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Who else feels like the TSLA price is a gigantic bubble at this point? Not that it's not valuable or worthy of some of the growth it's seen, but almost 10x in o

by rocgf 6y ago

Who else feels like the TSLA price is a gigantic bubble at this point? Not that it's not valuable or worthy of some of the growth it's seen, but almost 10x in one year looks like a classic bubble to me. LE: Also, I don't really understand how people keep falling for this stuff. I have no doubt that some are very well aware that it's a bubble and just think they can time the crash correctly, but I see _a lot_ of people with incredibly bullish views on this. And to be honest, it's the same with Bitcoin.

fullshark 6y ago
A ton of short sellers that have so far lost that bet handily.
- insert_coin 6y ago
  It's a bubble for a reason, you can't short sell you can only watch it pop.
- dhruvarora013 6y ago
  Just because something hasn't happened yet, doesn't mean it will never happen. Tesla is doing extremely well and has a bright future but it's hard to make a solid argument for its current valuation.
  - fullshark 6y ago
    Yeah i didn't mean to imply that the bubble assertion was false, merely point out that a ton of people also think it's a bubble (and have for years), and so far have paid a huge price for that bet.
- shiftpgdn 6y ago
  The market can remain irrational far longer than you can maintain liquidity.
- virgilp 6y ago
  "The market can stay irrational longer than you can stay solvent". This is nothing new. I love Tesla but when even Musk himself looks at the stock price and tweets "LOL, stonks", you know something must be off.
tenpies 6y ago
The fascinating thing to me is that if you bring Tesla valuation up the response is "lol dumb short seller, prepare to lose another X billion this year!". Tesla's most valuable product definitely isn't anything made in a factory or produced by their programmers, it's the financial cult that has amassed around it. It's people who are putting every penny of their money on Tesla calls and spending every hour of their day making sure to spread the good news of Tesla and metaphorically stoning anyone who dares speak against Elon Musk. This will almost certainly not end well at some point, especially since the valuation exceeds even a scenario where Tesla becomes a global monopoly in a number of industries. How long will it take for the cult to realize this? Maybe never.
- mehrdada 6y ago
  > making sure to spread the good news of Tesla and metaphorically stoning anyone who dares speak against Elon Musk. That's an interesting take. Even if true today, does not reflect the historical reality at all; in fact I remember quite the opposite: for the majority of the history of the company I remember hearing that he is a clown, Tesla will go bankrupt, the product won't work, false stories on the product by major newspapers, the product won't make money, the factory won't scale.
  - new_realist 6y ago
    Elon is a clown; sued for libel and by the SEC; Elon has admitted the company was weeks away from bankruptcy during Model 3 development; my Tesla was a lemon, Tesla makes almost all of its profits from regulatory credits; 500K production was only achieved by creating a second factory (not part of the original 500K projection); the Gigafactory is only 30% done and Tesla has abandoned it in favor of expansion with third party battery manufacturers. So, in all, pretty accurate.
    - mehrdada 6y ago
      Point is there is (or at least was as of 1.5 years ago) way more negative coverage of Tesla than positive, accuracy aside, which contradicts GP's take. There's been enough outlets to show the bad side and it was the most shorted stock which proves the point.
modeless 6y ago
The craziest thing is that TSLA was in an anti-bubble just 2 years ago, with the price clearly suppressed far below a reasonable valuation. Now it's even farther from reasonable. Something about TSLA just makes people lose their minds in both directions.
samfisher83 6y ago
Amazon has been priced at 100p/e for like 20 years. Tesla is at 1000+ but markets can price things at high ratios for a while.
- peteradio 6y ago
  Amazon is arguably operating very anti-competitively. That justifies the p/e. What could possibly justify 1000+ for Tesla? Its like the zombie towers in world war z, just pure brainless masses of dummmm money.
deleted 6y ago
[deleted]
tempsy 6y ago
We are going to live in a low rate world for a long, long time. Cheap money means time horizons get expanded. This is the perfect environment for "moonshot" stocks because investors don't care if you say it'll take 8 years to make your first dollar (looking at you, QuantumScape)
tim333 6y ago
I remember Musk tweeting that the price was too high back in May when it was a fraction of what it is now. (https://www.cnbc.com/2020/05/01/tesla-ceo-elon-musk-says-stock-price-is-too-high-shares-fall.html https://www.cnbc.com/2020/05/01/tesla-ceo-elon-musk-says-sto...)
disown 6y ago
> Who else feels like the TSLA price is a gigantic bubble at this point? It's close to being a TRILLION dollar company. Think about it. It's so mindboggling. But then again, I felt that amazon was a gigantic bubble forever too. I've said it before and I'll say it again: at this point tesla is going to be spectacular one way or another. It's been bid up to such an extreme degree that it can't tread water. So in 2030, we'll look back and be amazed at what Tesla has become no matter what.
gumby 6y ago
> Who else feels like the TSLA price is a gigantic bubble at this point? Not that it's not valuable or worthy of some of the growth it's seen, but It's a classic "there will be a greater fool down the road" theory, like the tech companies that proclaim they will never issue a dividend (in which case the only reason for buying the stock is that you believe someone else will buy it later). The correction will be painful for all concerned. An overlarge market cap isn't really that great. Sure, for a while you can raise capital extremely cheaply and that's nothing to sneer at! But it leaves a couple of problems: when it's big it's harder for it to grow, while a smaller mkt cap leaves more room for growth. And people are buying growth. The other problem is that it traps the leadership. 20 years ago when Time Warner bought AoL there was much discussion in the press about the various business logic/synergies (or lack thereof) between the two businesses. But really the primary motivation seemed much simpler: the only way that Steve Case could retire (without cratering the stock price) was to sell/merge the company into another entity of at least similar size. Tesla can't merge with any car company, or many other companies for that matter. As for the shorts: A couple of years ago my kid worked for a billionaire with whom he remains friendly. The other day he joked to me, "My greatest respect for XXX is that he is the only person I know who has made money shorting Tesla"

by rocgf 6y ago

fullshark 6y ago

A ton of short sellers that have so far lost that bet handily.

insert_coin 6y ago
It's a bubble for a reason, you can't short sell you can only watch it pop.
dhruvarora013 6y ago
Just because something hasn't happened yet, doesn't mean it will never happen. Tesla is doing extremely well and has a bright future but it's hard to make a solid argument for its current valuation.
- fullshark 6y ago
  Yeah i didn't mean to imply that the bubble assertion was false, merely point out that a ton of people also think it's a bubble (and have for years), and so far have paid a huge price for that bet.
shiftpgdn 6y ago
The market can remain irrational far longer than you can maintain liquidity.
virgilp 6y ago
"The market can stay irrational longer than you can stay solvent". This is nothing new. I love Tesla but when even Musk himself looks at the stock price and tweets "LOL, stonks", you know something must be off.

tenpies 6y ago

The fascinating thing to me is that if you bring Tesla valuation up the response is "lol dumb short seller, prepare to lose another X billion this year!". Tesla's most valuable product definitely isn't anything made in a factory or produced by their programmers, it's the financial cult that has amassed around it. It's people who are putting every penny of their money on Tesla calls and spending every hour of their day making sure to spread the good news of Tesla and metaphorically stoning anyone who dares speak against Elon Musk. This will almost certainly not end well at some point, especially since the valuation exceeds even a scenario where Tesla becomes a global monopoly in a number of industries. How long will it take for the cult to realize this? Maybe never.

mehrdada 6y ago
> making sure to spread the good news of Tesla and metaphorically stoning anyone who dares speak against Elon Musk. That's an interesting take. Even if true today, does not reflect the historical reality at all; in fact I remember quite the opposite: for the majority of the history of the company I remember hearing that he is a clown, Tesla will go bankrupt, the product won't work, false stories on the product by major newspapers, the product won't make money, the factory won't scale.
- new_realist 6y ago
  Elon is a clown; sued for libel and by the SEC; Elon has admitted the company was weeks away from bankruptcy during Model 3 development; my Tesla was a lemon, Tesla makes almost all of its profits from regulatory credits; 500K production was only achieved by creating a second factory (not part of the original 500K projection); the Gigafactory is only 30% done and Tesla has abandoned it in favor of expansion with third party battery manufacturers. So, in all, pretty accurate.
  - mehrdada 6y ago
    Point is there is (or at least was as of 1.5 years ago) way more negative coverage of Tesla than positive, accuracy aside, which contradicts GP's take. There's been enough outlets to show the bad side and it was the most shorted stock which proves the point.

modeless 6y ago

The craziest thing is that TSLA was in an anti-bubble just 2 years ago, with the price clearly suppressed far below a reasonable valuation. Now it's even farther from reasonable. Something about TSLA just makes people lose their minds in both directions.

samfisher83 6y ago

Amazon has been priced at 100p/e for like 20 years. Tesla is at 1000+ but markets can price things at high ratios for a while.

peteradio 6y ago
Amazon is arguably operating very anti-competitively. That justifies the p/e. What could possibly justify 1000+ for Tesla? Its like the zombie towers in world war z, just pure brainless masses of dummmm money.

deleted 6y ago

[deleted]

tempsy 6y ago

We are going to live in a low rate world for a long, long time. Cheap money means time horizons get expanded. This is the perfect environment for "moonshot" stocks because investors don't care if you say it'll take 8 years to make your first dollar (looking at you, QuantumScape)

tim333 6y ago

I remember Musk tweeting that the price was too high back in May when it was a fraction of what it is now. (https://www.cnbc.com/2020/05/01/tesla-ceo-elon-musk-says-stock-price-is-too-high-shares-fall.html https://www.cnbc.com/2020/05/01/tesla-ceo-elon-musk-says-sto...)

disown 6y ago

> Who else feels like the TSLA price is a gigantic bubble at this point? It's close to being a TRILLION dollar company. Think about it. It's so mindboggling. But then again, I felt that amazon was a gigantic bubble forever too. I've said it before and I'll say it again: at this point tesla is going to be spectacular one way or another. It's been bid up to such an extreme degree that it can't tread water. So in 2030, we'll look back and be amazed at what Tesla has become no matter what.

gumby 6y ago

> Who else feels like the TSLA price is a gigantic bubble at this point? Not that it's not valuable or worthy of some of the growth it's seen, but It's a classic "there will be a greater fool down the road" theory, like the tech companies that proclaim they will never issue a dividend (in which case the only reason for buying the stock is that you believe someone else will buy it later). The correction will be painful for all concerned. An overlarge market cap isn't really that great. Sure, for a while you can raise capital extremely cheaply and that's nothing to sneer at! But it leaves a couple of problems: when it's big it's harder for it to grow, while a smaller mkt cap leaves more room for growth. And people are buying growth. The other problem is that it traps the leadership. 20 years ago when Time Warner bought AoL there was much discussion in the press about the various business logic/synergies (or lack thereof) between the two businesses. But really the primary motivation seemed much simpler: the only way that Steve Case could retire (without cratering the stock price) was to sell/merge the company into another entity of at least similar size. Tesla can't merge with any car company, or many other companies for that matter. As for the shorts: A couple of years ago my kid worked for a billionaire with whom he remains friendly. The other day he joked to me, "My greatest respect for XXX is that he is the only person I know who has made money shorting Tesla"