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Does this mean their stock will continue dropping? This is typically seen as a reaction to poor bookings/forwarding looking revenue, no?
by candiddevmike 4y ago
Does this mean their stock will continue dropping? This is typically seen as a reaction to poor bookings/forwarding looking revenue, no?
- qwytw 4y agoIt's getting increasingly clearer that Tesla won't be able to maintain both high margins and huge growth figures (despite the market believing they will be able to pull it off ,for some reason, because nothing else would have justified their extremely high valuation). So probably.
- cduzz 4y agoTesla seems to be making bets in huge volumes of cars sold. Possibly with their manufacturing decisions (a couple of really big plants making only a couple of varieties of models, with the models not changing much from year to year) they'll be driving unit costs way down such that they can reduce their sales price and keep their margins. If it's a bad bet they're sitting on a lot of stranded manufacturing assets. If it's a good bet they'll look pretty smart. Their unit prices have historically had pretty dynamic pricing both up and down, though in the past 18-24 months it's mostly been up.
- qwytw 4y agoI think they'll do fine. It's just that their peak valuation was unreasonably high. Basically many expected it to become the Apple of the automotive world (i.e. both huge volumes and much higher margins than anyone else) and that's probably unfeasible longterm due to a variety of reasons if their competitors eventually catch up. Obviously Tesla will still be valued at premium even compared to the legacy car makers who transitioned successfully to EV (and that makes sense from a financial perspective e.g. high debt levels and various other obligations). But it really made no sense for Tesla to have a higher market worth than all the other car manufacturers combined..
- dragontamer 4y agoNo guarantees. I'm of the opinion that TSLA's stock has largely dropped due to Elon Musk selling $40,000,000,000+ worth of stock over the last couple of years. Look at every major TSLA price drop. They coincide with Elon Musk's sells. Ex: Elon Musk's December 14th filing (https://www.sec.gov/Archives/edgar/data/1318605/000089924322038522/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/1318605/000089924322...), or Elon Musk's November 11th filing (https://www.sec.gov/Archives/edgar/data/1318605/000089924322035394/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/1318605/000089924322...), etc. etc. Feel free to search SEC's "EDGAR" database for Form 4, Tesla and Elon Musk. Now line these up with TSLA's stock price. What pattern do you see? When a "whale" sells huge amounts of stock, it just causes the price to drop. No matter what the fundamentals are. -------- Now "why" is Elon selling TSLA stock? Is it just to fund Twitter? Or is Elon cashing out of TSLA because he's losing confidence in it? Hard to say, its not like the man is very honest about his intentions (and he shouldn't be). But its always a good idea to keep an eye on the actions of the insiders and how they trade.
- rootusrootus 4y agoEven if there are correlating events, I think TSLA drops overall because it simply isn't worth 10-15x GM, Ford, or Toyota. It's just a car company in the end, and there's plenty of competition for making cars. There was a hype bubble around automation for a while, but the market won't likely stay irrational forever.
- downrightmike 4y agoTesla is now Toxic because their leadership has made it a point to be toxic. No one wants to deal with toxic people, especially shareholders.