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I don't know about SpaceX (since they're private), but anyone who can read a quarterly report knows that TSLA is one downturn away from becoming insolvent. Thei

by bjl 9y ago

I don't know about SpaceX (since they're private), but anyone who can read a quarterly report knows that TSLA is one downturn away from becoming insolvent. Their last bond issuance was well into junk territory, and the cash burn means they'll be forced to raise more money sometime this year. If cash becomes harder to come by they're in real trouble. It doesn't help that they seem incapable of ramping up Model 3 production.

tuna-piano 9y ago
It's kind of weird. Their bond rating is pretty bad, but yet their stock market cap seems super high - 5x last years revenue (with profits of -2B). Of course, if there is risk to the bonds, that means the equity is even riskier. Are many sophisticated investors buying the stock or is it mainly retail investors who love the brand+man?
- bjl 9y ago
  TSLA has a ton of retail investors, which definitely helps prop up the price, but there are definitely institutional investors as well. Everything is expensive these days, so one of the few ways to generate alpha is to buy the right 'priced to perfection' companies, and for some reason (that I personally can't comprehend) TSLA has a lot of savvy investors going long. That being said, the short interest on this stock is incredibly high, making it very pricy to bet against the company.
- adventured 9y ago
  Traditional retail investors can't push a stock to $55 billion. Institutional holders have ~60% of the stock. Fidelity, T Rowe Price, Vanguard, Blackrock, etc. Even the Bank of Montreal has a billion dollar position. Baillie Gifford of Edinburgh is sitting on a $4 billion position. Institutional holders picked up another ne three million shares last quarter.
akmarinov 9y ago
At the end of 2013, SpaceX had 50 contracts to launch stuff into space, worth about $4 billion. I'd imagine that they're doing way better now, seeing how they seriously undercut all other providers on price.

by bjl 9y ago

tuna-piano 9y ago

It's kind of weird. Their bond rating is pretty bad, but yet their stock market cap seems super high - 5x last years revenue (with profits of -2B). Of course, if there is risk to the bonds, that means the equity is even riskier. Are many sophisticated investors buying the stock or is it mainly retail investors who love the brand+man?

bjl 9y ago
TSLA has a ton of retail investors, which definitely helps prop up the price, but there are definitely institutional investors as well. Everything is expensive these days, so one of the few ways to generate alpha is to buy the right 'priced to perfection' companies, and for some reason (that I personally can't comprehend) TSLA has a lot of savvy investors going long. That being said, the short interest on this stock is incredibly high, making it very pricy to bet against the company.
adventured 9y ago
Traditional retail investors can't push a stock to $55 billion. Institutional holders have ~60% of the stock. Fidelity, T Rowe Price, Vanguard, Blackrock, etc. Even the Bank of Montreal has a billion dollar position. Baillie Gifford of Edinburgh is sitting on a $4 billion position. Institutional holders picked up another ne three million shares last quarter.

akmarinov 9y ago

At the end of 2013, SpaceX had 50 contracts to launch stuff into space, worth about $4 billion. I'd imagine that they're doing way better now, seeing how they seriously undercut all other providers on price.