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I don't think you'll find a financially literate person who'll agree with the statement "Tesla's current $50B market cap in 2018 is fair given their current fin

I don't think you'll find a financially literate person who'll agree with the statement "Tesla's current $50B market cap in 2018 is fair given their current financial situation". Of course it doesn't make sense, nobody, neither Musk, bulls or bears believe that statement. Tesla's current price has high expectations built into the price, so the game is that Musk and the bulls have to demonstrate that they're meeting those expectations, while the bears have to portray everything as a failure. Unlike normal companies though, there are A LOT of bears and they have a shit-ton of money riding on Tesla stumbling and they will go to absurd, surreal lengths. I mean, in what reality is "Mid-level Executive Takes Vacation" a major news story?![1] And no, there can in fact be a far better quote, because it doesn't even begin to describe the upside of Tesla, even though they have plainly stated their intentions to pursue those upsides. They're merely comparing them to Ford (same market cap), but Ford does not: - Intend to take on Uber - Intend to compete on price with rail cargo shipping - Intend to make and sell batteries. [1] https://www.wsj.com/articles/teslas-engineering-chief-takes-leave-of-absence-at-pivotal-moment-1526082594 https://www.wsj.com/articles/teslas-engineering-chief-takes-...

davrosthedalek 8y ago
How does "taking on Uber", which currently has problems by its own and is not profitable either, help?
- martythemaniak 8y ago
  Well, Uber is worth something, or rather, "Ride Sharing Company" is worth something. We don't have to agree (or discuss) what that number is, as long as we agree that it's not trivial (say, in the 10s of billions). If Tesla executes on its plan and are successful, they will have some percentage of that business and their market cap will then become justified on financials, rather than expectations as it is today. So yeah, they have stated their intentions simply and plainly. If they succeed, they're price will be justified and could grow. Which side of the story you choose to believe is up to you, but that's true of any growing company.
  - davrosthedalek 8y ago
    I see what you mean, but I think the problem is kind of self-referential: Uber has this value (as a ride-sharing company) because the bulls believe that it sometimes will be highly profitable and can defend it's position. If Tesla can take on Uber, Uber did not defend it's position, and much of that value will go away. Not sure there would be 10s of billions left. How many people are there that Tesla could defend it's position in that market, if uber couldn't against Tesla? Or in other words: Those people who value Tesla higher because of their ride-share potential, should at the same time rate Uber lower.
    - martythemaniak 8y ago
      That's right, although what position you take on the market also depends on what you're after. To go all-in on Tesla, you have to believe that LIDAR is a crutch and that Level 4 autonomy is possible with primarily visual sensors. Or maybe you're not so sure and want something safer / lower return. In that case, you'd buy into both of them, say 50-50. If one goes bust, but the other goes 5x, you're still good. In reality, you can't buy into Uber, so it's largely theoretical. Also, Waymo and GM are vying for the same market and they all have different strategies - ie Alphanet will finance Waymo's fleet with Google's earnings, while Tesla will finance theirs with their customer's money (and share the profits). Hard to say what will happen.

davrosthedalek 8y ago

How does "taking on Uber", which currently has problems by its own and is not profitable either, help?

martythemaniak 8y ago
Well, Uber is worth something, or rather, "Ride Sharing Company" is worth something. We don't have to agree (or discuss) what that number is, as long as we agree that it's not trivial (say, in the 10s of billions). If Tesla executes on its plan and are successful, they will have some percentage of that business and their market cap will then become justified on financials, rather than expectations as it is today. So yeah, they have stated their intentions simply and plainly. If they succeed, they're price will be justified and could grow. Which side of the story you choose to believe is up to you, but that's true of any growing company.
- davrosthedalek 8y ago
  I see what you mean, but I think the problem is kind of self-referential: Uber has this value (as a ride-sharing company) because the bulls believe that it sometimes will be highly profitable and can defend it's position. If Tesla can take on Uber, Uber did not defend it's position, and much of that value will go away. Not sure there would be 10s of billions left. How many people are there that Tesla could defend it's position in that market, if uber couldn't against Tesla? Or in other words: Those people who value Tesla higher because of their ride-share potential, should at the same time rate Uber lower.
  - martythemaniak 8y ago
    That's right, although what position you take on the market also depends on what you're after. To go all-in on Tesla, you have to believe that LIDAR is a crutch and that Level 4 autonomy is possible with primarily visual sensors. Or maybe you're not so sure and want something safer / lower return. In that case, you'd buy into both of them, say 50-50. If one goes bust, but the other goes 5x, you're still good. In reality, you can't buy into Uber, so it's largely theoretical. Also, Waymo and GM are vying for the same market and they all have different strategies - ie Alphanet will finance Waymo's fleet with Google's earnings, while Tesla will finance theirs with their customer's money (and share the profits). Hard to say what will happen.