla and let Musk have free reign because it will expose them
to potential liabilities much larger than their investment in Tesla.

Example: -Stock manipulation would now be manipulation of Apple stock.
-Autopilot related deaths and quality issues now create lawsuits against
Apple's bank account and reputation.

~~~
xkjkls
Theoretically that depends on the deal. There are ways to have financial
ownership without assuming all the liabilities

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Analemma_
Until someone from Apple or Tesla confirms this, it should be treated as a
rumor and not taken at all seriously. Investment bank analysts are full of
shit, and the ones covering Apple doubly so. Remember Gene Munster and the
Apple TV set he said was totally, definitely coming any day now... for a
decade?

~~~
juskrey
* until someone from Apple or Tesla denies this

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objektif
This makes sense to me, think about all the car related electronic components
Apple can sell once cars start driving themselves. There are lots of
opportunities.

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rb808
This makes no sense. Apple makes computers. A car company is completely
different, even it if Tesla's have bigger screens than other cars. There is no
money in making cars, Apple is worth more than all the other car companies put
together.

~~~
skellington
No, this makes complete sense. Tesla is opening up a huge new market, but it
is under-capitalized. Also, Apple could give Tesla the design boost is
desperately needs in the long term (those interiors barf...).

Those darn Tesla speculators were driving TSLA into unpurchaseable levels
which in the long run may end up killing Tesla. Irony.

~~~
xkjkls
Why do we assume designing cars is the same as designing phones? Automotive
design has been around for 100s of years before phones.

And why is this market presumed to be entirely new? Many of the auto
manufacturing talents of old are still just as important in a new EV paradigm.
Cars might not need combustion engines, but it’s not like the don’t need wiper
blades, or seats, or paint, or branding, or a commitment to reliable
manufacturing.

------
fit2rule
This explains all that "iCar" nonsense. I mean, even as a seasoned and dyed
Apple fanboix, I can honestly tell you, I don't want Apple to make cars.

I want them to make computers.

~~~
ambicapter
Are you mad that they make phones?

~~~
TomMarius
They make pocket computers, actually

~~~
yarrel
And ear computers. They can make computers on wheels as well.

~~~
fit2rule
I still see Apple making very, very good computers - which integrate with cars
(made by others) - a much better scenario than Apple "re-inventing personal
transportation".

It is an iron fist wrapped in a velvet glove. Never forget how much control is
being lost by generations of people now, courtesy of the user-experience candy
hit ..

User owns their computer, and user owns their data: this is not so great, all
things considered, if we look at Apple and their compatriots from an angle.

There is still an effort to make open, honest computing platforms. At the
moment, immense numbers of eyeballs are focused on their pocket-glass mirror.
Honestly, there is something here which must be deconstructed, and it could
happen with a new OS/platform ideology where Apple making cars would be an
extremely poor future.

------
buryat
Saudis tried to buy Tesla for $420 in 2018

~~~
xkjkls
There is no evidence that this was ever true.

------
shmerl
Good thing Apple didn't swallow it.

------
magwa101
Tesla is fucked, maybe Toyota buys them?

~~~
bduerst
They already turned down VW.

------
sc90
Do electric bicycles pose a threat to Tesla (car companies in general)?

~~~
morkfromork
Pickup trucks are the top selling vehicles in the US. Hard to replace those
with bicycles.

~~~
ggg2
would be interesting to see how much of this is real need for a pickup.
there's a marlon brandon(?) movie where he buys the biggest ram truck, just to
drive up and down the street every day :)

likewise, one could say that california has a need for SUVs, while everyone
only drive them under 30mph in a perfectly paved roads under perfect dry
weather, alone 90% of the time, and with a single kid the other 10.

At this point I think the america Lives on pickup truck production is just a
fashion indicator that some car manufacturers love to disseminate to help
their stock over japanese makers who are not heavy on pickups.

~~~
HillaryBriss
wasn't a big part of the pickup truck success story that the government
required lower safety standards on them compared to passenger vehicles? like,
it worked out that trucks were more profitable and less costly to the end
consumer or something. so that's what car companies made.

~~~
Theodores
Chicken Tax. The danger was the VW Transporter, they didn't want a rerun of
The Beetle. So they taxed the vans/trucks VW were making with a tariff and
added it to The Chicken Tax.

Emissions are also different for trucks, they would not make it as a viable
product outside the U.S. due to the purchase and gas price incentives.

The VW Camper Van became a thing as adding seats to the van was a way of
evading The Chicken Tax. That bit was a happy accident. You could blame the
Germans for America's planet sized carbon footprint, had there not been the
Chicken Tax then Americans might be driving cars more aero and fuel saving
than these tank sized things. Incidentally some US pickup trucks are Sherman
tank sized, albeit not as tall and not as well armed.

