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And yet NKLA still has a $5B market cap despite the entire company being 100% fraud. Amazing. [1] https://finance.yahoo.com/quote/nkla https://finance.yahoo.co

And yet NKLA still has a $5B market cap despite the entire company being 100% fraud. Amazing. [1] https://finance.yahoo.com/quote/nkla https://finance.yahoo.com/quote/nkla

api 5y ago
https://coinmarketcap.com https://coinmarketcap.com Tether, either a scam or a criminal money laundering enterprise (or both), has a market cap of over $50B. DOGE, a joke based on an old meme of a Shiba Inu, has a market cap of over $1B. Not only is the real Tesla's market cap not irrational, at this point I'd say any company that actually has anything of value should be valued in the hundreds of billions. The pizza place around the corner should be at least $100B in that they actually make something.
dannykwells 5y ago
Came here to say this. So many good companies doing real work worth way less. Pure insanity.
JumpCrisscross 5y ago
They have ~$900mm cash. So it’s only $80% bullshit, for whatever that’s worth.
- nickik 5y ago
  Well they cheated so much money in and now they are on live suppor. But since they don't have much expenses they can survive for a long run on that money.
lotsofpulp 5y ago
It has a $5B market cap, and I was not able to confirm that the organization has every produced a working product. A cursory look at Wikipedia for the guy and the company would indicate it is a scam. Not to mention naming the company to be off brand, but related to a real company. The only source of his wealth might be Worthington Industries, but his track record indicates he has no expertise in making or managing anything, so is he related to someone high up there or something?
belter 5y ago
Well if a Deli can be worth 100 million... https://www.cnbc.com/2021/04/15/theres-a-single-new-jersey-deli-doing-35000-in-sales-valued-at-100-million-in-the-stock-market.html https://www.cnbc.com/2021/04/15/theres-a-single-new-jersey-d... Maybe all these valuations are correct and its the dollar that is going the direction of the zimbabwean dollar ? https://s.wsj.net/public/resources/images/P1-BA632_ZIMDLR_DV_20110510183741.jpg https://s.wsj.net/public/resources/images/P1-BA632_ZIMDLR_DV...
- koolba 5y ago
  Apples and oranges. NKLA has a daily volume of 11M shares. I’m not saying there isn’t shenanigans involved, but it’s much harder to do at that scale v.s. a handful of thinly traded OTC shares.
- woodruffw 5y ago
  That deli isn't "worth" $100 million: it's thinly traded on an underregulated market (OTC). The headline is eye popping and drives readers; the more mundane reality is that the deli's 60-or-so shareholders can stake whatever prices they want between each other without ever realizing an actual valuation of anywhere near $100 million. This is in contrast to Nikola, which is currently listed on Nasdaq and appears to have gone out of its way to deceive retail investors.
  - rchaud 5y ago
    This is exactly how startup valuations work though. Some minor chunk of equity gets bought up by an investor, so by extension the entire equity of the company is now worth billions on a per-share basis.
    - woodruffw 5y ago
      > Some minor chunk of equity gets bought up by an investor, so by extension the entire equity of the company is now worth billions on a per-share basis. This prospective valuation is based on the assumption that the company eventually either goes public on a reputable, retail exchange or is bought for some reasonable fraction of the expected share price. Neither of these is or would be true for the deli. But I think your overarching point is an excellent one, and it's exactly why I'm skeptical of the valuations implied by fractional VC investments. Especially when they're tied to the Uber model.
chasebank 5y ago
Older I get, more I realize the market is just a game of human psychology. Stocks, housing, crypto, etc. History says speculative 'investing' ends poorly but this time, who knows? If you happen to have the answer, I'm all ears.
- extrememacaroni 5y ago
  It's a thing created by humans, used by humans, who assign value to tickers, where everyone tries to win and some have to lose for others to win. It can only be a game of cat psychology.
- snarkypixel 5y ago
  "The father of value investing, Benjamin Graham, explained this concept by saying that in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company." Boring answer, but in the long-term, great businesses go up, whereas crappy businesses go bankrupt.
  - f38zf5vdt 5y ago
    They used to. In the era of quantitative easing, governments just pump money into any failing major player. edit: I see I rustled some jimmies. Feel free to have a look yourself at "modern capitalism". https://money.cnn.com/news/specials/storysupplement/bankbailout/ https://money.cnn.com/news/specials/storysupplement/bankbail...
    - ethbr0 5y ago
      Pumping money into the market in general has the same effect. Especially if chosen inflation measures conveniently exclude capital areas money would accumulate (stocks & property).
      - f38zf5vdt 5y ago
        Yes, agreed.
kolbe 5y ago
Thank /r/WSB for that. No one can short dog companies anymore for fear of being short squeezed.
- adabyron 5y ago
  That subreddit is just a scapegoat. There are so many other places people are looking for the next big return. Also you can short dog companies still. But if there are to many people shorting it, like GME had, you do run this risk. That's not any internet forum's fault. That said, it can be really hard to make money betting on stocks to go down. I believe it was Care.com where people were putting out similar reports of how terrible the company was & the horrific incidents happening. In the first half of 2018 you had articles pointing out all these issues. It's stock kept going up around 30% before it finally crashed in the beginning of 2020. Of course it is only fair to also call out all the quality companies where short investor companies try to keep the price down for ages or publish BS to profit off shorts. That was a big thing for those who were happy to short squeeze during GME.
- pvarangot 5y ago
  In like, 99% of the cases where you make a bet that a ticker will go down your enemy is timing it right given the high volatility on dog companies, not a "squeeze".

And yet NKLA still has a $5B market cap despite the entire company being 100% fraud. Amazing. [1] https://finance.yahoo.com/quote/nkla https://finance.yahoo.com/quote/nkla

api 5y ago

https://coinmarketcap.com https://coinmarketcap.com Tether, either a scam or a criminal money laundering enterprise (or both), has a market cap of over $50B. DOGE, a joke based on an old meme of a Shiba Inu, has a market cap of over $1B. Not only is the real Tesla's market cap not irrational, at this point I'd say any company that actually has anything of value should be valued in the hundreds of billions. The pizza place around the corner should be at least $100B in that they actually make something.

dannykwells 5y ago

Came here to say this. So many good companies doing real work worth way less. Pure insanity.

JumpCrisscross 5y ago

They have ~$900mm cash. So it’s only $80% bullshit, for whatever that’s worth.

nickik 5y ago
Well they cheated so much money in and now they are on live suppor. But since they don't have much expenses they can survive for a long run on that money.

lotsofpulp 5y ago

It has a $5B market cap, and I was not able to confirm that the organization has every produced a working product. A cursory look at Wikipedia for the guy and the company would indicate it is a scam. Not to mention naming the company to be off brand, but related to a real company. The only source of his wealth might be Worthington Industries, but his track record indicates he has no expertise in making or managing anything, so is he related to someone high up there or something?

belter 5y ago

Well if a Deli can be worth 100 million... https://www.cnbc.com/2021/04/15/theres-a-single-new-jersey-deli-doing-35000-in-sales-valued-at-100-million-in-the-stock-market.html https://www.cnbc.com/2021/04/15/theres-a-single-new-jersey-d... Maybe all these valuations are correct and its the dollar that is going the direction of the zimbabwean dollar ? https://s.wsj.net/public/resources/images/P1-BA632_ZIMDLR_DV_20110510183741.jpg https://s.wsj.net/public/resources/images/P1-BA632_ZIMDLR_DV...

koolba 5y ago
Apples and oranges. NKLA has a daily volume of 11M shares. I’m not saying there isn’t shenanigans involved, but it’s much harder to do at that scale v.s. a handful of thinly traded OTC shares.
woodruffw 5y ago
That deli isn't "worth" $100 million: it's thinly traded on an underregulated market (OTC). The headline is eye popping and drives readers; the more mundane reality is that the deli's 60-or-so shareholders can stake whatever prices they want between each other without ever realizing an actual valuation of anywhere near $100 million. This is in contrast to Nikola, which is currently listed on Nasdaq and appears to have gone out of its way to deceive retail investors.
- rchaud 5y ago
  This is exactly how startup valuations work though. Some minor chunk of equity gets bought up by an investor, so by extension the entire equity of the company is now worth billions on a per-share basis.
  - woodruffw 5y ago
    > Some minor chunk of equity gets bought up by an investor, so by extension the entire equity of the company is now worth billions on a per-share basis. This prospective valuation is based on the assumption that the company eventually either goes public on a reputable, retail exchange or is bought for some reasonable fraction of the expected share price. Neither of these is or would be true for the deli. But I think your overarching point is an excellent one, and it's exactly why I'm skeptical of the valuations implied by fractional VC investments. Especially when they're tied to the Uber model.

chasebank 5y ago

Older I get, more I realize the market is just a game of human psychology. Stocks, housing, crypto, etc. History says speculative 'investing' ends poorly but this time, who knows? If you happen to have the answer, I'm all ears.

extrememacaroni 5y ago
It's a thing created by humans, used by humans, who assign value to tickers, where everyone tries to win and some have to lose for others to win. It can only be a game of cat psychology.
snarkypixel 5y ago
"The father of value investing, Benjamin Graham, explained this concept by saying that in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company." Boring answer, but in the long-term, great businesses go up, whereas crappy businesses go bankrupt.
- f38zf5vdt 5y ago
  They used to. In the era of quantitative easing, governments just pump money into any failing major player. edit: I see I rustled some jimmies. Feel free to have a look yourself at "modern capitalism". https://money.cnn.com/news/specials/storysupplement/bankbailout/ https://money.cnn.com/news/specials/storysupplement/bankbail...
  - ethbr0 5y ago
    Pumping money into the market in general has the same effect. Especially if chosen inflation measures conveniently exclude capital areas money would accumulate (stocks & property).
    - f38zf5vdt 5y ago
      Yes, agreed.

kolbe 5y ago

Thank /r/WSB for that. No one can short dog companies anymore for fear of being short squeezed.

adabyron 5y ago
That subreddit is just a scapegoat. There are so many other places people are looking for the next big return. Also you can short dog companies still. But if there are to many people shorting it, like GME had, you do run this risk. That's not any internet forum's fault. That said, it can be really hard to make money betting on stocks to go down. I believe it was Care.com where people were putting out similar reports of how terrible the company was & the horrific incidents happening. In the first half of 2018 you had articles pointing out all these issues. It's stock kept going up around 30% before it finally crashed in the beginning of 2020. Of course it is only fair to also call out all the quality companies where short investor companies try to keep the price down for ages or publish BS to profit off shorts. That was a big thing for those who were happy to short squeeze during GME.
pvarangot 5y ago
In like, 99% of the cases where you make a bet that a ticker will go down your enemy is timing it right given the high volatility on dog companies, not a "squeeze".