I wrote a blog post a while back stating that it was an untenable position to think that MoviePass was going bankrupt, while at the same time believing that Tesla was going to have a prosperous future. That’s a double-standard.
My point was not that MoviePass was going to be prosperous. My point was to show how bad a position Tesla was in if even a basket case like MoviePass had a clearer path to prosperity. Free from emotion, everyone evaluated MoviePass on the basis of it’s fundamentals. But many of these MoviePass skeptics don’t allow the same objective analysis to influence their view of Tesla.
When it comes to Tesla, everyone disregards how the financial statements show widening losses and almost $10 billion dollars gone up in smoke. Instead, they choose to focus on Musk’s grand vision of the future. They’ve exchanged facts for wild fantasies.
But the parallels between Tesla and MoviePass are uncanny. The MoviePass story spread like wildfire because the customers absolutely loved it. Any movie you wanted, any time of day, as often as you like. People loved it and couldn’t wait to tell all of their friends. But this was financially unsustainable. A strong fan base without a good business plan is still doomed.
People loved Tesla’s because the service was great and there was free supercharging all over the country. They couldn’t wait to tell their friends how much they enjoyed driving these computer/car hybrids. But like MoviePass, it doesn’t matter how much fan fervor there is if the financials don’t make sense. Eventually Tesla, like MoviePass, is going to run out of investor cash to burn.
It’s come out recently that MoviePass actively tried to thwart customers from accessing their accounts in order to stop them from ordering more movies. This was to help the company conserve cash.
Tesla is following the same playbook. It’s being reported all over the world that Tesla isn’t answering the phones at their service centers. Customers can’t get roadside assistance, service appointments, or even spare parts. Tesla is bleeding cash and has no choice but to lock customers out from accessing their promised benefits, ala MoviePass.
Tesla’s latest quarterly results were horrific. The tech press tried to put a positive spin on this turd by stating that Tesla had a positive cash flow quarter. But that’s only true because Tesla took on new debt, sold more equity, and unloaded excess inventory. Saying that Tesla has a stronger balance sheet because they sold more equity and incurred more debt is like saying an unemployed man is in a better position because he just took out a $10,000 cash advance on his credit card and sold his wife’s engagement ring. It’s actually a worse long-term position.
If you looked at MoviePass in the last year and said that they were going to go bankrupt, then the same obvious conclusion should jump out at you regarding Tesla.
When it comes to Tesla, everyone disregards how the financial statements show widening losses and almost $10 billion dollars gone up in smoke. Instead, they choose to focus on Musk’s grand vision of the future. They’ve exchanged facts for wild fantasies.
But the parallels between Tesla and MoviePass are uncanny. The MoviePass story spread like wildfire because the customers absolutely loved it. Any movie you wanted, any time of day, as often as you like. People loved it and couldn’t wait to tell all of their friends. But this was financially unsustainable. A strong fan base without a good business plan is still doomed.
People loved Tesla’s because the service was great and there was free supercharging all over the country. They couldn’t wait to tell their friends how much they enjoyed driving these computer/car hybrids. But like MoviePass, it doesn’t matter how much fan fervor there is if the financials don’t make sense. Eventually Tesla, like MoviePass, is going to run out of investor cash to burn.
It’s come out recently that MoviePass actively tried to thwart customers from accessing their accounts in order to stop them from ordering more movies. This was to help the company conserve cash.
Tesla is following the same playbook. It’s being reported all over the world that Tesla isn’t answering the phones at their service centers. Customers can’t get roadside assistance, service appointments, or even spare parts. Tesla is bleeding cash and has no choice but to lock customers out from accessing their promised benefits, ala MoviePass.
Tesla’s latest quarterly results were horrific. The tech press tried to put a positive spin on this turd by stating that Tesla had a positive cash flow quarter. But that’s only true because Tesla took on new debt, sold more equity, and unloaded excess inventory. Saying that Tesla has a stronger balance sheet because they sold more equity and incurred more debt is like saying an unemployed man is in a better position because he just took out a $10,000 cash advance on his credit card and sold his wife’s engagement ring. It’s actually a worse long-term position.
If you looked at MoviePass in the last year and said that they were going to go bankrupt, then the same obvious conclusion should jump out at you regarding Tesla.
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