Our admonition in the first of today's Tesla posts still stands but here is
Jamie Powell at FT Alphaville with some of the negative considerations
surrounding the second of today's announcements:
This just in from Bloomberg:
Hertz Global Holdings Inc., barely four months out of bankruptcy, placed an order for 100,000 Teslas in the first step of an ambitious plan to electrify its rental-car fleet, according to people with knowledge of the matter.
It’s the single-largest purchase ever for electric vehicles and represents about $4.2 billion of revenue for Tesla Inc., according to the people, who asked not to be identified because the information is private. While car-rental companies typically demand big discounts from automakers, the size of the order implies that Hertz is paying close to list prices.
Great scoop! Now, you might be wondering what the market has made of it. After all, the reborn Hertz has a market capitalisation of almost $12bn, or $21bn if you include debt, so this one order represents a third of its entire equity value. Or, double the $1.8bn it had in cash and cash equivalents at last count at the end of June.
Quite an undertaking then, particularly given Tesla has a reputation for making cars that consumers love, until they have to get them serviced. Don’t take our word for it.....
....MUCH MORE
The reader reactions to Jamie's post should be fun, he seems to be preparing:
We will probably go back to Alphaville two or three times for the comments.
In the meantime, for some reason this story brings to mind a completely unrelated FT headline from October 2020:Vatican used charity funds to buy Hertz credit derivativesI should maybe see if I can find out how the Pope is positioned on this latest news, the naked credit default swaps worked out pretty well.
