8 ms·

I have been a longtime bull, but their stock value is now up over 140% in the last 3 months and I can't say I fully understand why.

by slg 7y ago

sergiomattei 7y ago
Stocks sometimes aren't rational. It's just speculation/hype.
- mikorym 7y ago
  I agree with your statement, but maybe it's more accurate to say its speculation/hype about future return on investment. I think the real question (for me at least) is whether that return on investment is in share price increase (like Amazon) or in dividends and the value of assets (like the majority of other public companies).
  - AtlasBarfed 7y ago
    India and China have to go full electric or global warming will be insane. You're talking 3 billion people that all want cars.
- rdlecler1 7y ago
  Most people are not very good at looking into the future. People are may be making rational decisions off of poor estimations (both up and down).
runawaybottle 7y ago
Short squeeze I think.
- hw 7y ago
  this. It's still one of the most, if not the most shorted stock. As long as people keep shorting, the squeezes will keep propelling the stock higher, regardless of fundamentals. 1 week ago you might think it's overvalued and the meltup's run its course, but look where it's at AH today.
- xkjkls 7y ago
  There still is billions of dollars short this company. Not that much has changed
  - zaroth 7y ago
    > Not that much has changed The short interest has declined from a high of ~44 million shares in mid-May last year to about 25 million shares currently, which is currently 18.7% of float. [1] - https://twitter.com/ihors3/status/1222630157535588352/photo/1 https://twitter.com/ihors3/status/1222630157535588352/photo/...
kccqzy 7y ago
My understanding is the market's optimism when the Shanghai completed in record time and began assembling for the Chinese market. But then again, with the coronavirus fears in China, both production and sales could very well be negatively impacted, yet that's not really reflected in the market.
deleted 7y ago
[deleted]
stellar678 7y ago
I dunno. My bullish view has more to do with Tesla using the vehicle market as an entry point to the broader energy market. If the Tesla cars start throwing off profit and make the company self-sustaining, their vertically-integrated energy thing opens the kind of insanely huge global energy market. They're not just going to eat Ford's lunch - but also Chevron, Saudi Aramco and your local energy company.
- wcarron 7y ago
  I wouldn't hold your breath on that.
  - stellar678 7y ago
    I was actually expecting a pretty big drop today given the huge recent runup, so it's fair to say that my breath is not held. But it's the long term I care about, and I'm fairly confident that Tesla is well-positioned for the direction things are headed. Electricity (and solar in particular) - Continually reducing production costs on a resource that is unlimited, at least from the perspective of our planet. Fossil fuels - Continually increasing costs as resources are depleted and externalities are accounted for. I guess you can tell where my chips are. :-)
    - xkjkls 7y ago
      Tesla’s Solar deployments declined YoY as their recent report indicated
- fred_is_fred 7y ago
  I'm curious how you see Tesla as "vertically integrated energy" company. You mean Tesla is going to run power plants and transmission lines? Both are highly regulated, including the price you can charge, with a very low profit margin in most cases, not sure Musk would be a fan.
  - stellar678 7y ago
    I agree that Tesla is unlikely to be interested in playing directly in a tightly regulated market as a utility. But they are happy to sell solar and storage to utilities, to the extent that power grids still provide useful services. (And I definitely believe they do...) See: https://www.tesla.com/utilities https://www.tesla.com/utilities I also think that consumer 'behind the meter' solar generation and battery (or other) storage tech will also capture a lot of value that goes to utilities right now.
csomar 7y ago
People shorted the stock expecting the company and Elon will go under. They didn't go under and this Q4 despite not being spectacular in any number is "beating the market expectations" because the market expected the company not to continue operations.
- adventured 7y ago
  > because the market expected the company not to continue operations. The market did not expect the company to cease operations and that was particularly not the expectations baked into this quarterly result (the bar Tesla had to jump over this quarter). A small group of agitator shorts pushed that narrative, which very little of the market actually believed as witnessed by Tesla's persistently outsized market value (pre rally it was still worth more than Ford). Companies the size of Tesla don't trade with $40-$50 billion market caps when the market actually thinks they're going to stop operating soon.
- xkjkls 7y ago
  No? The market expectations were a EPS if 1.76 this quarter. Tesla best that, but acting like the market expected them to go under is ridiculous. At the beginning of 2019, the Wall Street consensus was a profit of close to $400 million for the year. They lost $800 million.
qaq 7y ago
Shorts got squeezed?
heisenbergs 7y ago
simple back of the envelope calculation: in 3 years time, they will have 3 giga factories (+1 in upstate new york), each of which should be scale to 500k cars. at an average resale price of $50k (might be a little lower, but let's keep it simple), that's $75B in revenue. at a 10% profit margin, that's $7.5B profit. let's presume a 20x factor as a growth stock, you have an evaluation of $150B, which it's currently trending to. This is excluding any other growth opportunities (self driving, solar, battery storage, drive train). just plain car sales...
- saghm 7y ago
  This also assumes that there's demand for all of these $50,000 cars, which isn't necessarily the case.
  - lazyjones 7y ago
    I'm sure there is, if you consider all the climate politics ramping up. Politicians, officials, other virtue signallers will prefer to be seen in EV soon.
  - JeffL 7y ago
    So far, it seems that Teslas are so great that they sell themselves. The more Teslas on the road, the more demand gets created for Teslas as more and more people are exposed to them.
  - mitchellgoffpc 7y ago
    The base Model 3 costs $40k in the US, and even without any extra options at all, it’s a great car to drive IMO! (Although it IS a lot more expensive in foreign markets)
  - joshualross 7y ago
    Currently, the demand is still strong enough that the wait time on a new TM3 is 4-8 weeks. That may decrease, but right now Tesla can't make them fast enough.
    - 7y ago
vb6sp6 7y ago
cybertruck
lazyjones 7y ago
Same here. Perhaps it's Chinese investors getting on the bandwagon, perhaps the short squeeze, or even an attempt by someone to get a significant chunk of Tesla for strategic reasons. It's futile to try to come up with any scenario where this could be considered a reasonable valuation by traditional standards, I tried.
mitchellgoffpc 7y ago
Well, short interest in Tesla has decreased significantly over the past six months, from over 40% of the float in June 2019, to under 20% in December 2019. As more and more short sellers choose (or are forced) to close their positions, they drive the value of the stock higher and make it harder for other shorts to maintain their positions. With 20% of the float still sold short, I personally don’t think $TSLA has hit its peak yet, although the stock price will probably recede as short interest approaches normal levels (1-2% of the float)
- xkjkls 7y ago
  If they are still a company still trading at the multiples they are, short interest is never going to be 1-2%
  - mitchellgoffpc 7y ago
    Yeah probably true, I did say “approaches” though! My guess is that short interest will eventually drop below 5% over the next couple years if Tesla continues to perform well and grow their revenue stream, but we’ll see.
xkjkls 7y ago
It’s inexplicable. They aren’t even beating the estimates they have put in front of them.
ryuukk_ 7y ago
state manipulation tesla is a deep state weapon against EU/Asia so yeah, fuck tesla, and fuck the USA
m463 7y ago
I think the cybertruck announcement caught the attention of a lot of "normal" people. I remember years ago reading that although the "please don't squeeze the charmin" commercials were annoying, people remembered the name. Maybe a really weird truck announcement works the same. Or it could be that "normal" people are starting to see model 3s showing up (outside of california for once)
- taneq 7y ago
  I'd never seen that before and it's brilliant. Advertising isn't meant to be unobtrusive and transparent like software. It needs to be attention-grabbing and memorable in order to work.

I have been a longtime bull, but their stock value is now up over 140% in the last 3 months and I can't say I fully understand why.

by slg 7y ago

I have been a longtime bull, but their stock value is now up over 140% in the last 3 months and I can't say I fully understand why.

sergiomattei 7y ago

Stocks sometimes aren't rational. It's just speculation/hype.

mikorym 7y ago
I agree with your statement, but maybe it's more accurate to say its speculation/hype about future return on investment. I think the real question (for me at least) is whether that return on investment is in share price increase (like Amazon) or in dividends and the value of assets (like the majority of other public companies).
- AtlasBarfed 7y ago
  India and China have to go full electric or global warming will be insane. You're talking 3 billion people that all want cars.
rdlecler1 7y ago
Most people are not very good at looking into the future. People are may be making rational decisions off of poor estimations (both up and down).

runawaybottle 7y ago

Short squeeze I think.

hw 7y ago
this. It's still one of the most, if not the most shorted stock. As long as people keep shorting, the squeezes will keep propelling the stock higher, regardless of fundamentals. 1 week ago you might think it's overvalued and the meltup's run its course, but look where it's at AH today.
xkjkls 7y ago
There still is billions of dollars short this company. Not that much has changed
- zaroth 7y ago
  > Not that much has changed The short interest has declined from a high of ~44 million shares in mid-May last year to about 25 million shares currently, which is currently 18.7% of float. [1] - https://twitter.com/ihors3/status/1222630157535588352/photo/1 https://twitter.com/ihors3/status/1222630157535588352/photo/...

kccqzy 7y ago

My understanding is the market's optimism when the Shanghai completed in record time and began assembling for the Chinese market. But then again, with the coronavirus fears in China, both production and sales could very well be negatively impacted, yet that's not really reflected in the market.

deleted 7y ago

[deleted]

stellar678 7y ago

I dunno. My bullish view has more to do with Tesla using the vehicle market as an entry point to the broader energy market. If the Tesla cars start throwing off profit and make the company self-sustaining, their vertically-integrated energy thing opens the kind of insanely huge global energy market. They're not just going to eat Ford's lunch - but also Chevron, Saudi Aramco and your local energy company.

wcarron 7y ago
I wouldn't hold your breath on that.
- stellar678 7y ago
  I was actually expecting a pretty big drop today given the huge recent runup, so it's fair to say that my breath is not held. But it's the long term I care about, and I'm fairly confident that Tesla is well-positioned for the direction things are headed. Electricity (and solar in particular) - Continually reducing production costs on a resource that is unlimited, at least from the perspective of our planet. Fossil fuels - Continually increasing costs as resources are depleted and externalities are accounted for. I guess you can tell where my chips are. :-)
  - xkjkls 7y ago
    Tesla’s Solar deployments declined YoY as their recent report indicated
fred_is_fred 7y ago
I'm curious how you see Tesla as "vertically integrated energy" company. You mean Tesla is going to run power plants and transmission lines? Both are highly regulated, including the price you can charge, with a very low profit margin in most cases, not sure Musk would be a fan.
- stellar678 7y ago
  I agree that Tesla is unlikely to be interested in playing directly in a tightly regulated market as a utility. But they are happy to sell solar and storage to utilities, to the extent that power grids still provide useful services. (And I definitely believe they do...) See: https://www.tesla.com/utilities https://www.tesla.com/utilities I also think that consumer 'behind the meter' solar generation and battery (or other) storage tech will also capture a lot of value that goes to utilities right now.

csomar 7y ago

People shorted the stock expecting the company and Elon will go under. They didn't go under and this Q4 despite not being spectacular in any number is "beating the market expectations" because the market expected the company not to continue operations.

adventured 7y ago
> because the market expected the company not to continue operations. The market did not expect the company to cease operations and that was particularly not the expectations baked into this quarterly result (the bar Tesla had to jump over this quarter). A small group of agitator shorts pushed that narrative, which very little of the market actually believed as witnessed by Tesla's persistently outsized market value (pre rally it was still worth more than Ford). Companies the size of Tesla don't trade with $40-$50 billion market caps when the market actually thinks they're going to stop operating soon.
xkjkls 7y ago
No? The market expectations were a EPS if 1.76 this quarter. Tesla best that, but acting like the market expected them to go under is ridiculous. At the beginning of 2019, the Wall Street consensus was a profit of close to $400 million for the year. They lost $800 million.

qaq 7y ago

Shorts got squeezed?

heisenbergs 7y ago

simple back of the envelope calculation: in 3 years time, they will have 3 giga factories (+1 in upstate new york), each of which should be scale to 500k cars. at an average resale price of $50k (might be a little lower, but let's keep it simple), that's $75B in revenue. at a 10% profit margin, that's $7.5B profit. let's presume a 20x factor as a growth stock, you have an evaluation of $150B, which it's currently trending to. This is excluding any other growth opportunities (self driving, solar, battery storage, drive train). just plain car sales...

saghm 7y ago
This also assumes that there's demand for all of these $50,000 cars, which isn't necessarily the case.
- lazyjones 7y ago
  I'm sure there is, if you consider all the climate politics ramping up. Politicians, officials, other virtue signallers will prefer to be seen in EV soon.
- JeffL 7y ago
  So far, it seems that Teslas are so great that they sell themselves. The more Teslas on the road, the more demand gets created for Teslas as more and more people are exposed to them.
- mitchellgoffpc 7y ago
  The base Model 3 costs $40k in the US, and even without any extra options at all, it’s a great car to drive IMO! (Although it IS a lot more expensive in foreign markets)
- joshualross 7y ago
  Currently, the demand is still strong enough that the wait time on a new TM3 is 4-8 weeks. That may decrease, but right now Tesla can't make them fast enough.
  - 7y ago

vb6sp6 7y ago

cybertruck

lazyjones 7y ago

Same here. Perhaps it's Chinese investors getting on the bandwagon, perhaps the short squeeze, or even an attempt by someone to get a significant chunk of Tesla for strategic reasons. It's futile to try to come up with any scenario where this could be considered a reasonable valuation by traditional standards, I tried.

mitchellgoffpc 7y ago

Well, short interest in Tesla has decreased significantly over the past six months, from over 40% of the float in June 2019, to under 20% in December 2019. As more and more short sellers choose (or are forced) to close their positions, they drive the value of the stock higher and make it harder for other shorts to maintain their positions. With 20% of the float still sold short, I personally don’t think $TSLA has hit its peak yet, although the stock price will probably recede as short interest approaches normal levels (1-2% of the float)

xkjkls 7y ago
If they are still a company still trading at the multiples they are, short interest is never going to be 1-2%
- mitchellgoffpc 7y ago
  Yeah probably true, I did say “approaches” though! My guess is that short interest will eventually drop below 5% over the next couple years if Tesla continues to perform well and grow their revenue stream, but we’ll see.

xkjkls 7y ago

It’s inexplicable. They aren’t even beating the estimates they have put in front of them.

ryuukk_ 7y ago

state manipulation tesla is a deep state weapon against EU/Asia so yeah, fuck tesla, and fuck the USA

m463 7y ago

I think the cybertruck announcement caught the attention of a lot of "normal" people. I remember years ago reading that although the "please don't squeeze the charmin" commercials were annoying, people remembered the name. Maybe a really weird truck announcement works the same. Or it could be that "normal" people are starting to see model 3s showing up (outside of california for once)

taneq 7y ago
I'd never seen that before and it's brilliant. Advertising isn't meant to be unobtrusive and transparent like software. It needs to be attention-grabbing and memorable in order to work.