4 ms·

You can't fight meme magic. Old skool investors don't understand this yet. They see Elon smoking pot and they short. They see him dancing, they short again. The

• rjkennedy98 7y ago
  I feel this is a very small part of it. There are many legitimate reasons to short Tesla, including execution problems, car maintenance support, increasing competition, their poor self-driving software. And it could go on and on. Tesla, lets face it, is a cult stock. If you believe in the valuation, that's fine, but there have been plenty of bubbles over the years and especially recently (bitcoin and weedstocks come to mind), and Tesla would not be the first item driven to loft valuations based on unrealistic expectations.
  • klhiouyert98 7y ago
    I think the recent bump is because (some) investors are starting to understand that CyberTruck will not be a flop as widely predicted on it's launch. Again, meme-magic. If the CyberTruck was unveiled by BMW or Ford, the response would have been much more muted.
  • jsight 7y ago
    > There are many legitimate reasons to short Tesla, including execution problems, car maintenance support, increasing competition, their poor self-driving software. The problem is that those issues are exaggerated for Tesla and understated for other makes. This leads to weird volatility with Tesla, IMO, and I think this latest exaggerated surge to a high valuation is a part of that. Execution problems? You mean like the delayed VW ID.3? These problems happen all the time. Reliability issues... hmm Ford had major transmission problems on the Focus, Honda had transmission problems on the Accord a few years back and Nissan has struggled with CVT issues for years. But these don't make the press all that much, because they are boring. But Cybertrucks and an occasional battery fire? Those are front page news, and each creates wild exaggerated swings. Overall the extra attention helps Tesla, of course.
    • rjkennedy98 7y ago
      > The problem is that those issues are exaggerated for Tesla and understated for other makes Execution problems doesn't mean bad cars, it means not delivering on margins, deliveries, ect. No one is saying Telsa is not a good company. They are saying that its not worth more than GM and Ford combined. I remember when I was investing in weedstocks when Canopy (who made no money) passed in valuation one of the largest banks in Canada who had a net income of like $11 billion. This feels the same way to me. Telsa's market cap is close to $100 billion. Tesla delivered ~1 million cars. It sells a very specialty product (luxury cars) to people who have the money and ability purchase and maintain such a car. Its a very niche product. GM on the other hand sold over 3 million cars in just China, and it has BETTER self driving tech than Telsa. Aside from that, there are a lot of people for whom a Telsa is just offlimits (such as people like myself who live in urban apartments), or people who don't have the money (such as most of the America and the world). Its not an $1k iPhone its a 40k luxury vehicle.
• aj7 7y ago
  In the long term, you can’t fight the balance sheet and income statement either. As in a Ponzi scheme, you simply run out of “greater fools.”