Morgan Stanley Slashes Worst-Case Price for Tesla to $10
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Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#2This is such a non-information.
My worst-case price for Tesla is 0. However, Morgan Stanley's and my base case are significantly above 0.
If the price spread of your cases is multiple hundred US dollars, you really have to ask yourself if you're a useful analyst.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#3I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1].
What does $10/share represent? Why not $1 or $30? Genuinely curious about how this sort of calculation would be made and what the assumptions are.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#4> the electric car market
The size of the electric car market = the size of the car market now.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#5This is such a non-information. My worst-case price for Tesla is 0. However, Morgan Stanley's and my base case are significantly above 0. If the price spread of your cases is multiple hundred US dollars, you really have to ask yourself if you're a useful analyst.
The fact that Tesla is hard to price IS information though, The wide range reflects that it's a high-risk bet.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#6I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1]. What does $10/share represent? Why not $1 or $30? Genuinely curious abou…
If you are interested in such topics you can read up on valuations in a corporate finance book. With high growth companies like Tesla the majority of the valuation comes from expected future growth. If the expected growth changes the valuation can be dramatically different.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#7I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1]. What does $10/share represent? Why not $1 or $30? Genuinely curious abou…
It's all bullshit.
I once did some consulting for a very well known person in the financial services industry, a recognized leader in the field. As part of that work I got to see his financial "models". They took the form of the most incredibly complicated Excel spreadsheets I have ever encountered. They were real monsters with hundreds of thousands of rows, dozens of workbooks.
Being a software engineer, I wrote some code to reverse-engineer them. I wrote some VB to dump all the formulas as text, and then wrote a parser and code analyzer. The result was a real eye-opener. 90% of the formulas were dead code that didn't actually play into the results at all. The rest was still a mess, but when I started combing through it I discovered that even the live code didn't really matter to the results because at the end there was a "fudge factor" that the guy just set according to his gut feel about the market, and this was the main thing that determined the final result.
I didn't last long in that job.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#8I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1]. What does $10/share represent? Why not $1 or $30? Genuinely curious abou…
It's typically done by estimating future earnings that "belong" to shareholders, and then computing the current value of those earnings.
That's a dramatically over simplified explanation, though. Look up divided discount model (DDM) and discounted cash flows (DCF) for more info. There are other methods as well, but most rely on the same principals.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#9I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1]. What does $10/share represent? Why not $1 or $30? Genuinely curious abou…
It's all bullshit. I once did some consulting for a very well known person in the financial services industry, a recognized leader in the field. As part of that work I got to see his financial "models". They took the form of the most incredibly complicated Excel spreadsheets I have ever encountered. They were real monsters with hundreds of thousands of rows, dozens of workbooks. Being a software engineer, I wrote som…
I mean, that sounds like maybe a bad or overconfident analyst, but it's a bit extreme to declare it ALL BS because of one guy's bad models.
Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10
#10I wonder what underpins these sorts of targets. Tesla has 177.29 million shares outstanding [1]. At $10/share the market cap would only be $1.77 billion. At first blush that seems like a large discount on Tesla's assets (real estate, facilities, parts on hand, cash/cash equivalents). At the same time Tesla is servicing $12.7 billion in debt [1]. What does $10/share represent? Why not $1 or $30? Genuinely curious abou…
It's all bullshit. I once did some consulting for a very well known person in the financial services industry, a recognized leader in the field. As part of that work I got to see his financial "models". They took the form of the most incredibly complicated Excel spreadsheets I have ever encountered. They were real monsters with hundreds of thousands of rows, dozens of workbooks. Being a software engineer, I wrote som…
Survivor-ship bias. Helluva way to make money.