27 ms·
Tesla races past $100B in market valuation
- sillysaurusx 7y agoIf you're wondering what could possibly justify $100B, think in terms of "What if Tesla put all the other car companies out of business?" This isn't as unlikely as it seems: https://twitter.com/whyvert/status/1219288360096694273 https://twitter.com/whyvert/status/1219288360096694273 Trucking revenue was $700B in 2017. There's a lot of room to grow.
- shakopeeant 7y ago"This isn't as unlikely as it seems" In what fantasy world do you live in?
- nouveaux 7y agoParent cited a graph that demonstrates a lot of potential. Do you care to make an argument and cite any sources?
- anotherman554 7y agoNothing in the graph implied other car companies are going to go out of business.
- shuckles 7y agoThe issue is that to justify a $100B valuation at current revenues means that the standard of proof is "likely" and not "not unlikely."
- gowld 7y agoMeanwhile, Toyota and Honda sell 10 as many cars to the vast majority of people who will never be able to afford Teslas, and the cars work long-term. https://www.goodcarbadcar.net/2019-u-s-auto-sales-figures-by-brand/ https://www.goodcarbadcar.net/2019-u-s-auto-sales-figures-by... https://www.consumerreports.org/car-reliability-owner-satisfaction/tesla-model-3-loses-cr-recommendation-over-reliability-issues/ https://www.consumerreports.org/car-reliability-owner-satisf... > When the Model 3 first came out in 2017, Consumer Reports gave it an average predicted reliability score based on the survey results at the time about the Model S... The car maintained its average score for predicted reliability in October 2018... The new survey data shows that the car has dropped from average to below-average reliability. > The Tesla Model S lost CR’s recommendation in October 2018 largely because of suspension problems. > The Model X SUV has always had below-average reliability through its lifespan,
- sillysaurusx 7y agoFord’s autobiography is good. One thing I learned from it is that the trajectory of Ford matched Tesla’s. Ford started out making cars for the high end. No one wanted cars until they could win races. Then everybody wanted cars. Tesla is a luxury brand for now. Will it be in a decade? I wouldn’t take that bet.
- notJim 7y agoHe's comparing the most popular car from Tesla to some of the least-popular cars from the other manufacturers. Audi sold 200k cars in 2019, but they were SUVs, not sedans. I would guess the Model 3 sales will crater when the Model Y comes out.
- sillysaurusx 7y agoI wonder how we'd generate a fairer graph. Is the data available anywhere? (Ideally the raw data of sales by manufacturer bucketed by vehicle type.)
- nerdkid93 7y agoI for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening for quite some time.
- JohnJamesRambo 7y agoMaybe this is just what the top of bubbles feels like. I can’t explain the stock price either, other than human irrational exuberance.
- beamatronic 7y agoIs your taxi driver or your hairdresser talking about buying TSLA themselves? That’s how you know.
- daxorid 7y agoThere's also TA bots. Both algorithmic and human traders who will eschew a stock at $280 but consider it a buy at $430 because it crossed some magical technical level, without anything fundamental having changed about the underlying company. These traders tend to conduct the opposite of the value strategy, often buying all-time highs for no other reason than it hit an all time high.
- deleted 7y ago
- lowdose 7y agoIs Tesla using image recognition to make a driver profile of every number plate Tesla detects in the wild?
- TheGallopedHigh 7y agoWhy would they do that?
- lowdose 7y agoWould that be a big part of the solution to the self driving car puzzle?
- cma 7y agoSince they want to be their own insurance company it seems like it could be a valuable thing to have when pricing out a policy.
- beamatronic 7y agoThat’s genius. Create a risk profile for each identifiable vehicle.
- chasd00 7y ago
- totalZero 7y agoAll the people who had the balls to sell TSLA short have already gotten hurt in the come-up, and although everyone thinks this market as a whole is going to correct soon, nobody wants to take the risk of calling a top. So yeah, expect the name with 14%+ short interest to keep rallying in this market, for the near term. One thing I do wonder about is how the roll-off of tax credits will affect their US sales.
- erikpukinskis 7y agoGenerally the starting price for their lineup has gone down faster than the tax credits. That will only continue (Model Y and Cybertruck are even more price competitive in their segments than S, X, and 3) And there’s not much credit left, so I doubt it matters much.
- nabla9 7y agoIs there any hard data showing that someone significant amount of short selling is caused by speculation and it's not hedging? Short selling is used used as a hedge against downside risk of a long position. It's reasonable strategy for big investors who have huge stake on Tesla to short sell to manage the risk. >A "short sell against the box" is also known as "shorting against the box." Sellers use this technique when they do not actually want to close out their position on a stock. The strategy is generally used by investors who believe the stock is due for a fall in price, but do not wish to sell because they believe the fall is temporary and the stock will rebound quickly. https://www.investopedia.com/terms/s/sellagainstthebox.asp https://www.investopedia.com/terms/s/sellagainstthebox.asp
- daxorid 7y agoShort selling is used used as a hedge against downside risk of a long position Not accurate, assuming you're talking about the same stock. Shorting a stock is precisely equivalent to selling it, and your brokerage will always net them out. Perhaps you're thinking of OTM put options?
- nabla9 7y ago
- rb808 7y agoSo about the same as Ford, GM and FiatChrysler combined. Crazy times. Wow even Uber market cap is higher than each of those three. Feels like 1999.
- 0xB31B1B 7y agoWRT Uber, market seems to value recurring revenue streams higher than non recurring streams (ie average customer buys a new car every 7 years, likely from different manufacturers, but an Uber customer uses the product a few times per month). Auto makers could be valued more highly if they can sell subscriptions to something.
- ccheney 7y agoTesla recently started billing $10/mo for internet service[1] (might be at a break-even price). They've also started to release in-app DLC ($2k) that makes your car accelerate quicker[2] [1] https://www.tesla.com/support/connectivity https://www.tesla.com/support/connectivity [2] https://electrek.co/2019/12/18/tesla-acceleration-boost-upgrade-leaks-model-3/ https://electrek.co/2019/12/18/tesla-acceleration-boost-upgr...
- mediaman 7y agoMost of the major auto makers are trying to sell various tack-on services to get that ARR honey. Car-based internet is one of them. It's tough though: most people don't care about car based internet when their phone already has it. It doesn't feel like anyone has yet found a recurring revenue stream for vehicles that has met any actual demand.
- davidgould 7y agoI did not purchase the GM connectivity because it didn't provide any value, the features were lame or useless and it was no loss not having them after the trial period ended. The Tesla connectivity is really part of the whole car experience and I would probably be willing to pay quite a bit more, I was surprised by how reasonable the price was.
- maxdo 7y agoKey answer is margin , their margin is high , traditional Automakers - low . With things like cyber truck , the gap is getting bigger.
- alharith 7y agoMy speculation (and this is all speculation at the end of the day to some degree) is I also think the success of other companies impact each other, such as the recent successful SpaceX abort test. For homework one night I will run an analysis showing the rise and fall of Tesla and SpaceX stock over each other mapped to positive news. I am hypothesizing there is a correlation.
- coder1001 7y agoGiven the expected improvements in battery efficiency over time and the brand Tesla built for itself as THE company to buy from if you want an EV, I would say Tesla's best days are yet to come.
- muzika 7y agoSpot on.
- sjg007 7y agoI dunno. I want a Tesla as my next car and a lot of folks have said similarly. I am tired of getting gas every 2 weeks or so and I am really tired of oil changes. If I can charge at home and at work that seems to be just right. I'd probably still have a bigger gas family hauler but day to day a Tesla.
- karkisuni 7y agoUnless your commute is >50 miles one-way, there's no need to charge at work unless its incredibly convenient. I use a standard wall plug to charge my Model 3 at home and still I'm back to full in under 12 hours after work. If you want to bring that down to 2 hours, you can get an RV plug or a home EV charger installed. If there's always an open charger at work, go for it, but I think people still overestimate how often they'll need to charge.
- robinson43 7y agoThat's a great thread https://progardenreviews.com/best-self-propelled-lawn-mowers/ https://progardenreviews.com/best-self-propelled-lawn-mowers...
- yalogin 7y agoThe biggest advantage they have is their supercharging network. Every manufacturer is focusing on ADAS and electric cars but no one is focusing on the network. That is their biggest advantage and the only reason to buy a Tesla, granted their cars are great but without the network it’s just an expensive commute car.
- pretendscholar 7y agoSomething I've never understood is why you would want your auto manufacturer to own energy stations. Why wouldn't you just leave that up to the gas stations?
- dmannorreys 7y agoI have yet to see gas stations even attempt to establish the scale of charging infrastructure that Tesla is doing
- notJim 7y agoYou honestly don't want that, but if it's literally the only option (as it is today), it's a huge advantage.
- Dirlewanger 7y agoI have incredibly little faith in industries to establish standards nowadays. Every car manufacturer will eventually make their own charging network, all with their own proprietary connectors. Any aftermarket connector to try and work for all of them will be sued out of existence.
- Invictus0 7y agoAny manufacturer can tap into those, the charging patents were all released for free. The last thing the EV market needs is the balkanization of charger networks; it's all the same electricity.
- slipheen 7y agoIn the interests of public good, the US government ought to mandate a charging standard that all electric cars use, and force all charging stations to use that. You don't need to go to special BMW gas stations. In the same way we don't allow movie studios to own movie theaters anymore, we oughtn't allow car companies to own electrical charging stations.
- aynyc 7y agoI don't know how to value a stock, but after riding in my friend's Tesla a few times on road trips. I seriously doubt I'll buy a ICE car ever again unless for specific purposes (mini-van). I know 10 people who owns Tesla, the 6 or so friends I've spoken about it feel the same way as I do. If this keeps up, I think Tesla's stock price is under valued.
- agumonkey 7y agoThere have been a few news about EV vans. Also Van conversion have been going for quite a while, you see a few on youtube. I'm surprised nobody have made an EV model already..
- ssheth 7y agoThe Chryler Pacifica PHEV is basically a half EV van .. plugin hybrid with 30+ miles of electric-only range (with another 300-400 miles of hybrid/gas range) An all EV van would be great but this is closest you can come today.
- philosopher1234 7y agoI appreciate that you liked the experience, but since I have not had that experience, would you mind explaining what it is that made you feel so strongly about the car?
- aynyc 7y agoIt's really difficult to describe. The feeling of driving it is like the first time I rode my motorcycle on the highway. It was fear and excitement. The acceleration is unbelievable. It also has great visibility, much better than a lot of other sedans. With a family, I'm the designated driver, the car is incredibly quite. I can have a normal conversation with my daughter without her shouting. The list goes on. I honestly didn't think I would like the Tesla. But now my next car will be Tesla or a van. * The Tesla I rode in is the Model 3. My current car is a Subaru Outback.
- njarboe 7y ago
- andrewmcwatters 7y agoBook value, for reference, is closer to $32-ish dollars a share.
- deleted 7y ago[deleted]
- rvz 7y agoGiven that they previously had a surprise profit in the last quarter, there is also a degree of risk in what happens in the next quarter as they have been unprofitable for years despite huge revenues. Normally, I would stay away from throwing money at anything that is at an all time high (ATH) and would sell now or close to less than the ATH price at this point before it starts to dive with a wave of sellers.
- kgwgk 7y agoThe article doesn’t mention (or I’ve missed it) the short squeeze aspect which is definitely one of the drivers. https://investorplace.com/2020/01/play-tesla-stock-short-squeeze/ https://investorplace.com/2020/01/play-tesla-stock-short-squ...
- jansan 7y agoIn 2008 Volkswagen was the highest valuable company on the planet due to a massive short squeeze. Something similar seems to be happening right now with Tesla and it will be interesting to see who is on the losing side this time. In 2008 one German billionaire lost all his money and committed suicide.
- dougmany 7y agofrom that link: >“We are encouraged by Tesla’s execution and think it deserves to be among the world’s most valuable auto companies, and is perhaps the most important auto company in the world given its EV leadership. However, we think investors will be presented with more attractive opportunities to own the stock in the future,” Jonas said. It's that "opportunities to own the stock in the future part" that got me. People just want to own the stock. Tesla has gotten big enough so it is pretty unlikely to fail. Customers love the product, there are several "it is the future" features. People want to own a part of that. I don't think many people are selling because of that. Even if it is really expensive right now.
- kgwgk 7y ago> Tesla has gotten big enough so it is pretty unlikely to fail. Customers love the product, there are several "it is the future" features. People want to own a part of that. Wasn't that also true eight months ago? The stock was trading then at $180 rather than $590.
- grey-area 7y agoThe market is often irrational and inefficient.
- cestith 7y agoThis is near the market valuation on IBM. https://seekingalpha.com/article/4318281-ibm-turnaround-is https://seekingalpha.com/article/4318281-ibm-turnaround-is Watch for some adjustments when people take (legal or publicity) action over troublesome app and website design. https://twitter.com/tedstein/status/1144270122959417346 https://twitter.com/tedstein/status/1144270122959417346 https://twitter.com/tedstein/status/1219406746868953088 https://twitter.com/tedstein/status/1219406746868953088
- hnarn 7y agoBeyond the expected comments about Tesla being the iPod of the auto industry, I personally feel like these types of valuations during the beginning of an economical slowdown can be judged by the duck test. If it looks like a bubble, and sounds like a bubble, it will probably pop like a bubble. Unfortunately, most of the time this opinion will be grouped together with "Tesla haters", of which I'm definitely not one. I love Tesla and I want them to succeed, but runaway valuations based on hopes and dreams are normal in a bubble, and when you look around I see a lot more factors saying "yes" than those saying "no" when I wonder if this is another tech bubble or not. When valuations will level out though, noone knows.
- riantogo 7y agoWhat makes you think it is runaway valuation? And could that same reasoning be applied to Google, Amazon, Apple if we go back in time when they were just finding their footing? As someone who drives a model 3 on autopilot everyday I would say the stock is rather underpriced.
- heedlessly3 7y agoHow is Tesla worth more than Ford? Their F-150 alone outsells all Tesla models combined
- jansan 7y agoAs Steve Eisman said: "It's very hard to short a stock that's a cult ..."
- quantdev 7y agoFuture profitability is how equities are priced. Ford is expected to not be (very) profitable while Tesla is. Number of units sold is irrelevant.
- heedlessly3 7y agoTesla has a much greater chance of collapsing. Their operating and net incomes are negative. Meanwhile Ford is rolling in money.
- bryanlarsen 7y agoIt's not. Telsa's Enterprise Value is $108B, Ford's Enterprise Value is $153B.
- andys627 7y agoWorth =/= today's sales...
- jermaustin1 7y agoSpeculation, plain and simple. Some speculate, the F-series will not outsell all Tesla models combined in the future, and they all wanna get in on the ground floor. Before MoviePass collapsed into a burning pile of dog poop, there was a target price of $3000... Speculators love speculating. Side note - I bought $1000 of movie pass at $0.02. I never expected it to increase in value (which it hasn't, I'm sure), but I thought it was fun to say that I owned 0.5% of the available shares of a company.
- grey-area 7y ago
- nabla9 7y agoAll I see is verbal narratives that don't justify the price. Just saying that Tesla is good company, grows fast, has advantage, is not enough. Everything can be overvalued. Narratives without numbers are just as valid for $100B valuation as they are for $500B or $1 Trillion. Has any Tesla investor done the investor math justifying the price compared against SP500 Index Fund for 6% total return for example. Even if Tesla's revenue and profit margin equal Toyota 10 years from now, I can't see it being worth $100B today. Permanently higher product margins and no viable competition?
- Voloskaya 7y ago> Has any Tesla investor done the investor math justifying the price compared agaomst SP500 Index Fund for 6% total return for example. Come on, no one does this for any stock. No stock has a value exactly in-line with math would tell you. Stocks like Amazon have been completely overvalued (as compared to what math tells you) for close to 20 years. If you haven't yet learned that stock markets are based more around hype and emotions than math, don't invest.
- deleted 7y ago[deleted]
- grey-area 7y agoMany analysts have run the numbers. ARK Invest is an example of one bullish fund with open numbers - typically bears anticipate only ice auto revenue and margins and thus compare to Toyota say as you have, and bulls anticipate Tesla dominating multiple markets (EV, Domestic energy, RoboTaxis), and bringing battery costs down. Forecasting single stocks 5-10 years out is notoriously difficult though, so the range of opinions is not surprising. https://ark-invest.com/research/tesla-valuation-model https://ark-invest.com/research/tesla-valuation-model
- cedivad 7y agoI would just like to point out this is 75% of Bitcoin's market cap, and at this point I'm not sure what the bubble is anymore. Maybe both? Or maybe TSLA proves BTC's demand could have been genuine? Graph: https://twitter.com/cedivad/status/1220032154912088064 https://twitter.com/cedivad/status/1220032154912088064
- _ph_ 7y agoJust looking at the current revenue, the valuation of Tesla seems increadible high. But there are quite a few reasons for the optimism connected to Tesla. Tesla by a fair margin owns the market for electric cars. So anyone who thinks that electric cars are the future, should expect Tesla to do quite well. All big car companies are trying to keep up with Tesla in electric car tech and additionally, if the transition comes, are burdened with a lot of production facilities for ICE cars. Tesla is also much more than just cars, they have their own charging infrastructure, battery manufacturing, might play a big role in cell manufacturing going forward and are getting important in the energy sector, which might overtake the car business one day. Also, Tesla is growing exponentially. This gives a lot of growth fantasy, that they might get to the size of Amazon one day, which would mean a multiple of stock value compared today. But most importantly, and that is the reason they have such a strong support amongst their current and potential customers: they keep innovating. A bit like Apple of the old, if they announce a new product, prepare to see something really new. While traditional car manufacturers keep iterating on their products, Tesla has completely new things, just think of the Cybertruck. Which other car annoucement got that much press coverage as the Cybertruck? Also, the Semi could get huge. There are also some very technical factors driving the recent raise of the stock: there have been quite a few good, if not great news (Q4 sales numbers, Gigafactory 3 operating within 1 year of the building start, Gigafactory 4 planned). Then there is still a huge amount of stock shorted, so while it not might be a full short squeeze, the shorts need to cover the stocks they shorted. Finally, Tesla might join the S&P 500, which means, that a lot of institutions have to buy Tesla stock, which will drive it up further, at least short-time.
- omegant 7y agoThe valuation started climbing the second half of the year after the good production and sales numbers were published. But it had already plateaud, then the China megafactory presentation happened and the little dance that Elon made, seemed to help grab some attention there. This is enterely my (completely ignorant) guess, but it wouldn’t surprise me in the least, if most of the recent shares buyers were chinese. Is there any way to look were the buy orders are coming from?
- dcchambers 7y agoI am ready for an electric vehicle - but I can't get over how much I dislike the interior of the Model 3 and Y. I hate the single-giant-touchscreen interface they have settled on. I get it, it's cheap for them to produce and it looks 'futuristic.' I firmly believe physical knobs and buttons are better for most things in a car. The Model S and Model X are better, but they're pretty much out of my price range. I also want a proper SUV/truck - the Model X/Y don't cut it, and don't get me started on the cybertruck...
- _Microft 7y agoI'm convinced that the Model 3 interior is already designed for a self-driving future. The screen is meant to show movies not gauges.
- dstaley 7y agoFWIW, Tesla has been incredibly clear that yes, the Model 3 and Model Y are designed for a self-driving future. They even made sure that they could easily remove the steering wheel and replace it with a cover.
- dcchambers 7y agoI agre with you - but after seeing the progress of self-driving vehicles over the last few years, I think we're still many years away from 100% hands-off, sleep-in-the-back-seat self-driving vehicles. It's been a very quick ramp up to 90% self-driving capability, but the last 10% is going to take a lot longer than people realize.
- smiley1437 7y agoI'll bite - what is it about the Cybertruck that doesn't cut it as a truck for you?
- dcchambers 7y ago- It's the ugliest truck I've ever seen (you can argue that's subjective, sure, but that's my opinion and you asked). I hate the asthetic. It looks like a vehicle from a video game in the N64 era. - The sloped sides of the bed make it impractical for loading stuff in/out. - Have to go to the most expensive tri-motor option to get the most range. Towing capacity on dual-motor is also lower than I would like. - Won't ever see production in its current form anyway because certain features aren't legal/probably never will be. Crumple zones exist for a reason - it's not a good idea to send everyone out there on public roads in a tank with a regular driver license. - Tesla also compares it to other 1/2 Ton pickups (F-150, Silverado 1500, etc) but it's almost certainly in the next class up, the 3/4 Ton F-250, 2500, etc based on its weight, size, and price. When you compare it to those vehicles the capabilities are much less impressive. -- Don't take my complaints the wrong way. I do want a Tesla Truck. I just don't want this Tesla Truck. Give me one that has the style of the Rivian and I'm in. https://rivian.com/r1t/ https://rivian.com/r1t/
- Proven 7y agoI shorted NASDAQ today because of these jokers
- SergeAx 7y agoIf you check out some of the automotive AI companies, you will see half a dozen names like Nuro, Aurora, Momenta, TuSimple, Pony, Zoox. There are more in the neigbourhood with tech like lidars, computer vision and so on. Those companies has literally NOTHING beyond software and early prototypes, but they still are valued at billions of dollars each. So, compared to them, what should be a valuation of a profitable company with large scale production, foothold in China, massive and ever growing real life datasets and so on and so on?
- JohnJamesRambo 7y agoProbably less than the combined valuation of GM and Ford when each sells an order of magnitude more cars than Tesla. https://www.goodcarbadcar.net/2019-u-s-auto-sales-figures-by-brand/ https://www.goodcarbadcar.net/2019-u-s-auto-sales-figures-by... Even if we consider that a stock valuation indicates what we THINK a company might be worth in the far far future it doesn’t make sense.
- SergeAx 7y agoThis is exactly my point: you are valuing TSLA as a car maker, and I along with the market prefer to value it as tech company.
- JohnJamesRambo 7y agoWhat is tech about it? Cars and batteries aren’t software you can easily make endless clones of and sell over and over again.
- SergeAx 7y agoActually, lot of Tesla cars is software, it is wastly superior to anything on the market right now, and it is worth to mention they are updating it quite frequently. Also there are datasets, like I said.
- deleted 7y ago[deleted]
- richycaat 7y agoI think it's great more technology will come from it