8 ms·

Works until it doesn't. Exhibit TSLA.

by optimiz3 6y ago

mike00632 6y ago
Give it a few years. I'm still skeptical that Tesla should be worth more than all the other auto companies combined.
- option 6y ago
  In addition to making cars people want, Tesla also makes their own software, chips for AI inference and training, batteries, charging network, home energy solutions (solar+ battery). All of these not just related products but a cohesive strategy with sum much equal to its parts. Which other automaker does that? Edit: Having said that, I bought them long ago at their IPO price and sold long ago when they were around 300 pre-splits. The current valuation is indeed a little risky.
  - mike00632 6y ago
    I agree. I even own Tesla stock. But Tesla 1) still has a lot of scaling to get through before they reach anything close to the sales volume of their competition. Elon talks a lot about scaling but Tesla is still microscopic compared to other manufacturers. The business operations of a much larger company will present challenges in communication, structure, quality assurance, legal liabilities in various jurisdictions, not to mention the struggle of sourcing battery components. Tesla scaling is not as easy as spinning up additional Kubernetes pods. 2) The competition WILL electrify. Tesla is not likely to have more than 6 models in the coming years yet they will compete with hundreds of models from different companies that cater to different niches. Any company that offers an electric vehicle with physical buttons instead of a touchscreen has my attention. 3) Tesla workers will unionize and/or mature away from the company. I grew up around Detroit and witnessed a lot of labor dynamics with the UAW. Assuming Tesla succeeds in preventing a union the workers will eventually cash out their stock and leave for better offers at other automotive companies or spin off their services into tier automotive groups. Why write software for Tesla robots when the robot company will hire you to write software for all auto companies?
    - krrrh 6y ago
      The competition has electrified. America is just behind the trend. https://twitter.com/asymco/status/1352335793025650695?s=20 https://twitter.com/asymco/status/1352335793025650695?s=20
- omgwtfbyobbq 6y ago
  You mean their market value right? Tesla's enterprise value (EV) is pretty high thanks to their market value, but they have a ways to go before they surpass the EV of everyone else combined. Also, they're an energy company too, which means at least some of their speculative valuation is in energy, which is a totally different market.
- worker767424 6y ago
  Depends if they can have profit margins a lot higher than other auto companies. They probably can't, but higher profit margins are one way to justify a valuation. Really, it's priced higher because people like the brand, even if it's run by someone easily distracted who used shareholder money to bail out his cousin's solar business who goes around making 420 tweets, and that's when he's not calling people pedophiles. Oh, and their hubris kills people.
  - mschuster91 6y ago
    > Oh, and their hubris kills people. Killing people comes with manufacturing automobiles. Takata airbags and other "cost cutting" disasters, selling cars that can go 300+ km/h which can't be legally driven at that speed anywhere except race tracks and German autobahns, making safety features such as seat belts, side mirrors, traction control etc. optional until the government regulators have had enough deaths and mandate it...
  - mike00632 6y ago
    I suspect the profit margin for a $50k gas guzzling truck is pretty high.
    - splistud 6y ago
      And yet the car companies make very little
- marvin 6y ago
  Regardless, it should definitely be worth more than the $8 per share that it was in 2013, or the $45 per share that it was in 2014. Short sellers were clamoring very loudly then too. Lots of people preached "the market can stay irrational longer than you can stay solvent". Eventually, of course, if a security keeps only going up, this mantra will become true. The point is that sometimes, a bet that seems like a sure thing will blow up spectacularly. And that not everyone who takes such a bet is obviously wrong.
  - mike00632 6y ago
    Why should it be worth $8 a share? Do you really want GameStop in your retirement portfolio? It's pretty clear to me that it will, and should, be worth $0 eventually.
dcolkitt 6y ago
I'm old enough to remember people saying the exact same thing in 1999. The four most dangerous words in investing are: "This time is different"
- ngngngng 6y ago
  I'm fairly confident it's going to be a while before a stock is shorted over 100% again, barring some big regulatory overreach. As soon as it happens, we'll meme it again.
  - joncrane 6y ago
    Are you sure? Won't markets get more efficient and the squeeze start earlier (before it gets to 100% short interest)? Surely there will be more caution on the shorters' side (and perhaps earlier exits) and faster uptake on the squeezers' side? I think this GME thing is not only unprecedented, there won't be followed by anything similar (for maybe 100 years...the Piggly Wiggly short squeeze happened almost exactly 100 years ago...) Piggly Wiggly short squeeze story: https://twitter.com/dollarsanddata/status/1354561444780646401 https://twitter.com/dollarsanddata/status/135456144478064640...
- omgwtfbyobbq 6y ago
  "This time isn't different" too. Back in 1999, people weren't very hot on Amazon. https://www.thestreet.com/opinion/net-stock-horror-stories-readers-give-it-up-679070 https://www.thestreet.com/opinion/net-stock-horror-stories-r...
vadym909 6y ago
Many stocks grow into it over time: AMZN
- worker767424 6y ago
  But Jeff Bezos grew up, and now he's a fuckin tool. Elon Musk might as will still be 15.
PartiallyTyped 6y ago
'Fundamentals' and all that is a bs excuse used to scapegoat driving stocks they or their friends don't like to the ground. Let me ask this. How in the world can an 'analyst' know more about tech than the people that work all their lives in bleeding edge research and technology? They don't. They don't know more than Jim Keller whose primary task was development of Zen architecture at AMD - which traded at $5 before he joined and until after he was done. Why do I mention Jim Keller? Because a certain class of people can not only turn around a company, but whole industries even if only due to being famous and drawing unknown talents. In the case of TSLA; Andrej Karpathy leads the AI division. My argument is that 'analysts' know nothing of tech and they are in no position to act as the judges.
- kgwgk 6y ago
  “Our goal is, and I feel pretty good about this goal, that we’ll be able to do a demonstration drive of full autonomy all the way from LA to New York, from home in LA to let’s say dropping you off in Time Square in New York, and then having the car go park itself, by the end of next year,” [Musk] said on a press call [in October 2016]. “Without the need for a single touch, including the charger.” How much did you need to know about tech to realize that wasn't going to happen?
  - PartiallyTyped 6y ago
    Consider the following, everyone claimed reusing rockets was physically impossible. Well here we are now. Sure 'end of next year' may be impossible, but doing it at some point is not necessarily impossible given certain conditions. Nothing to do with targets, everything to do with values. And a company is more than what it produces, it is also the patents they own and the brains they wield. PS: I do research in ML.
    - kgwgk 6y ago
      The patents expire. The brains have legs. A valuation of 20 times revenue - and thousands of times earnings - is not justified by saying "a company is more than what it produces". Edit: put otherwise, how does your comment relate to the fact that Tesla was trading at 5-10% of the current price in 2019? Aren't the patents and brains the same? Why are Tesla's patents and brains worth now almost as much as those of Apple or Microsoft?

Works until it doesn't. Exhibit TSLA.

mike00632 6y ago

Give it a few years. I'm still skeptical that Tesla should be worth more than all the other auto companies combined.

option 6y ago
In addition to making cars people want, Tesla also makes their own software, chips for AI inference and training, batteries, charging network, home energy solutions (solar+ battery). All of these not just related products but a cohesive strategy with sum much equal to its parts. Which other automaker does that? Edit: Having said that, I bought them long ago at their IPO price and sold long ago when they were around 300 pre-splits. The current valuation is indeed a little risky.
- mike00632 6y ago
  I agree. I even own Tesla stock. But Tesla 1) still has a lot of scaling to get through before they reach anything close to the sales volume of their competition. Elon talks a lot about scaling but Tesla is still microscopic compared to other manufacturers. The business operations of a much larger company will present challenges in communication, structure, quality assurance, legal liabilities in various jurisdictions, not to mention the struggle of sourcing battery components. Tesla scaling is not as easy as spinning up additional Kubernetes pods. 2) The competition WILL electrify. Tesla is not likely to have more than 6 models in the coming years yet they will compete with hundreds of models from different companies that cater to different niches. Any company that offers an electric vehicle with physical buttons instead of a touchscreen has my attention. 3) Tesla workers will unionize and/or mature away from the company. I grew up around Detroit and witnessed a lot of labor dynamics with the UAW. Assuming Tesla succeeds in preventing a union the workers will eventually cash out their stock and leave for better offers at other automotive companies or spin off their services into tier automotive groups. Why write software for Tesla robots when the robot company will hire you to write software for all auto companies?
  - krrrh 6y ago
    The competition has electrified. America is just behind the trend. https://twitter.com/asymco/status/1352335793025650695?s=20 https://twitter.com/asymco/status/1352335793025650695?s=20
omgwtfbyobbq 6y ago
You mean their market value right? Tesla's enterprise value (EV) is pretty high thanks to their market value, but they have a ways to go before they surpass the EV of everyone else combined. Also, they're an energy company too, which means at least some of their speculative valuation is in energy, which is a totally different market.
worker767424 6y ago
Depends if they can have profit margins a lot higher than other auto companies. They probably can't, but higher profit margins are one way to justify a valuation. Really, it's priced higher because people like the brand, even if it's run by someone easily distracted who used shareholder money to bail out his cousin's solar business who goes around making 420 tweets, and that's when he's not calling people pedophiles. Oh, and their hubris kills people.
- mschuster91 6y ago
  > Oh, and their hubris kills people. Killing people comes with manufacturing automobiles. Takata airbags and other "cost cutting" disasters, selling cars that can go 300+ km/h which can't be legally driven at that speed anywhere except race tracks and German autobahns, making safety features such as seat belts, side mirrors, traction control etc. optional until the government regulators have had enough deaths and mandate it...
- mike00632 6y ago
  I suspect the profit margin for a $50k gas guzzling truck is pretty high.
  - splistud 6y ago
    And yet the car companies make very little
marvin 6y ago
Regardless, it should definitely be worth more than the $8 per share that it was in 2013, or the $45 per share that it was in 2014. Short sellers were clamoring very loudly then too. Lots of people preached "the market can stay irrational longer than you can stay solvent". Eventually, of course, if a security keeps only going up, this mantra will become true. The point is that sometimes, a bet that seems like a sure thing will blow up spectacularly. And that not everyone who takes such a bet is obviously wrong.
- mike00632 6y ago
  Why should it be worth $8 a share? Do you really want GameStop in your retirement portfolio? It's pretty clear to me that it will, and should, be worth $0 eventually.

dcolkitt 6y ago

I'm old enough to remember people saying the exact same thing in 1999. The four most dangerous words in investing are: "This time is different"

ngngngng 6y ago
I'm fairly confident it's going to be a while before a stock is shorted over 100% again, barring some big regulatory overreach. As soon as it happens, we'll meme it again.
- joncrane 6y ago
  Are you sure? Won't markets get more efficient and the squeeze start earlier (before it gets to 100% short interest)? Surely there will be more caution on the shorters' side (and perhaps earlier exits) and faster uptake on the squeezers' side? I think this GME thing is not only unprecedented, there won't be followed by anything similar (for maybe 100 years...the Piggly Wiggly short squeeze happened almost exactly 100 years ago...) Piggly Wiggly short squeeze story: https://twitter.com/dollarsanddata/status/1354561444780646401 https://twitter.com/dollarsanddata/status/135456144478064640...
omgwtfbyobbq 6y ago
"This time isn't different" too. Back in 1999, people weren't very hot on Amazon. https://www.thestreet.com/opinion/net-stock-horror-stories-readers-give-it-up-679070 https://www.thestreet.com/opinion/net-stock-horror-stories-r...

vadym909 6y ago

Many stocks grow into it over time: AMZN

worker767424 6y ago
But Jeff Bezos grew up, and now he's a fuckin tool. Elon Musk might as will still be 15.

PartiallyTyped 6y ago

'Fundamentals' and all that is a bs excuse used to scapegoat driving stocks they or their friends don't like to the ground. Let me ask this. How in the world can an 'analyst' know more about tech than the people that work all their lives in bleeding edge research and technology? They don't. They don't know more than Jim Keller whose primary task was development of Zen architecture at AMD - which traded at $5 before he joined and until after he was done. Why do I mention Jim Keller? Because a certain class of people can not only turn around a company, but whole industries even if only due to being famous and drawing unknown talents. In the case of TSLA; Andrej Karpathy leads the AI division. My argument is that 'analysts' know nothing of tech and they are in no position to act as the judges.

kgwgk 6y ago
“Our goal is, and I feel pretty good about this goal, that we’ll be able to do a demonstration drive of full autonomy all the way from LA to New York, from home in LA to let’s say dropping you off in Time Square in New York, and then having the car go park itself, by the end of next year,” [Musk] said on a press call [in October 2016]. “Without the need for a single touch, including the charger.” How much did you need to know about tech to realize that wasn't going to happen?
- PartiallyTyped 6y ago
  Consider the following, everyone claimed reusing rockets was physically impossible. Well here we are now. Sure 'end of next year' may be impossible, but doing it at some point is not necessarily impossible given certain conditions. Nothing to do with targets, everything to do with values. And a company is more than what it produces, it is also the patents they own and the brains they wield. PS: I do research in ML.
  - kgwgk 6y ago
    The patents expire. The brains have legs. A valuation of 20 times revenue - and thousands of times earnings - is not justified by saying "a company is more than what it produces". Edit: put otherwise, how does your comment relate to the fact that Tesla was trading at 5-10% of the current price in 2019? Aren't the patents and brains the same? Why are Tesla's patents and brains worth now almost as much as those of Apple or Microsoft?