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All of these companies may have a functional business and can stick around, but they are not worth the valuation present in their stock. Even Tesla is not worth

All of these companies may have a functional business and can stick around, but they are not worth the valuation present in their stock. Even Tesla is not worth anywhere near $1T. In the end you have to eventually earn enough to support the price (once all the Fed support goes away from the market) but none of these companies will ever make enough revenue or profit. For now unreality keeps the market high.

batshit_beaver 5y ago
Tesla is totally worth 1 trillion if the dollar is worth nothing.
bdcravens 5y ago
Tesla is profitable. The profit is propped up a bit by subsidies, but it seems strange to include the company in a discussion about service providers that are battling in a war of attrition.
- mdoms 5y ago
  You can be profitable and also wildly overvalued. If I invest $50 million for a 50% stake in my neighbour's kids' lemonade stand it's very unlikely to be a reasonable valuation regardless of their gross margin.
- ska 5y ago
  > The profit is propped up a bit by subsidies, b Does this mean that Tesla would have a smaller profit margin without subsidies, or that Tesla would not be profitable in real terms without the subsidies?
  - selectodude 5y ago
    Both. People would purchase fewer teslas without the tax credit and Tesla would have less income without the ability to trade their tax credits to “dirtier” manufacturers.
    - ska 5y ago
      Sure this is all coupled; But I was trying to separate "propped up a bit" from "pretty dependent on". It's not really clear without having looked into the details.
- lostcolony 5y ago
  Tesla is profitable; so are some small mom and pop stores. The valuation isn't a boolean "isProfitable ? trillion dollars : worthless". Compare Tesla's revenues against other trillion dollar companies and it clearly seems overvalued. Here's Bloomberg's analysis - https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-lowest-revenue-company-to-hit-1-trillion-market-value https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-...
  - OldHand2018 5y ago
    > However, Jonas said Morgan Stanley clients also noted the company’s larger addressable market, and an opportunity to dominate the internet-of-cars market as other possible factors built into its valuation. Ah yes, the internet-of-cars market. It would be very wise and lucrative to dominate there.
    - lostcolony 5y ago
      Yeah; the ink spilled on "IoV" (Internet of Vehicles) is...hilariously bad. And even if you assume there's something there, Tesla doesn't seem well prepared to dominate it, since all of the use cases assume every car is connected. Maybe I missed it, but I haven't seen Tesla seeking to write software for other manufacturers, nor seeking to create RFCs or similar collaborative methods for ensuring a standard that would connect all vehicles.
mdoms 5y ago
Tesla will be propped up by the American taxpayers, as American automakers always have been.

batshit_beaver 5y ago

Tesla is totally worth 1 trillion if the dollar is worth nothing.

bdcravens 5y ago

Tesla is profitable. The profit is propped up a bit by subsidies, but it seems strange to include the company in a discussion about service providers that are battling in a war of attrition.

mdoms 5y ago
You can be profitable and also wildly overvalued. If I invest $50 million for a 50% stake in my neighbour's kids' lemonade stand it's very unlikely to be a reasonable valuation regardless of their gross margin.
ska 5y ago
> The profit is propped up a bit by subsidies, b Does this mean that Tesla would have a smaller profit margin without subsidies, or that Tesla would not be profitable in real terms without the subsidies?
- selectodude 5y ago
  Both. People would purchase fewer teslas without the tax credit and Tesla would have less income without the ability to trade their tax credits to “dirtier” manufacturers.
  - ska 5y ago
    Sure this is all coupled; But I was trying to separate "propped up a bit" from "pretty dependent on". It's not really clear without having looked into the details.
lostcolony 5y ago
Tesla is profitable; so are some small mom and pop stores. The valuation isn't a boolean "isProfitable ? trillion dollars : worthless". Compare Tesla's revenues against other trillion dollar companies and it clearly seems overvalued. Here's Bloomberg's analysis - https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-lowest-revenue-company-to-hit-1-trillion-market-value https://www.bloomberg.com/news/articles/2021-10-26/tesla-is-...
- OldHand2018 5y ago
  > However, Jonas said Morgan Stanley clients also noted the company’s larger addressable market, and an opportunity to dominate the internet-of-cars market as other possible factors built into its valuation. Ah yes, the internet-of-cars market. It would be very wise and lucrative to dominate there.
  - lostcolony 5y ago
    Yeah; the ink spilled on "IoV" (Internet of Vehicles) is...hilariously bad. And even if you assume there's something there, Tesla doesn't seem well prepared to dominate it, since all of the use cases assume every car is connected. Maybe I missed it, but I haven't seen Tesla seeking to write software for other manufacturers, nor seeking to create RFCs or similar collaborative methods for ensuring a standard that would connect all vehicles.

mdoms 5y ago

Tesla will be propped up by the American taxpayers, as American automakers always have been.