The automotive industry is slack-jawed that Tesla briefly surpassed General Motors in market capitalization Monday. The former loses money, is deeply indebted, and makes relatively few cars. The latter makes money, wiped clean its balance sheet in the financial crisis, and is the U.S. automotive market share leader. Each is worth in the neighborhood of $50 billion, both valuations validated by public-market investors who can get in and out of the respective stocks with ease. (I note this in contrast, for example, to the $69 billion-or-so value private investors have put on another transportation company, Uber, whose financial results aren’t disclosed publicly.)
What’s most irksome to the car-industry savants is that Tesla isn’t valued on traditional metrics like earnings and cash flow and market penetration. It is valued on hope. That and the genius factor: automotive lifers run General Motors; Elon Musk, the techie with the golden touch, runs Tesla.
This almost certainly will end badly, at least in the near term, for Tesla’s retail investors. (Retail is a capital-markets euphemism for amateurs who invest in stocks with roughly the same level of knowledge they have when they play blackjack in Vegas.) Tesla has a history of product-launch stumbles. The giants of the car industry are getting their acts together on electric cars and self-driving technology. There’s no question that Musk has more vision on a bad day than major auto honchos have in a year. But that doesn’t change the fundamental situation that Tesla’s fundamentals don’t warrant such a rich stock price.
One day maybe they will. Until then, look out below.
| Adam Lashinsky | |
| @adamlashinsky | |
| adam_lashinksky@fortune.com |
BITS AND BYTES
Things look pretty grim at Toshiba. The Japanese conglomerate on Tuesday reported unaudited financial results for its third quarter: it lost $5.2 billion for the nine months ended Dec. 31, but wasn't able to get its auditor to approve that statement. The company's financial crisis stems from huge losses at its U.S. nuclear division, which Toshiba is trying to cover by selling its prized memory chip business. One of the bidders is Foxconn, the huge Taiwanese contract manufacturer. (Reuters, New York Times, Wall Street Journal)
Qualcomm fires back against Apple in licensing dispute. The mobile chip giant on Monday accused the iPhone maker of hurting its business and not abiding by the terms of contracts between the two companies. Qualcomm is facing antitrust accusations in the United States, South Korea, and elsewhere. Apple sued its longtime chip supplier in January, saying Qualcomm was forcing customers to pay excess royalties for its patents. (Fortune)
Boeing will use 3D printing technology to produce parts for its Dreamliner. The aviation giant signed a contract with Norsk Titanium to print some of the structural components. The move could save $2 million to $3 million in production costs for each of its 787 Dreamliner airplanes. It makes about 150 of them ever year. (Reuters)
It looks like buyers have put Samsung's smartphone recall debacle behind them. Orders for the Galaxy S8 and S8+ are outpacing the early demand for the model's predecessor by "double digit" percentages, according to the company. Last year's edition, the Galaxy Note 7, was scrapped after flawed batteries caused some of the units to catch on fire. (Fortune)
Microsoft buys a startup to boost its cloud business. The software giant is paying an undisclosed sum for Deis, a maker of software "containers," which are seen as the new building blocks of cloud-based applications. (Fortune)
Vizio and suitor LeEco call the whole thing off. The Chinese technology company last year offered to buy the U.S. television maker for $2 billion, in part so it could establish a U.S. presence. On Monday, LeEco called off the deal, citing "regulatory headwinds," although the two are still working on an initiative to bring some of Vizio's TVs to the Chinese market. (Reuters)
PEOPLE AND CULTURE
Barclay's U.S. payments arm taps former HPE executive as new CIO. Shelton Shugar was previously the vice president of enterprise cloud services for Hewlett Packard Enterprise. His resume also includes jobs at CA Technologies, eBay, Verisign, and Yahoo.
Uber drivers aren't worried about self-driving cars. Yet. Many market watchers believe autonomous vehicles will put human drivers out of work. But that doesn't take into account the psychological value of chats during a long commute or other services, such as hefting luggage. “There are a lot of idiosyncrasies that [self-driving cars] can’t account for," said Kat Ellery, who drives for Uber and Lyft in Ohio. (Time)
Spotify CEO mourns executive killed in Sweden's truck attack. British-born Chris Bevington was a director who was at the music streaming company for five years. (Fortune)
IN CASE YOU MISSED IT
Data-Obsessed Baseball Teams Are Turning to the Cloud for Help, by Barb Darrow
Amazon Will Make Up 50% of All U.S. E-Commerce by 2021, by Phil Wahba
Tech Could Soon Take Over All of the Sports You Watch, by Ben Shields
Why Police Asked Ford to Make Them a Hybrid Car, by Justin Worland
Court Ruling on Celebrity Photos Raises New Copyright Risk for Websites, by Jeff John Roberts
ONE MORE THING
It looks like you'll still need airplane mode for your cell phone indefinitely. The new Federal Communications Commission Chairman Ajit Pai doesn't like the idea of relaxing rules that would allow passengers to use their smartphones to make calls while in flight. There's one snag though: the Department of Transportation has jurisdiction over Wi-Fi networks, which could enable conversations anyway. (Fortune)
This edition of Data Sheet was curated by Heather Clancy.
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