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Next up, they'll have to ban Tesla, Square, Coinbase, Riot, etc. Where will they draw the line? Pretty much the whole market has exposure to Bitcoin through SP

Next up, they'll have to ban Tesla, Square, Coinbase, Riot, etc. Where will they draw the line? Pretty much the whole market has exposure to Bitcoin through SP500->Tesla at this point.

mullingitover 6y ago
Tesla has a market cap of 673.80B at the moment. Their BTC holdings are barely a rounding error.
- mike_d 6y ago
  Which is a problem in itself. Tesla with a 2% market share in the US, is valued more than Toyota, Volkswagen, Daimler, General Motors, and BMW combined (40% of the domestic market). Toyota makes about $2,500 profit for every car sold. Tesla would need to make $50,000 per unit sold on average, or basically 100% profit on a Model 3, to justify the market cap.
  - rawtxapp 6y ago
    Personally, I'm with you, I just don't see how Tesla's valuation is justified. Their cars have QC issues and they have very formidable competitors. If I had to buy a car, I'd pick the Porsche Taycan over any Tesla any time of the day (except maybe the Roadster, but it's not out yet). That said, I have a few friends who bought it's shares and their rationale is that it's a "clean energy play", far bigger than cars and that their brand is going to be as valuable as Apple. Only time will tell I guess, everyone can put their money where their mouth is and shorting Tesla has been a pretty bad proposition so far.
    - wutXthree 6y ago
      Price is a function of supply and demand.
      - loceng 6y ago
        And decentralized demand - e.g. individual investors and institutions to a degree (individuals who give their buy-sell power to an org) - will be more accurately voting at least than say the gullible layperson buying into the Bitcoin hype-MLM; most people buying Tesla stock arguably mostly aren't betting/investing based on nothing - there are many good, valid reasons to see Tesla taking off exponentially and even owning 40%+ of the EV market - and they're optimizing for battery-solar tech and energy business as well. P.S. I'm not trying to convince anyone here of Tesla's value, I've shared some of my thoughts before, and there are plenty other people who have done a thorough job detailing the ecosystem and its potential.
  - patd 6y ago
    Overvalued, maybe. But comparing last year production of cars is in my opinion a bad metrics to compare Tesla to other automakers. First Tesla is growing fast so that $50k will drastically go down in the coming years. Tesla is more vertically integrated so you have to include the valuation of all the dealerships, parts of their suppliers, the charging network, ... And third there are the “other” businesses like the battery storage, solar roofs, software revenue, ... So overall the numbers of cars produced is probably too simplistic to compare them.
  - sneak 6y ago
    I agree that the valuation is silly. I don't agree that it's a problem. Why do you think that a silly valuation is a problem?
  - noxer 6y ago
    Today value isn't about what Tesla does today, its about what people think Tesla will deliver in the future. The numbers and profits per car are basically meaningless. You buy if you think the number will become better not of you think they are awesome now and there isn't much progress possible anymore.
  - bob33212 6y ago
    Stock prices do not reflect current profits. Imagine if they did. If tsla was currently 50/share to be inline with your metric. How would you stop people from buying it at 60? Because using your math they will be worth 75+ next year when the other factories come online.
    - rchaud 6y ago
      It's supposed to at least correlate with future free cash flow, which it doesn't do either. Sometimes I wonder if quantitative easing and corp tax cuts have distorted the stock market past the point where Benjamin Graham-style theories of value investing have become invalidated.
      - bob33212 6y ago
        Sounds like AMZN in 1999
  - dmak 6y ago
    May I ask why are you comparing with ICE automakers? Tesla is much more than that. Wouldn’t your comparison be like only comparing Amazon’s Kindle vertical with the rest of the ebook reader market?
- rawtxapp 6y ago
  Sure, compared to their market cap, it's small. But it's 1.5B$, a very significant percentage of the cash they have on hand.
- noxer 6y ago
  Comparing their asset balance with the market cap of its stock is complete nonsense. Tesla has 100% access to the BTCs and other asset it holds but there is no access to the market cap. Its a fictive price tag on all existing shares. People use it to compare companies. The money does not exist anywhere and certainly can not be used by Tesla.
  - mullingitover 6y ago
    > The money does not exist anywhere and certainly can not be used by Tesla. What exactly is stopping them from borrowing against their shares?
    - noxer 6y ago
      The market cap is calculated from all shares. Tesla obvious does not owe them.
  - JumpCrisscross 6y ago
    > Comparing their asset balance with the market cap of its stock is complete nonsense Eh, not really. They’re both stock (as opposed to flow) measures. And one is a subset of the other. That said, crypto as fraction of assets would be a more rigorous metric.
    - noxer 6y ago
      >And one is a subset of the other. Not alt all. Mark cap is a fictive value. Assets hold by a company aren't fictive and are not part of the market cap at all. Market cap is simply the price of all stocks at the current market price of one. >crypto as fraction of assets That would make more sense but also would need to include debts.
      - sokoloff 6y ago
        If Tesla announced it was going to sell all of its BTC tomorrow, would they get 100% of its notional value? There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.

Next up, they'll have to ban Tesla, Square, Coinbase, Riot, etc. Where will they draw the line? Pretty much the whole market has exposure to Bitcoin through SP500->Tesla at this point.

mullingitover 6y ago

Tesla has a market cap of 673.80B at the moment. Their BTC holdings are barely a rounding error.

mike_d 6y ago
Which is a problem in itself. Tesla with a 2% market share in the US, is valued more than Toyota, Volkswagen, Daimler, General Motors, and BMW combined (40% of the domestic market). Toyota makes about $2,500 profit for every car sold. Tesla would need to make $50,000 per unit sold on average, or basically 100% profit on a Model 3, to justify the market cap.
- rawtxapp 6y ago
  Personally, I'm with you, I just don't see how Tesla's valuation is justified. Their cars have QC issues and they have very formidable competitors. If I had to buy a car, I'd pick the Porsche Taycan over any Tesla any time of the day (except maybe the Roadster, but it's not out yet). That said, I have a few friends who bought it's shares and their rationale is that it's a "clean energy play", far bigger than cars and that their brand is going to be as valuable as Apple. Only time will tell I guess, everyone can put their money where their mouth is and shorting Tesla has been a pretty bad proposition so far.
  - wutXthree 6y ago
    Price is a function of supply and demand.
    - loceng 6y ago
      And decentralized demand - e.g. individual investors and institutions to a degree (individuals who give their buy-sell power to an org) - will be more accurately voting at least than say the gullible layperson buying into the Bitcoin hype-MLM; most people buying Tesla stock arguably mostly aren't betting/investing based on nothing - there are many good, valid reasons to see Tesla taking off exponentially and even owning 40%+ of the EV market - and they're optimizing for battery-solar tech and energy business as well. P.S. I'm not trying to convince anyone here of Tesla's value, I've shared some of my thoughts before, and there are plenty other people who have done a thorough job detailing the ecosystem and its potential.
- patd 6y ago
  Overvalued, maybe. But comparing last year production of cars is in my opinion a bad metrics to compare Tesla to other automakers. First Tesla is growing fast so that $50k will drastically go down in the coming years. Tesla is more vertically integrated so you have to include the valuation of all the dealerships, parts of their suppliers, the charging network, ... And third there are the “other” businesses like the battery storage, solar roofs, software revenue, ... So overall the numbers of cars produced is probably too simplistic to compare them.
- sneak 6y ago
  I agree that the valuation is silly. I don't agree that it's a problem. Why do you think that a silly valuation is a problem?
- noxer 6y ago
  Today value isn't about what Tesla does today, its about what people think Tesla will deliver in the future. The numbers and profits per car are basically meaningless. You buy if you think the number will become better not of you think they are awesome now and there isn't much progress possible anymore.
- bob33212 6y ago
  Stock prices do not reflect current profits. Imagine if they did. If tsla was currently 50/share to be inline with your metric. How would you stop people from buying it at 60? Because using your math they will be worth 75+ next year when the other factories come online.
  - rchaud 6y ago
    It's supposed to at least correlate with future free cash flow, which it doesn't do either. Sometimes I wonder if quantitative easing and corp tax cuts have distorted the stock market past the point where Benjamin Graham-style theories of value investing have become invalidated.
    - bob33212 6y ago
      Sounds like AMZN in 1999
- dmak 6y ago
  May I ask why are you comparing with ICE automakers? Tesla is much more than that. Wouldn’t your comparison be like only comparing Amazon’s Kindle vertical with the rest of the ebook reader market?
rawtxapp 6y ago
Sure, compared to their market cap, it's small. But it's 1.5B$, a very significant percentage of the cash they have on hand.
noxer 6y ago
Comparing their asset balance with the market cap of its stock is complete nonsense. Tesla has 100% access to the BTCs and other asset it holds but there is no access to the market cap. Its a fictive price tag on all existing shares. People use it to compare companies. The money does not exist anywhere and certainly can not be used by Tesla.
- mullingitover 6y ago
  > The money does not exist anywhere and certainly can not be used by Tesla. What exactly is stopping them from borrowing against their shares?
  - noxer 6y ago
    The market cap is calculated from all shares. Tesla obvious does not owe them.
- JumpCrisscross 6y ago
  > Comparing their asset balance with the market cap of its stock is complete nonsense Eh, not really. They’re both stock (as opposed to flow) measures. And one is a subset of the other. That said, crypto as fraction of assets would be a more rigorous metric.
  - noxer 6y ago
    >And one is a subset of the other. Not alt all. Mark cap is a fictive value. Assets hold by a company aren't fictive and are not part of the market cap at all. Market cap is simply the price of all stocks at the current market price of one. >crypto as fraction of assets That would make more sense but also would need to include debts.
    - sokoloff 6y ago
      If Tesla announced it was going to sell all of its BTC tomorrow, would they get 100% of its notional value? There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.