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Tesla's stock price has become a self-fulfilling prophecy. It seems like Tesla's success combination of a genuinely good product, the Musk hype (and troll) mac

Tesla's stock price has become a self-fulfilling prophecy. It seems like Tesla's success combination of a genuinely good product, the Musk hype (and troll) machine, early mover advantage, and most importantly access to cheap capital to build vertically integrated manufacturing and distribution operations that are unheard of in this industry. Tesla's playbook is also unusual and contrarian to traditional wisdom on a number of things - unlike most tech companies, they outsource very little of their core manufacturing, making it an extremely capital intensive operation; they rely on their CEO trolling on Twitter for building hype for their products; they make promises which they almost always underdeliver and frustrate early adopters with quality issues; they make unsubstantiated claims about their self driving tech and yet are still making progress that skeptics are ignoring. This is what keeps short sellers, stock analysts, economists and B-school profs on their toes when it comes to their predictions on Tesla. Reminds me of the early days of the iPhone era where a lot of folks were convinced it is going to fail.

guiriduro 5y ago
Lucky they have cheap equity capital because their debt is junk status. And some of the self-fulfilling prophecy is the cycle of good old WS analysts overrating an asset, Tesla, and their simple endorsement creates an inflationary cycle that generates a huge bubble and more me-too analysts - where have we heard that before? And we know how those end up despite all the transient commentaries that 'its different this time'. I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though.
- panick21_ 5y ago
  Their rating just got upgraded. Tesla as a company has basically retired all debt, they have 16 billion in cash and no debt. Their position is far better then other car companies. > I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though. Even if the Tesla stock dropped by 90%, Tesla would be perfectly fine. They do not really on raising money anymore. They create large amounts of free cashflow and enough profit to finance considerable future investment.

guiriduro 5y ago

Lucky they have cheap equity capital because their debt is junk status. And some of the self-fulfilling prophecy is the cycle of good old WS analysts overrating an asset, Tesla, and their simple endorsement creates an inflationary cycle that generates a huge bubble and more me-too analysts - where have we heard that before? And we know how those end up despite all the transient commentaries that 'its different this time'. I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though.

panick21_ 5y ago
Their rating just got upgraded. Tesla as a company has basically retired all debt, they have 16 billion in cash and no debt. Their position is far better then other car companies. > I doubt the Fed will be eager to bail TSLA investors out the way they did the banks in 2009 though. Even if the Tesla stock dropped by 90%, Tesla would be perfectly fine. They do not really on raising money anymore. They create large amounts of free cashflow and enough profit to finance considerable future investment.