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If I might be so bold, I don’t think anyone around here really appreciates Musk’s antics very much. However Tesla and SpaceX are fundamentally sound, if overval

If I might be so bold, I don’t think anyone around here really appreciates Musk’s antics very much. However Tesla and SpaceX are fundamentally sound, if overvalued, businesses. Since the start of Tesla he has had loud and obnoxious detractors who have had any number of reasons Tesla is about to implode. Instead they keep churning out solid EVs and SpaceX keeps putting stuff in space. As much as I dislike him, I would not bet against his businesses.

pclmulqdq 4y ago
Fundamentally sound doesn't always matter if they are overvalued enough. Companies that take a 99% drop in stock price are likely to end up losing the last percent in a bear market based on lack of confidence from investors.
- diogofranco 4y ago
  There is no last percent, it can drop another 99% and then another...
  - pclmulqdq 4y ago
    There is a "last percent" when you are thinking about drops from peak value, which is how many people think about stock prices.
- BbzzbB 4y ago
  If TSLA gets valued down to $7B then we're all fucked, the floor will have fallen from under the stock market as a whole.
api 4y ago
His businesses are not just him. He's the public face. They all have shareholders and many employees. I give Gwynne Shotwell a ton of credit for actually running SpaceX on a day to day basis. I think a lot of the issues with Tesla exist because as far as I can tell Tesla does not have a Gwynne Shotwell.
- glitchc 4y ago
  It's Gwynne who fired these people.
  - shswkna 4y ago
    I think that was the point.
michaelt 4y ago
Tesla is certainly a solid business in the sense that they make cars people are happy to buy. I certainly wouldn't expect the value of the business to drop to zero. But Tesla has a Price/Earnings ratio of 100 while other car companies like Toyota only have a P/E of 10. So Tesla's stock price could drop a long way while still being reasonable. And if Musk had got a loan against his Tesla stock to buy Twitter, a substantial drop in Tesla's price could have disproportionate results.
dont__panic 4y ago
It's an interesting strategy, really -- build a sorta-neat stable business, and affiliate it with a buffoon who constantly overpromises to his cult following to inflate the stock price to outrageous values. Then, your "sorta-neat stable business" has MASSIVE amounts of value from stock grants, capital it can use to hire more, pay more, finance debt for large purchases, etc. Kind of a superpower for an otherwise unremarkable company. Of course, there's other externalities from the buffoon and his cultists. They can drive away good workers, or pivot the company in unpleasant directions, or just leave some day, tank the company stock, and then the company loses the superpower and all of the things that come with it. But if your main mission is growth, well, it makes a lot of sense...
user_named 4y ago
I didn't say anything about the companies but the Tesla stock. It's going to crash when rates rise and capital flees risk.

pclmulqdq 4y ago

Fundamentally sound doesn't always matter if they are overvalued enough. Companies that take a 99% drop in stock price are likely to end up losing the last percent in a bear market based on lack of confidence from investors.

diogofranco 4y ago
There is no last percent, it can drop another 99% and then another...
- pclmulqdq 4y ago
  There is a "last percent" when you are thinking about drops from peak value, which is how many people think about stock prices.
BbzzbB 4y ago
If TSLA gets valued down to $7B then we're all fucked, the floor will have fallen from under the stock market as a whole.

api 4y ago

His businesses are not just him. He's the public face. They all have shareholders and many employees. I give Gwynne Shotwell a ton of credit for actually running SpaceX on a day to day basis. I think a lot of the issues with Tesla exist because as far as I can tell Tesla does not have a Gwynne Shotwell.

glitchc 4y ago
It's Gwynne who fired these people.
- shswkna 4y ago
  I think that was the point.

michaelt 4y ago

Tesla is certainly a solid business in the sense that they make cars people are happy to buy. I certainly wouldn't expect the value of the business to drop to zero. But Tesla has a Price/Earnings ratio of 100 while other car companies like Toyota only have a P/E of 10. So Tesla's stock price could drop a long way while still being reasonable. And if Musk had got a loan against his Tesla stock to buy Twitter, a substantial drop in Tesla's price could have disproportionate results.

dont__panic 4y ago

It's an interesting strategy, really -- build a sorta-neat stable business, and affiliate it with a buffoon who constantly overpromises to his cult following to inflate the stock price to outrageous values. Then, your "sorta-neat stable business" has MASSIVE amounts of value from stock grants, capital it can use to hire more, pay more, finance debt for large purchases, etc. Kind of a superpower for an otherwise unremarkable company. Of course, there's other externalities from the buffoon and his cultists. They can drive away good workers, or pivot the company in unpleasant directions, or just leave some day, tank the company stock, and then the company loses the superpower and all of the things that come with it. But if your main mission is growth, well, it makes a lot of sense...

user_named 4y ago

I didn't say anything about the companies but the Tesla stock. It's going to crash when rates rise and capital flees risk.