The PE is STILL 85. It was almost 1000 about a year and a half ago. They have sailed on smooth seas, now the market is rough and their products are having minor issues. Wait until there is one major problem and it will be a free fall.
I don't think PE is acceptable measure of value for a company like Tesla.
The real reason for the decline is money is becoming tight. Also you have increasing competition from Ford, and GM and other automotive companies that can sell cheaper than a Telsa due to scale.
The F150 Lighting is cheaper than the Tesla Model 3.
Mustang Mach E is a third of the price of the Model Y.
So as money is becoming tight, people that have any interest in owning an EV are more likely to buy cheaper alternatives. This on top of cars sales being in a free fall lately. Most car companies are seeing massive decrease in sales Y/Y.
The Ford Mustang Mach-E is a good car, but it costs a lot more than a third of the price of a Tesla Model Y. And at the moment the price is kind of moot anyway since most dealerships are completely sold out.
Last October Tesla had a market cap of $1 trillion and was worth the 10 largest auto manufacturers combined. It’s a stock that has been way overvalued. The $575 billion drop in market cap is itself more than the market cap of any other auto manufacturer. These facts make the drop in Tesla’s share price noteworthy and newsworthy. Then there is Elon’s oversized ego and his legion of sycophants to add to the newsworthiness of it all.
Tesla is definitely overvalued but so is every tech stock (and most other stocks besides). We have also seen an enormous boom/bust occur in the crypto sphere that is ongoing and many property markets around the world are looking at some degree of price correction.
It is a strange framing of the article to say "investor patience wears thin" leading to a decline in Tesla specifically when the whole stock market is declining globally alongside numerous other asset classes.
I think they're going to let the capital drain long enough to meaningfully lower inflation and open the monetary policy spigot again.
I'm not sure if there will be any lessons learned here by policy chiefs. It seems they waited so long to increase rates, while denying inflation, for political reasons and not rational ones.
I think the term tech company should basically not be used, except in very specific cases where a company develops the technical underpinnings of the rest of the economy like AI or chips or energy storage, avionics, etc.
Exxon is using AI to find potential new pockets of oil, is it a tech company too?
What a load of bollocks, it's just the age old tale of a guy who believes his own BS enough to stream it into the world . When there are many of them eventually one will succeed in selling his unsubstantiated narrative.
In a sense people are right when they say Tesla isn't a car company, it's a cult company. Cults are popping everywhere in the stock market and the so called business world. If it's indeed true that for every ant you see in the kitchen there are 100 that you don't see...well it's looking bad.
I've considered trying to augment some geophysics analysis with AI, but is it actually useful? I think not - geophysicists are cheap for the amount of value finding a good deposit, and if you're going to find something new, it's likely to be outside the training set
No. Plenty of companies have huge R&D in technology. Tesla is a car company because its revenue comes from selling cars, not AI. If Tesla had to survive selling AI or software it wouldn’t have lasted this long.
Another valid view is that Tesla is a parasite on the public dole that also happens to make cars.
McDonalds is a real estate company that happens to sell burgers. You see how that trite equation works for every company?
Tesla’s revenues come from car sales, not from licensing any amazing proprietary technology. Ford sells electric cars. Nissan has decent self-driving. Are they tech companies too?
Tesla has been massively overvalued for a long time. Elon himself said it was too high. The exceptionalism of Tesla was the cult of personality around Musk himself. The stock is strongly tied to public perception of one person.
This has been in Tesla's favour when they were tiny and struggling but may be to it's detriment now it's found its feet and is doing well.
It's an interesting shift happening now where the perceived relative value of man vs his company is changing. Is Tesla now being dragged down?
Not to mention - and this has been true for a long, long time - every time Elon Musk makes a controversial statement he becomes, in the eyes of everyone paying attention, a little more stupid and a little less like Tony Stark (which seems to be what he wanted to convey)
He has beem chasing controversy, up to and including naming a child with a publicity stunt name. This is not what people usually want to bet/invest on.
Edit: and picking a fight with Bernie Sanders on twitter. Then fighting on twitter about twitter to buy twitter
And making sweeping statements about Democrats. Regardless of any political takes, that's potentially tens of millions of people who could take offense, including those most active about electric vehicles and solar panels.
I don’t think so, I think he is only gaining momentum. Elon is delivering on a lot of fronts the world simply wasn’t capable of doing before he came along. He deserves the credit
To say these things and not mention his business acumen (he runs a few) makes it sound like sour grapes/ad hominem attacks on the guy.
Yes, he's an oddball and he has some weird fetish around controversy, but he's a business leader studied by other business leaders. He delivers. He managed to put electric cars on the map, he made rockets that land, he's now boring tunnels and doing neuro network engineering. Not sure why baby names are mentioned over these.
I guess that is my point - a more self-controlled businessman with that track record would inspire a tremendous amount of confidence
I didn't mean to discredit Elon Musk as an entrepeneur; only to highlight that the chaos he raises is not good for his own "brand" in the long run
The baby name is just an example to contrast his decisions to that of 'regular' people: most people are extremely averse about doing harm to their children for any reason
But I get your point - many people will care most or only about results. But I do think many more care about the way things are done
I'd say I'm abouy half and half, to be honest. I won't deny investing in Musk's enterprises but I for sure will make it a smaller part of my portfolio than it should - precisely because he may one day go on twitter and implode the stock
Because it's the only stock people have an emotional attachment towards.
People who are in index funds have no such emotional reaction because they know that they couldn't have possibly done better, because day trading is a guarantee to lose money and so is stock picking.
Forbes.com — I found a few pixels on the site not used for ads and experienced five seconds without a popup. Please have your “engineers” look at the site’s user experience.
