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The scary thing for me is the 2nd order effects of this activity as companies try to act increasingly like meme stocks to boost share price and abandon all pret
by SgtBastard 4y ago
The scary thing for me is the 2nd order effects of this activity as companies try to act increasingly like meme stocks to boost share price and abandon all pretence of P/E ratios and profitability.
- noduerme 4y agoThis. Also, in terms of downstream effects: Taking sibling's point, even now at $650B Tesla has market cap equivalent to the next 10 largest automakers combined, while having a P/E ratio ten times higher than Toyota, 32 times higher than BMW. Isn't the effect that other automakers are undercapitalized? The distortion of the market that's inflated Tesla has funneled investment away from productive non-meme competitors. That means layoffs and more supply chain problems. And that capital just gets wiped out when the bubble bursts, leaving a giant supply-side hole.