Tesla Share Price Plunge Knocks $267 Billion Off Market Value (theguardian.com) 93
A sharp decline in Tesla's share price has wiped more than $250 billion off the value of the electric car company, and dragged down the value of an Edinburgh-based investment fund that is one of Tesla's biggest backers. The Guardian reports: The shares dropped by 7.5% in early trading in the U.S. on Friday to $575 -- setting them on course to close down 16% this week and 35% below their record peak of $883 on 26 January. The decline has knocked $267 billion off Tesla's market value, from $834 billion in January to about $567 billion. The collapse has also wiped billions from fortune of Elon Musk, the chief executive, who owns about 20% of the shares.
Musk, who lost his briefly held title of the world's richest person last month, has seen his paper fortune drop by $7.5 billion so far this year to an estimated $162 billion. Analysts said Tesla's shares were falling as investors worried that the car company may be vastly overvalued. At the same time rising US bond yields are making companies that pay small dividends unappealing. Tesla has never paid a dividend.
Musk, who lost his briefly held title of the world's richest person last month, has seen his paper fortune drop by $7.5 billion so far this year to an estimated $162 billion. Analysts said Tesla's shares were falling as investors worried that the car company may be vastly overvalued. At the same time rising US bond yields are making companies that pay small dividends unappealing. Tesla has never paid a dividend.
Same elon Strat. (Score:2)
Re:Same elon Strat. (Score:4, Insightful)
Perhaps he shouldn't have spent the company's cash on Bitcoin.
Re: (Score:2)
They had almost 20B in cash and put 1.5B into Bitcoin - I think they'll be ok.
Re: (Score:3)
They had almost 20B in cash and put 1.5B into Bitcoin - I think they'll be ok.
A billion here, a billion there. After a while you're talking about real money.
Re: (Score:1)
Re: Same elon Strat. (Score:1)
Re: (Score:1)
Re:Same elon Strat. (Score:4, Insightful)
Regarding Tesla, the share price has risen far beyond the company fundamentals on hype, bullshit and a cult of personality. Shares are literally 10x as high as they were a year ago and I expect there will be a correction to bring the value more in line with reality.
Re: (Score:2)
yes, and they'll miss the lower point and have to buy back at a higher price. in 10 years it'll be 2000-3000 per share
Re:Same elon Strat. (Score:4, Insightful)
Indeed, these sorts of drops happen on average once every 6-9 months or so. Last fall it fell from a close of $498 on 31 August to a close of $330 on 8 September (a -34% drop - slightly deeper and significantly steeper than the current one). You get used to it as a Tesla investor. Indeed, most conviction-investors take advantage of, and actually appreciate, them.
The people who statistically lose money are those who engage in a policy of "sell on the way down, buy on the way up". Unless you're psychic and happen to know in advance where the tops and bottoms will be, you're going to average selling at somewhere below the median price on the dip, and buying at somewhere above the median price on the rise.
A policy of "buy on the way down, sell on the way up" is statistically a money-maker. But you have to be right about the long-term success of the company. So long as the long-term thesis remains intact, it is the proper strategy. One has to of course constantly reevaluate their long-term thesis.
Re: (Score:3)
A policy of "buy on the way down, sell on the way up" is statistically a money-maker.
Wow, that sounds awesome. Can I sell you my Enron shares?
Re: (Score:2)
suggestion.
the car works.
Re: (Score:2)
What makes you think they're selling at a loss? Many people will sell to *stop* a loss. I.e. they'll sell when the price is dropping, but still above what they bought in at. Many institutional investors may be required to do this.
Re: (Score:1)
Re: (Score:3)
Just to clarify, there's a very human impulse to think "the stock is worth less today than it was yesterday, therefore I have lost money" even though you bought three months ago and the decreased value is still greater than what you paid for it.
(Honest) investment advisors will tell you that this is a source of tears. When you make an investment you spend money, and that money is now gone. When you sell the investment you get money. Those are the only two quantities of actual money, and the only two you sho
Re:Same elon Strat. (Score:5, Interesting)
Perhaps he shouldn't have spent the company's cash on Bitcoin.
The Bitcoin may have had something to do with the crash.
Many people bought Teslas because they want to save the world, and Tesla was doing big things to address big problems.
Then Musk turns around and puts $1.5B into Bitcoin, which pointlessly wastes more energy than is used by Argentina.
I own a Telsa. I feel disillusioned. My next EV will not be a Tesla.
Re: (Score:1)
Re:Same elon Strat. (Score:5, Insightful)
The Bitcoin may have had something to do with the crash.
I doubt it. While it was a bad PR move the amount of money we are seeing move here is institutional in level and they by-n-large couldn't give a shit about altruistics like saving the world.
Bond yields are up, and that almost universally causes a drop in the biggest companies. Tesla isn't alone. Apple, Amazon, Facebook (though that is an acceleration of a trend) and NVIDIA all saw similar drops in the past few weeks. Bucking the trend really (and it is a trend) is Microsoft who are only down a little, and Alphabet which somehow isn't down at all.
That and some news articles are calling this a correction to the over excitement that happened towards the end of last year. I.e. the market crashed in march due COVID but then over-recovered in a nonsensical way. This could just be a sign of a return towards normality.
To say nothing of Tesla's insane overvaluation.
Re: (Score:2)
...and to think that some people make purchase decisions on merit.
I would consider buying and EV if were a good car, that rules out Tesla.
Re:Same elon Strat. (Score:4, Insightful)
I'm also disappointed and not at all happy re: Bitcoin, but I'm also not going to cut off my nose to spite my face. Bitcoin will ultimately rise and fall on its own, and it's the treasury's responsibility to put regulations on it, or not. I hope the Laissez-Faire approach will end sooner or later, and preferably sooner.
Bitcoin is also not the reason for the crash. I have a number of stocks which crashed much deeper than Tesla did, having nothing to do with Bitcoin. It's about a spike in long-term inflation rate expectations, which reduces the net present value of future profits of growth companies.
Re: (Score:1)
Re: (Score:1)
Re: Same elon Strat. (Score:1)
some cheap looking grain silos
There are websites out there for shills and humanities majors.
You think? (Score:4, Insightful)
Relativity (Score:2)
Re:Relativity (Score:5, Interesting)
More important is how is Tesla staying ahead of competition?
Uh, not at all [wikipedia.org].
Tesla's stock price is based on some magical fantasy where every other major automaker decides they'd rather sell cupcakes, I'm assuming, than cars. The fact that Tesla's cars run on electrons rather than dead dinosaurs matters very little. The issues holding back major adoption of EVs are range, price, and their negative public perception in the marketplace. Should those issues change for the better in the future, there's no reason to assume Tesla will be the sole benefactor.
Re: (Score:3)
More important is how is Tesla staying ahead of competition?
Uh, not at all [wikipedia.org].
Tesla's stock price is based on some magical fantasy where every other major automaker decides they'd rather sell cupcakes, I'm assuming, than cars. The fact that Tesla's cars run on electrons rather than dead dinosaurs matters very little. The issues holding back major adoption of EVs are range, price, and their negative public perception in the marketplace. Should those issues change for the better in the future, there's no reason to assume Tesla will be the sole benefactor.
Well, it isn't going to matter when Elon steps out onto the surface of Mars an a few years after he and his legions if faithful become the colonizers of Mars. Mere earthing matters will be of no concern then.
Re: (Score:2)
Tesla's stock price is based on some magical fantasy where every other major automaker decides they'd rather sell cupcakes, I'm assuming, than cars.
The price does seem ridiculous. But then I remember this online bookshop. I figured that even if they took over 100% of the world book market, they'd still have a stupidly high P/E ratio. I wish I'd bought those bookshop shares.
Re:Relativity (Score:4, Interesting)
Tesla is a niche player compared to the manufacturing capability of any one major car manufacturer.
As those manufacturers move towards EV (they're currently making the most of their ICE patent portfolio and tooling), Tesla quickly becomes irrelevant. Less than 1% of the market place, not able to churn out even a small percentage of what Ford alone could manage.
It's about attention. The ICE manufacturers don't have their attention on EV at the moment. They can literally afford to let Tesla own the whole market, top to bottom. But even then Tesla don't. But when the time comes that it's no longer viable to make ICE, and they move their tooling, design, R&D, patents and manufacturing to ICE, Tesla is a mere blip to any one of them, and virtually non-existent.
Ford sell more cars in a quarter than Tesla ever have. They're really that irrelevant. It's just that at the moment the big guns aren't looking at EV as anything more than a toy. When their attention does shift focus, even if several of them fail entirely (like Kodak and digital cameras), Tesla is just an ant to be crushed underfoot.
And it does not have any significant manufacturing, any significant patents to licence, any unique selling point (even the AI is ropey). It's entire value will be as a brand for one of the others to buy up and slap the badge on something else. Even the charger network isn't really worth much in the grand scheme of things.
ICE manufacturers have been told they have about 10 years before only EV will be allowed to be sold. That's 10 years of selling as much of the existing patents, spares, stock, etc. as they can before they have to re-tool everything.
In about 5 years, they'll finalise their designs and R&D for that time. At the moment, the R&D investment of even just one of them wipes the floor with Tesla. But they have literally thousands of times more saleable products and designs just sitting in their factories that will be obsolete in 10 years time. They'll get every penny out of those first, then when the first of their REAL competitors moves to making anything greater than a toy... then the market will open.
If Tesla survives 20 years as anything more than a badge, I'll be surprised.
Re:Relativity (Score:5, Informative)
2012: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 4,8% of the BEV market)
2013: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 12,3% of the BEV market)
2014: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 15,8% of the BEV market)
2015: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 15,8% of the BEV market)
2016: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 16,7% of the BEV market)
2017: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 15,5% of the BEV market)
2018: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 16,9% of the BEV market)
2019: Existing automakers are switching to EVs, Tesla is going to get crushed (Tesla = 19,2% of the BEV market)
Still waiting for full global 2020 numbers, but similar to 2019. Non-Tesla automakers are still stuck in the death spiral of selling minimal-to-negative margin EVs in ever-greater quantities just trying to keep up with Tesla's volume growth.
One would think that if a given thesis had proven so consistently and repeatedly wrong, people might stop to reexamine it and notice why (e.g. "building cars" != "building electric powertrains and vehicles optimized around them"; vertical integration and rapid iteration are keys to rapid reduction of COGS while simultaneously improving stats, but these things are antithetical to old-school automakers; etc).
But apparently that never occurs to the thesis's proponents.
(Note that we're still pretending that Tesla is just an automotive company when it's actually one of their slower-growing divisions, but that's an entirely different discussion)
Re:Relativity (Score:5, Interesting)
(Note that we're still pretending that Tesla is just an automotive company when it's actually one of their slower-growing divisions, but that's an entirely different discussion)
Most people neglect to look at the production of batteries, assuming that any day of the week VW or GM can just drop a purchase order on LG or Panasonic and everything they need will be on the dock by Monday.
Reality: they will have to wait for Tesla's orders to be filled first. I didn't realize this myself until I recently saw a tweet by Elon that they are revenue-limited by battery production (which I knew) of not only their own plant but those of their battery vendors (which I didn't know.)
If you just follow the money, Tesla is a battery company where they sell cars as a sort of carrier for them. Sort of the same way that Airlines are in the business of selling you jet fuel and loan you an airline seat so you can use it.
Re: (Score:2)
(Note that we're still pretending that Tesla is just an automotive company when it's actually one of their slower-growing divisions, but that's an entirely different discussion)
Most people neglect to look at the production of batteries, assuming that any day of the week VW or GM can just drop a purchase order on LG or Panasonic and everything they need will be on the dock by Monday.
Depending on the size of the order they just might. More likely is agreements where a factory's cost and ownership is shared in exchange for a steady source of batteries. If car makers standardize on a battery design for the majority of their fleet they can combine to create large economies of scale for the battery manufacturer.
If you just follow the money, Tesla is a battery company where they sell cars as a sort of carrier for them. Sort of the same way that Airlines are in the business of selling you jet fuel and loan you an airline seat so you can use it.
Right now, Tesla is an EV credit selling company that happens to make cars and buy batteries. Unless Tesla can get its total costs in line and not count on revenue from selling EV
Re:Relativity (Score:4, Insightful)
Meanwhile in the real world, credits in Q4 were 401M, vs. a total revenue of $10,7B. But thanks for playing.
Should I also bother mentioning that in nearly half their global market, the government pays EV customers $7500 to NOT buy from them? Or the fact that GAAP stock compensation expenses were up $352M in Q4 over 'Q1, due to the surge in the company's stock price? Or half a dozen things that - funny enough - you never see people so eager to point out because they work against Tesla.
Tesla's vehicle margins are superb - over the past year, 22-28% pre-credits, pre 16-21% post-credits. It also has superb EBITDA and non-GAAP profits (measures that exist to properly evaluate growing companies) - in Q4, $1,85B and $903M, respectively - alongside strong free cash flow ($1,69B in Q4). Compare these figures to total revenue; they're superb. It maintains only relatively low GAAP profits (Q4 = $270M). GAAP penalizes growth companies (it's hard to show a profit at all while growing rapidly under GAAP), and it's in the company's interest to minimize GAAP, since they'd be taxed on GAAP profits.
Analysts price targets aren't this high on a lark. They're this high because Tesla has turned into a cash machine while also undergoing rapid growth.
Re: (Score:2)
Meanwhile in the real world, credits in Q4 were 401M, vs. a total revenue of $10,7B. But thanks for playing.
Revenue is not profit, however.
Should I also bother mentioning that in nearly half their global market, the government pays EV customers $7500 to NOT buy from them?
In the US, GM also has had the incentive phased out; and many countries still apply incentives unilaterally or are changing them out for all EVs.
Or the fact that GAAP stock compensation expenses were up $352M in Q4 over 'Q1, due to the surge in the company's stock price?
Even if you disregard the stock expense, which also has tax advantages for Tesla, without credits Tesla is still a money losing operation.
Or half a dozen things that - funny enough - you never see people so eager to point out because they work against Tesla.
Tesla certainly has some things going for it, but is it worth as much as all car companies combined? I doubt it. As I said, they need to become profitable without credits to stay viable long term
Electric is the near future, not the present (Score:2)
Currently it is a niche, which is why the big manufacturers are only dipping their tows in it.
In five years time half of all new cars sold will be electric. Then I would be very surprised if most of those cars are made by Tesla. Tesla will be successful, but it will now have serious competition.
And as is posted above, Tesla does not make most of its own batteries. And the critical technology in electric cars is the batteries. Electric motors were well understood long ago, with only marginal improvements
Re: (Score:2)
Relatively small auto makers made more cars than Tesla last year, made a profit, paid dividends, don't have massive debts, and make EV's as well as ...meanwhile the largest markets are China and Europe by a long way.. Local manufactures are beginning to catch up and will soon overtake in Europe, and in China local manufactures are struggling and China could become protectionist at any time ...
Re:You think? (Score:4, Interesting)
Musk's great advantage as a tech visionary is the willingness of investors to stick with him through the inevitable string of failures. The pot of gold at the end of the rainbow is to own part of a company that *dominates* the market for something -- the way Amazon dominates online retailing.
I think people may be reevaluating Tesla because traditional auto makers are starting to get their heads out of their hindquarters and get serious about making electric vehicles people want to buy. Just today I read that Ford's Mustang Mach-E is eating into Tesla's market share, although Tesla sales continue to grow. The Mustang is a compelling car, priced a little higher than a model 3 but with a lot more curb appeal. It's not a Tesla killer, but it's a serious competitive product.
So people maybe people are starting to think Tesla won't always dominate electric vehicles the way it does now.
Re: (Score:2)
Musk can't string them along forever. Tesla's Full Self Driving cars have been just around the corning for half a decade now. Robotaxi was supposed to launch last year, for sure this time, and create a vast new revenue stream. Realistically it will probably never work as advertised, and every year that goes by turns it into more a liability as more customers who have been waiting realize they have been ripped off.
Tesla's EV tech is decent but not exceptional. Yeah it does some party tricks like stupid accel
Re: (Score:2)
I think as more manufacturers enter the market Tesla's vehicle sales aren't going to be anywhere near as rosy although th
Re: (Score:2)
"Although the huge screen mounted on the dash is as stupid and distracting as it is in a Tesla. It is an example of when NOT to copy Tesla."
Yep, and reviewers have noted that larger drivers bang their knees on it. Terrible.
Thankfully, other manufacturers aren't mimicking this turd idea from Tesla. Imagine how good BEVs will be when serious companies start making them.
Re: (Score:2)
Well, glaring ergonomic blunders are party of the sports car experience. My brother-in-law had a Honda S2000, which in many ways is an awesome car -- in fact it's the kind of car that when get it everyone you know gets a ride in it at the first opportunity. If you've ever had a car like that you know what I mean. Anyhow the first time I shoehorned myself into the passenger seat of the thing, I thought to myself, "You've got to be kidding."
Re: (Score:2)
Meanwhile in reality, Ford just delayed deliveries [theverge.com]
right after starting them (and is paying off customers to not cancel), and then just a month and a half after launching it, with only a couple thousand vehicles on the road, it already got its first recall [theverge.com] (the frame held together by loose bolts).
Before all this, Ford reported a global total of 40k preorders for the Mach-E. By contrast, back in 2017 when the EV market was far smaller, Tesla had 325k preorders for
Re: (Score:2)
I'm trying to remember the last time I've touched the touchscreen for wipers. Many months ago. The wipers are auto, and if I need a single swipe, I use the stalk button. If I don't like the auto speed (which is rare), I almost always use voice commands.
At least one person has crashed [bbc.com] their model 3 trying to set the wipers. And as an added indignity faced a fine and road ban. And numerous others have commented on how dumb it is to have a button for a wipe but nothing else.
It's an unforgivable oversight. Automatic wipers might suffice for 90% of the time but there will be occasions where someone wants to set the speed manually and every single other car, even those with automatic wipers, manages it with the stalk. Even the Mach-e.
Re: (Score:2)
Let me reiterate, with boldface for emphasis:
"I'm trying to remember the last time I've touched the touchscreen for wipers. Many months ago. The wipers are auto, and if I need a single swipe, I use the stalk button. If I don't like the auto speed (which is rare), I almost always use voice commands."
And people crash their cars for all sorts of stupid reasons. The rates of crashes in Teslas is, however, well below average.
Re: (Score:2)
And then going off to say Teslas are more safe is beside the point. Because even if true it has nothing to do with omitting a wiper stalk and if T
Re: (Score:2)
Reviewers don't especially enjoy how Teslas creak and rattle when they accelerate. If you haven't seen that, they you're not seeing reviews from actual car people. Tesla focuses on maintaining the loyalty of zealots, not on improving cars.
Take, for example, the Model S/X refresh. The principal theme there is "now three motors, sub-2 second 0-60". The entire focus is to improve literally the only thing that doesn't matter, and all for a penis-measuring contest with Porsche. Never mind that a Porsche is e
Re:You think? (Score:4, Informative)
I literally own one, have been in several, and have never heard any "creak and rattle when they accelerate".
Re: (Score:2)
Reviewers? Go drive one.
Re: (Score:2)
The folks buying and selling TSLA on the open market aren't investors and Tesla sees not so much as one thin dime of their money. They're speculators and gamblers.
I think
The U.S. financial system needs improvements. (Score:3)
U.S. Stock Market people find a way to be negative about a stock. The stock value decreases rapidly. People who don't spend 24 hours each day understanding the stock market sell their stock.
Then Stock Market people buy the now lower-valued stock; they make huge amounts of money. The value of the stock goes up again.
I'm not saying I'm an expert in the U.S. financial system. However, it seems obvious it needs a LOT of improvement.
Re: (Score:2)
Is everyone on this website a moron about life?
I agree with you 100%, op is talking about some 70’s tactics. The cool thing for billionaire hedge funds and market movers is to find any smaller company they don’t like and use their finnancial bulk to short the ever loving fk and pile drive the price into the ground thus making billions of dollars, unemploying thousands, and deciding who gets to live and who gets to die.
Well, at least it was until Melvin got it’s short and curlies stuck in a squeeze and lost 47.5 billion minimum. The
Re:The U.S. financial system needs improvements. (Score:5, Interesting)
That's just the way things work. Anything with perceived value can become over-valued and correct: Beanie babies, tulips, dot-coms, gold, silver, and of course $TSLA. There is no reasonable way to fix that. Boom/bust bubbles are driven by mass psychology that's part of human nature. They can be mitigated somewhat, but not entirely fixed.
They could have tighter criteria for adding companies to indices. $TSLA's addition to the S&P 500 fueled some of this on the upside. They could tax long and short-term capital gains at the same rate as ordinary income. The passage of a one-year holding period for many $TSLA investors has probably fueled the downturn because now they can take profits and pay less taxes, but you know what? Things will still bubble. See the first paragraph.
Re: (Score:2)
Re: (Score:1)
Re: (Score:2)
Yes there will people who'll downplay stocks just as there are those that play them up. And
Re: (Score:2)
Of course, all the time, every stock, with everything from one dollar to a billion dollars.
The problem is that a sharp drop is then a gamble because - contrary to the Gambler's Fallacy - it does not mean that it will bounce back up. Ever. Many, many, many people have gone bankrupt with that thinking. Even if it recovered 200 times previously, it does not mean it would recover on the 201st.
That's pretty much what fed the dot-com boom and bust, for instance, and there were few survivors of that.
Yes, it's n
Three posts already (Score:3, Funny)
And no one has blamed those nefarious short sellers yet? You Musk fanbois are dropping the ball...
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
And no one has blamed those nefarious short sellers yet? You Musk fanbois are dropping the ball...
After taking a sideways glance at their $TSLA losses they probably just shorted themselves real good this time.
Re:Three posts already (Score:4, Interesting)
When Musk decided to spend $1.5 Billion of TSLA cash on bitcoin instead of improving the production lines this was obviously coming. Red Flags don't get any redder than that. TSLA has always been a casino gamble but nobody ever dreamed Musk would gamble with the House's money instead of the taxpayer rubes he's been bilking before.
Re: (Score:3)
While I agree it's bad PR the reality is that this amount of money is only moved by institutional investors. And they don't give a shit about things like Bitcoin's green credentials. Quite the opposite they actively pump money into companies that work with it.
If this were about the bitcoins TSLA would have tanked at the time the bitcoins were purchased. Also NVIDIA, Apple, Facebook, and Amazon would have been left alone, instead they are all following the same trend.
There are larger market forces at play he
Re: (Score:2)
Completely true. However, institutional investors are even more likely to be leery of a CEO who spends a significant fraction of a company's cash on a speculative commodity.
Re: (Score:2)
Normally I'd agree with you. Excep Musk shits pure gold and institutional investors love him. There's a reason his stock is so insanely valued despite poor P/E and Debt ratios.
Re: (Score:2)
Volatile stocks are volatile. News at 11 (Score:2)
Sounds to me like a lot of profit taking happened.
cut the rations (Score:3)
Comment removed (Score:5, Insightful)
Re: (Score:2)
Evan after the drop, the P/E ratio is over 900.
-jcr
Have you seen how much Tesla invest in growth? As a stockholder, I am annoyed they make any money at all.
Re: (Score:2)
I'm conflicted. Your comment makes you out to be a young investor but your UID would point to the opposite. As a stockholder you should start wondering if a 16 year old company shouldn't be paying you dividends rather than chasing the the endless growth unicorn without delivering substantial earnings by now.
Tesla is nearly old enough to vote, it's time it grew up as well.
Re: (Score:2)
They'll have to grow for multiple years. They are nowhere near the size they'll be. No demand problem for their cars, and they can still lower their price
Re: (Score:2)
Indeed. But a company that goes through 16 years of growth powering ahead by endless loans is not a healthy company. Your comment makes perfect sense 10 years ago. At some point "long hold" investors are going to say "Oi mate, you going to actually turn a profit or what!"
Companies that focus on endless growth without returning profits typically suffer massive crashes. I really really hope that won't be the case for Tesla.
Re: (Score:1)
I'm conflicted. Your comment makes you out to be a young investor but your UID would point to the opposite. As a stockholder you should start wondering if a 16 year old company shouldn't be paying you dividends rather than chasing the the endless growth unicorn without delivering substantial earnings by now.
Tesla is nearly old enough to vote, it's time it grew up as well.
This is my second /. account. The first one was lost some time during the early 00s. So, no, Im not a young investor.
I suppose you are right. But, seeing that they double their capacity for production every so often, seems to me to be a reasonable expansion. In particular in a generally saturated market. Not many car companies are growing like they do.
Speaking of which. I do believe it was Warren Buffet who wrote that he didn't buy stocks with dividends. If a company can't invest it's money better than givi
Re: (Score:2)
Buffett's company Berkshire Hathaway still doesn't pay a dividend after 55-odd years of his ownership.
Re: (Score:2)
Dividends are a red herring, the point is getting the leverage and profits under control. Berkshire Hathaway may not pay dividends but they did just issue a huge buyback with all the spare cash they had.
Re: (Score:2)
Re: (Score:2)
My point is less about dividends, and more about focusing on actually making a profit rather than endless growth. Tesla is massively surviving on hype. Any other company with such a high price/earnings ratio combined with such a high debt/equity ratio would be listed as a solid sell or otherwise as a very high risk gamble. That's a healthy position for a company to be in during the first few years of its life, not a healthy position for a company with multiple large factories and a lot of production.
I reall
Re: (Score:1)
My point is less about dividends, and more about focusing on actually making a profit rather than endless growth. Tesla is massively surviving on hype. Any other company with such a high price/earnings ratio combined with such a high debt/equity ratio would be listed as a solid sell or otherwise as a very high risk gamble. That's a healthy position for a company to be in during the first few years of its life, not a healthy position for a company with multiple large factories and a lot of production.
I really hope it's not the case, but companies that chase growth endlessly on leverage tend to eventually collapse. I doubt Warren Buffet would invest in a mature company that demonstrates a profitability strategy of a small startup.
Also on dividends, they may not be important to individuals but they are important to institutional investors, as is positive cashflows and low leverage.
There is no doubt that this is hype stock which is still acting like a startup. I would also understand why institutional investors would avoid what is effectively a lottery ticket. As for debt, they actually have larger cash reserves than debt. So cash - debt = about $2 billion. And as demonstrated, they can easily raise money just selling some shares.
Nitpicking I know. I agree with you on all points.
Dogecoin to the rescue! (Score:2)
Re: (Score:2)
Yeah but... (Score:1)
It was valued at $1.6 million per car sold 2020 (Score:2)
I think Tesla is a good company and I think they will continue to see strong growth, but the stock valuation is still freaking nuts. It is still vastly overvalued. The bitcoin investment did not help, neither did the exploding rockets. Also, there is more competition that is actually really competition. Have you seen the specs on the Hyundai Ioniq 5? It is the first vehicle that has Tesla-like range and performance at a reasonable price. Oh yeah, it also supports Vehicle to Load making it a neat little port
Vastly overvalued stock (Score:2)
The company Tesla will hire a dozen CEO’s for a baker dozen subsidiaries and another dozen CTO’s just to build future runway projects alone.
Maybe a $27B “shock” awakes the fiduciary in Elon to address the “value” proposition that investor confidence put behind every word Elon spoke. OR Tesla will do nothing. TSLA will further settle to its observable universe of real opportunity.
EV growth stocks in general took a hit. (Score:2)
Much larger story at work here (Score:2)
Yes Tesla is way down... but so is most of the Nasdaq.
Apple had a record quarter, and pretty much ever since then it too has been falling steadily, at times nearly the same rate as Tesla percentage-wise.
Basically a ton of people are selling out of the Nasdaq or other growth stocks currently, and when that ends Tesla and other companies will probably regain a fair amount of loss.
I still like Tesla as a long term investments but dropped all tech stocks when it became apparent what was happening.
Who would have guessed (Score:2)