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It doesn't have to make sense, market cap is a flimsy meaningless value... If everyone holding TSLA tried selling at this price, a small fraction would manage t

It doesn't have to make sense, market cap is a flimsy meaningless value... If everyone holding TSLA tried selling at this price, a small fraction would manage to execute orders at that price before it plummetted. The thing that doesn't make sense is treating (number of shares * last executed order price) as anything more than just that.

Workaccount2 5y ago
The fact that not everyone is going to sell at once is built into the price.
- est31 5y ago
  You make it seem that the share price of Tesla is determined by rational decisions. If this is the case, it can't be shaken by "stock price is too high imo" tweets by the boss. He launched a rocket on June 1st 2020, and Tesla stock price went up. Tesla has such a high stock price because of an army of Musk fans believing in him. The company nearly went bankrupt multiple times. The cars are garbage quality. But Musk is awesome at selling dreams.
  - epgui 5y ago
    "garbage quality" In 2021, really? {{citation needed}}
    - est31 5y ago
      https://www.businessinsider.com/tesla-owner-details-quality-control-issues-remains-supporter-2021-9 https://www.businessinsider.com/tesla-owner-details-quality-... https://edition.cnn.com/2021/02/03/business/elon-musk-tesla-quality-problems/index.html https://edition.cnn.com/2021/02/03/business/elon-musk-tesla-... https://www.thedrive.com/tech/27989/teslas-screen-saga-shows-why-automotive-grade-matters https://www.thedrive.com/tech/27989/teslas-screen-saga-shows...
      - epgui 5y ago
        Panel gap issues have been fixed in the latest iterations. > "In 2018, engineering consultant Sandy Munro said Tesla's Model 3 had serious production flaws." Yeah, and listen to the incredible praise this same Sandy Munro is giving them this year. As early as January 2021, around the time the other articles were published: https://www.teslaoracle.com/2021/01/26/2021-tesla-model-3-sandy-munro-praise/ https://www.teslaoracle.com/2021/01/26/2021-tesla-model-3-sa... These articles may have been published in 2021, but by the time of publication they were in large part already out of date.
  - Workaccount2 5y ago
    >Tesla has such a high stock price because of an army of Musk fans believing in him. Right, and they are not going to dump their shares. So the projected scarcity from that lack of supply is priced in. I'm talking about price discovery, which is (as proved many times) independent of rationality.
    - lottin 5y ago
      Not sure what you mean by "projected scarcity". A Tesla shareholder will sell their shares if what they get in exchange is worth more, according to their opinion, than the shares. This applies to Musk fans as well, the only difference being that Musk fans tend to value Tesla shares higher than regular investors and therefore will only be willing to sell at a higher price compared to regular investors. Is that "priced in"? Well, yes, the current share price reflects that, but that's exactly the point the OP was making—that Tesla shares are overpriced because Tesla fans systematically overestimate their worth.
- lottin 5y ago
  What is that supposed to mean? If you have a car that is worth $1000 but you can only sell less than 1% of it at this price, is the car really worth $1000. The answer is no. If you sell the car, not just a small fraction of it, you will get considerably less than $1000, therefore the car not worth $1000.
  - Workaccount2 5y ago
    Companies buy out other public companies all the time. They usually pay more than the stock price per share. Right now if someone wanted to buy Tesla, they would have to pay more than the share price in order to get investors (the owners) to sell it.
writetoalok 5y ago
Share capital value is used in more than a few places. Like taking out a loan on your TSLA shares
silverpepsi 5y ago
I didn't really understand your point insofar as it sounds like a truism you could plug in any company name for: "If everyone holding TSLA tried selling at this price, a small fraction would manage to execute orders at that price before it plummetted." ??
greg7gkb 5y ago
Of course market cap is not the same as the equity value of a company. However market cap numbers are useful in comparing public companies to one another, and for broad categorizations of the scale of a business. Ref: https://www.investopedia.com/terms/m/marketcapitalization.asp#misconceptions-about-market-caps https://www.investopedia.com/terms/m/marketcapitalization.as...

Workaccount2 5y ago

The fact that not everyone is going to sell at once is built into the price.

est31 5y ago
You make it seem that the share price of Tesla is determined by rational decisions. If this is the case, it can't be shaken by "stock price is too high imo" tweets by the boss. He launched a rocket on June 1st 2020, and Tesla stock price went up. Tesla has such a high stock price because of an army of Musk fans believing in him. The company nearly went bankrupt multiple times. The cars are garbage quality. But Musk is awesome at selling dreams.
- epgui 5y ago
  "garbage quality" In 2021, really? {{citation needed}}
  - est31 5y ago
    https://www.businessinsider.com/tesla-owner-details-quality-control-issues-remains-supporter-2021-9 https://www.businessinsider.com/tesla-owner-details-quality-... https://edition.cnn.com/2021/02/03/business/elon-musk-tesla-quality-problems/index.html https://edition.cnn.com/2021/02/03/business/elon-musk-tesla-... https://www.thedrive.com/tech/27989/teslas-screen-saga-shows-why-automotive-grade-matters https://www.thedrive.com/tech/27989/teslas-screen-saga-shows...
    - epgui 5y ago
      Panel gap issues have been fixed in the latest iterations. > "In 2018, engineering consultant Sandy Munro said Tesla's Model 3 had serious production flaws." Yeah, and listen to the incredible praise this same Sandy Munro is giving them this year. As early as January 2021, around the time the other articles were published: https://www.teslaoracle.com/2021/01/26/2021-tesla-model-3-sandy-munro-praise/ https://www.teslaoracle.com/2021/01/26/2021-tesla-model-3-sa... These articles may have been published in 2021, but by the time of publication they were in large part already out of date.
- Workaccount2 5y ago
  >Tesla has such a high stock price because of an army of Musk fans believing in him. Right, and they are not going to dump their shares. So the projected scarcity from that lack of supply is priced in. I'm talking about price discovery, which is (as proved many times) independent of rationality.
  - lottin 5y ago
    Not sure what you mean by "projected scarcity". A Tesla shareholder will sell their shares if what they get in exchange is worth more, according to their opinion, than the shares. This applies to Musk fans as well, the only difference being that Musk fans tend to value Tesla shares higher than regular investors and therefore will only be willing to sell at a higher price compared to regular investors. Is that "priced in"? Well, yes, the current share price reflects that, but that's exactly the point the OP was making—that Tesla shares are overpriced because Tesla fans systematically overestimate their worth.
lottin 5y ago
What is that supposed to mean? If you have a car that is worth $1000 but you can only sell less than 1% of it at this price, is the car really worth $1000. The answer is no. If you sell the car, not just a small fraction of it, you will get considerably less than $1000, therefore the car not worth $1000.
- Workaccount2 5y ago
  Companies buy out other public companies all the time. They usually pay more than the stock price per share. Right now if someone wanted to buy Tesla, they would have to pay more than the share price in order to get investors (the owners) to sell it.

writetoalok 5y ago

Share capital value is used in more than a few places. Like taking out a loan on your TSLA shares

silverpepsi 5y ago

I didn't really understand your point insofar as it sounds like a truism you could plug in any company name for: "If everyone holding TSLA tried selling at this price, a small fraction would manage to execute orders at that price before it plummetted." ??

greg7gkb 5y ago

Of course market cap is not the same as the equity value of a company. However market cap numbers are useful in comparing public companies to one another, and for broad categorizations of the scale of a business. Ref: https://www.investopedia.com/terms/m/marketcapitalization.asp#misconceptions-about-market-caps https://www.investopedia.com/terms/m/marketcapitalization.as...