3 ms·

You know that both of these companies are profitable, right?

dragontamer 5y ago
You know that Tesla's $1 Billion/quarter profits pales in comparison to Toyota's $7 Billion/quarter, right? And yet, Tesla is "worth more" as a company than Toyota, Nissan, Volkswagen, GM, and Ford put together. And there are a myriad of long-term issues being put out on display here. Such as the FSD not working (promised "Coast-to-Coast" Full self driving back in 2017). Or the huge uptick in Model3 / Model Y quality complaints (coinciding with these stories about how rushed and impromptu the assembly lines were, such as what is discussed in the article). -------- That's the thing. Every year, Elon comes back to the market with a story for why the stock is worth even more money than before (he needs to keep doing this to get another $5 Billion from a secondary offering). Its so predictable. Elon says "this is the last raise I need". He creates some kind of "Hype Day", be it the battery-swap day, or solar tiles day, or some other promise he has no intent on actually delivering (or at a minimum: has no plans to actually deploy. Ex: Neither Cybertruck nor Tesla-Semi seem to have any concrete plans). He uses that hype to generate real money for the company. The hype results in real money getting raised (ex: Cybertruck reservations). He uses the Cybertruck reservations to go to the stock market and extract more money from investors (Look at all of these reservations, we'll all be rich), so investors give him money too. Then 5 years later, everyone has collective amnesia and forgets that Elon promised battery swaps, self-inserting "snake chargers", or full-self-driving to actually drive coast-to-coast, or "solar tiles'. Just in time for the new hype project and everyone hands money to Elon Musk again.
- fallingknife 5y ago
  Are you short the stock?
  - dragontamer 5y ago
    No. Are you long the stock? Kind of an odd question to ask.
    - fallingknife 5y ago
      Yes I own some. I ask because you seem so sure that there are major problems at the company.
      - dragontamer 5y ago
        I'm mostly summarizing from the article. Of course, information could be wrong. But I recall the "Elon banging head" incident from years past being reported in the news, and being further elaborated in this article. >> As he sputtered about the lack of danger from a slow-speed line, he began head-butting the front end of a car on the assembly line. “I don’t see how this could hurt me,” he said. “I want the cars to just keep moving.” A senior engineering manager tried to interject that it was designed as a safety measure. Musk screamed at him: “Get out!” This is not the first time I've seen this reported. --------- In any case, Elon's skill at pumping the stock price higher cannot be denied. I'd be a fool to short the stock against someone like that (A small investor such as myself would only get margin-called). I prefer an older, simpler investment style. I find companies I like, then I buy them. I see no reason to short stocks at all, plenty of opportunity in just buying what's good out there. I'm sure these long-term issues will come home to roost somehow. But I don't know the timing of it. So no point shorting unless I knew exactly when it all collapses. A short thesis is not only "I think the company is in trouble", but also is about having confidence in the __timing__ of those troubles. Ex: A great example is a hypothetical time-traveler who tells someone "Worldcom is cooking the books" in the early 1990s. Any trader who acted on that knowledge would have had their shorts blown out of the water by the 90s runup and tech bubble, and won't be "correct" until well over a decade later (long after many margin calls would have wiped out their position entirely). Its not enough to be correct about a stock when you're short. You have to be both correct about the timing AND direction.
  - tptacek 5y ago
    Comments like this are not OK on HN. You can search [shill author:dang] in the search bar below to see why. Assume good faith.

You know that Tesla's $1 Billion/quarter profits pales in comparison to Toyota's $7 Billion/quarter, right? And yet, Tesla is "worth more" as a company than Toyota, Nissan, Volkswagen, GM, and Ford put together. And there are a myriad of long-term issues being put out on display here. Such as the FSD not working (promised "Coast-to-Coast" Full self driving back in 2017). Or the huge uptick in Model3 / Model Y quality complaints (coinciding with these stories about how rushed and impromptu the assembly lines were, such as what is discussed in the article). -------- That's the thing. Every year, Elon comes back to the market with a story for why the stock is worth even more money than before (he needs to keep doing this to get another $5 Billion from a secondary offering). Its so predictable. Elon says "this is the last raise I need". He creates some kind of "Hype Day", be it the battery-swap day, or solar tiles day, or some other promise he has no intent on actually delivering (or at a minimum: has no plans to actually deploy. Ex: Neither Cybertruck nor Tesla-Semi seem to have any concrete plans). He uses that hype to generate real money for the company. The hype results in real money getting raised (ex: Cybertruck reservations). He uses the Cybertruck reservations to go to the stock market and extract more money from investors (Look at all of these reservations, we'll all be rich), so investors give him money too. Then 5 years later, everyone has collective amnesia and forgets that Elon promised battery swaps, self-inserting "snake chargers", or full-self-driving to actually drive coast-to-coast, or "solar tiles'. Just in time for the new hype project and everyone hands money to Elon Musk again.

fallingknife 5y ago
Are you short the stock?
- dragontamer 5y ago
  No. Are you long the stock? Kind of an odd question to ask.
  - fallingknife 5y ago
    Yes I own some. I ask because you seem so sure that there are major problems at the company.
    - dragontamer 5y ago
      I'm mostly summarizing from the article. Of course, information could be wrong. But I recall the "Elon banging head" incident from years past being reported in the news, and being further elaborated in this article. >> As he sputtered about the lack of danger from a slow-speed line, he began head-butting the front end of a car on the assembly line. “I don’t see how this could hurt me,” he said. “I want the cars to just keep moving.” A senior engineering manager tried to interject that it was designed as a safety measure. Musk screamed at him: “Get out!” This is not the first time I've seen this reported. --------- In any case, Elon's skill at pumping the stock price higher cannot be denied. I'd be a fool to short the stock against someone like that (A small investor such as myself would only get margin-called). I prefer an older, simpler investment style. I find companies I like, then I buy them. I see no reason to short stocks at all, plenty of opportunity in just buying what's good out there. I'm sure these long-term issues will come home to roost somehow. But I don't know the timing of it. So no point shorting unless I knew exactly when it all collapses. A short thesis is not only "I think the company is in trouble", but also is about having confidence in the __timing__ of those troubles. Ex: A great example is a hypothetical time-traveler who tells someone "Worldcom is cooking the books" in the early 1990s. Any trader who acted on that knowledge would have had their shorts blown out of the water by the 90s runup and tech bubble, and won't be "correct" until well over a decade later (long after many margin calls would have wiped out their position entirely). Its not enough to be correct about a stock when you're short. You have to be both correct about the timing AND direction.
- tptacek 5y ago
  Comments like this are not OK on HN. You can search [shill author:dang] in the search bar below to see why. Assume good faith.