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P/E is still 33 as we head into a recession, and Musk continues to anger the traditional customer base that cares about environmental issues. He might make up

by bb88 4y ago

P/E is still 33 as we head into a recession, and Musk continues to anger the traditional customer base that cares about environmental issues. He might make up with Maga republicans, but many of them want a Ford Pickup. We'll see what the 4th Quarter holds but it's still possible that EPS will grow and the price will still tank as it becomes clear that the market becomes saturated with Elon's big ego. Even $68 is would mean a P/E of around 20 which is still ~3 times higher than Ford's.

remote_phone 4y ago
Competition is fierce now for EVs and I think they miss deliveries and Musk’s shenanigans have dried up his backlog. Even at $68 it’s still $250B valuation which is too high for a car company like Tesla. It won’t take a lot of lost sales for Tesla to go red.
dragontamer 4y ago
I'm pretty sure the stock will continue to decline. But still, there's a big issue of risk vs reward at play here. A short-seller would have made a significant amount of money if they've been short since $300 (or higher). There's always a time to "Collect your chips off the table". It always feels too early when you do so. But you gotta run the calculation: is staying in and possibly losing everything worth the risk? If so, how much reward do you think you're gonna make? By staying short, the full $190 / share gains from this trade remains at risk. And for what? The chance that it maybe turns into $230 / share gains? There's definitely a risk/reward calculation at play here. If you're really certain about that $70 price point coming up, then yeah, hold onto the shorts a bit longer. But anyone who has watched a 70% collapse of a stock that they sold short really should be considering just taking profits. How much further do you think it really can fall? ---- If you're certain to hold onto those shorts... maybe buy a couple of call options to lock in your wins, at the cost of theta-decay. There's other ways to hedge and "lock in" some of the winnings. But no trader should be the idiot who "bets it all on black" over-and-over-and-over again. You gotta take your chips off the table at some point, and today is a good day as any other day.
- bb88 4y ago
  > How much further do you think it really can fall? Well that's a great question. If you think Tesla is close to bankruptcy than the answer is: all the way down. But even so, downward pressure can create more downward pressure if Tesla has been over leveraged to obtain loans or to buy Twitter. Let's say Tesla stock was used as collateral for loans, with a promise that the stock won't go below $100, e.g. If it does go below $100 then someone is on the hook to provide cash collateral to offset the loss of the value of the stock. The primary way to do that is to sell Tesla stock to raise cash. That creates further downward pressure on the stock price. Or Tesla might be lying about something materially related to the stock price, which you've discovered and are pointing out to the WSJ, because you know, you have a reporter over there on speed dial (not everyone does, of course, but if your trades are $100M at a time then you should). Or maybe you're betting that Elon is going to self implode and jump out of the window, or murdered because of shady dealings with Russia. Sure that's long odds maybe, but not entirely unheard of. Derogatory information about a company or it's CEO might be a gamble that's worth taking. I'm sure there's a lot of dirt in Fortune 500 companies that is waiting to be found with the right team of private investigators.
  - dragontamer 4y ago
    > Well that's a great question. If you think Tesla is close to bankruptcy than the answer is: all the way down. Exactly. And what is that value? $0. If you're someone who has short-sold at $300, that means you've already achieved over 60% of the possible value you can extract (even if TSLA goes _completely_ bankrupt). Or in other words, you've made $200, and the worst it could _possibly_ be for TSLA is a decline to $0, the remaining $110 or so of the stock price. Its... a bit of an unfavorable odds, don't you think? ------------ Don't get me wrong. I think there's some sketchy as hell things going on to TSLA's books. CFOs were running away from this company for years. I do think that a long-term, hidden fraud case, could be possible... which would lead to a bankruptcy-like $0 (or maybe $1 to $2) valuation. But I have no such evidence on this. Its purely speculative, based on how the CFOs of TSLA have acted, as well as the weird nepotism moves of Elon Musk + Solar City (Kimball Musk). A lot of smoke, but without proof, its a rather risky trade.

by bb88 4y ago

remote_phone 4y ago

Competition is fierce now for EVs and I think they miss deliveries and Musk’s shenanigans have dried up his backlog. Even at $68 it’s still $250B valuation which is too high for a car company like Tesla. It won’t take a lot of lost sales for Tesla to go red.

dragontamer 4y ago

I'm pretty sure the stock will continue to decline. But still, there's a big issue of risk vs reward at play here. A short-seller would have made a significant amount of money if they've been short since $300 (or higher). There's always a time to "Collect your chips off the table". It always feels too early when you do so. But you gotta run the calculation: is staying in and possibly losing everything worth the risk? If so, how much reward do you think you're gonna make? By staying short, the full $190 / share gains from this trade remains at risk. And for what? The chance that it maybe turns into $230 / share gains? There's definitely a risk/reward calculation at play here. If you're really certain about that $70 price point coming up, then yeah, hold onto the shorts a bit longer. But anyone who has watched a 70% collapse of a stock that they sold short really should be considering just taking profits. How much further do you think it really can fall? ---- If you're certain to hold onto those shorts... maybe buy a couple of call options to lock in your wins, at the cost of theta-decay. There's other ways to hedge and "lock in" some of the winnings. But no trader should be the idiot who "bets it all on black" over-and-over-and-over again. You gotta take your chips off the table at some point, and today is a good day as any other day.

bb88 4y ago
> How much further do you think it really can fall? Well that's a great question. If you think Tesla is close to bankruptcy than the answer is: all the way down. But even so, downward pressure can create more downward pressure if Tesla has been over leveraged to obtain loans or to buy Twitter. Let's say Tesla stock was used as collateral for loans, with a promise that the stock won't go below $100, e.g. If it does go below $100 then someone is on the hook to provide cash collateral to offset the loss of the value of the stock. The primary way to do that is to sell Tesla stock to raise cash. That creates further downward pressure on the stock price. Or Tesla might be lying about something materially related to the stock price, which you've discovered and are pointing out to the WSJ, because you know, you have a reporter over there on speed dial (not everyone does, of course, but if your trades are $100M at a time then you should). Or maybe you're betting that Elon is going to self implode and jump out of the window, or murdered because of shady dealings with Russia. Sure that's long odds maybe, but not entirely unheard of. Derogatory information about a company or it's CEO might be a gamble that's worth taking. I'm sure there's a lot of dirt in Fortune 500 companies that is waiting to be found with the right team of private investigators.
- dragontamer 4y ago
  > Well that's a great question. If you think Tesla is close to bankruptcy than the answer is: all the way down. Exactly. And what is that value? $0. If you're someone who has short-sold at $300, that means you've already achieved over 60% of the possible value you can extract (even if TSLA goes _completely_ bankrupt). Or in other words, you've made $200, and the worst it could _possibly_ be for TSLA is a decline to $0, the remaining $110 or so of the stock price. Its... a bit of an unfavorable odds, don't you think? ------------ Don't get me wrong. I think there's some sketchy as hell things going on to TSLA's books. CFOs were running away from this company for years. I do think that a long-term, hidden fraud case, could be possible... which would lead to a bankruptcy-like $0 (or maybe $1 to $2) valuation. But I have no such evidence on this. Its purely speculative, based on how the CFOs of TSLA have acted, as well as the weird nepotism moves of Elon Musk + Solar City (Kimball Musk). A lot of smoke, but without proof, its a rather risky trade.