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Morgan Stanley Slashes Worst-Case Price for Tesla to $10

bloomberg.com

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Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#61

Post by zaroth »

dd36 wrote: post #34
zaroth wrote: post #17

Even Jim Cramer (famous Tesla bear that he is) took issue with this “analysis”. > Setting a price target of $10 on a $200 stock "really is insane," the "Mad Money" host said. "How about $8? How about $12? Ten basically says, 'I want to get talked about. Let's talk about me.'" > "If he had done $47 would we have talked about him? No, but 10. Ten is right in your face," Cramer said on "Squawk on the Street." "I questio…

"However, Jonas kept his main price target for the stock at $230 and also has a bull-case forecast of $391"

That seems like strong supporting evidence that the $10 number is truly just to stir the pot to grab some headlines.

Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#62

Post by sjg007 »

nradov wrote: post #30
asaph wrote: post #18

Earlier quoted context omitted.

What about the guy played by Christian Bale in The Big Short[0]? Surely his models were not BS. [0] https://en.m.wikipedia.org/wiki/The_Big_Short_(film)

The thing is, it's impossible to tell the difference between clever and lucky even in retrospect. It's entirely possible that his models were BS. Even a broken clock is right twice per day.

They uncovered the large systemic threat with credit default swaps and made a bet.

Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#63

Post by sidcool »

I am growing really concerned about Tesla. It would suck really hard to see Tesla go bankrupt. Regardless of Elon's antiques, Tesla is important for the world. I personally relate to Tesla as a company that is struggling to survive and will make it big in the future.

Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#64

Post by throwawaymath »

Traster wrote: post #54
throwawaymath wrote: post #29

Earlier quoted context omitted.

I don't think I understand Cramer's argument. Is he asserting the new worst-case valuation is disingenuous because it's a "nice" number like 10? Does that mean he wouldn't be saying anything about it if it were 11 instead? That seems like just as subjective an assessment as the one he's currently making. A seemingly "random" looking number can be just as arbitrarily chosen as a neat looking one. It wouldn't surprise…

No, I think what he's saying is that the analysts are massively low-balling the valuation in order to gain attention. He compares it to $47, which would be low, but would represent only an 80% drop. $10 means TSLA has had 95% of its value wiped out, it's just absurd.

Ah, okay. That makes a little more sense to me.

Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#65

Post by reitzensteinm »

zaroth wrote: post #60
londons_explore wrote: post #50

Earlier quoted context omitted.

If Tesla had any spare cash, surely the logical thing for them to do is buy up those 9 percent yield bonds. If they are still solvent on bond payout day, they have made a tidy profit. If they are not, it doesn't matter!

If a company can provide return on capital greater than 9%, then spending their money to get a 9% return is not actually a good investment. It’s more complicated than this because it’s expected rate of return with some variance, and deploying additional side-lined cash doesn’t always achieve the same return as the previous dollars, etc. etc. But it comes down to this; if the best thing a company has to do with its do…

Parent was talking about parking spare cash, so buying up bonds and selling them as an alternative to something like a money market account. Although for Tesla, it would be an alternative to paying down their ABL.

A company that is cash flow positive and is looking for investment opportunities simply does not have bonds that yield 9%. Not in this millennium.

In any case, I don't think you really hit on the reason not to do this. If you park your working capital in your own bonds, they're going to take a haircut when times get even worse, which is exactly when you'd be liquidating more of them.

This could trivially turn in to an outright death spiral unless further funds can be raised from elsewhere. Probably not the bond market!

Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#66

Post by microtherion »

zaroth wrote: post #17

Even Jim Cramer (famous Tesla bear that he is) took issue with this “analysis”. > Setting a price target of $10 on a $200 stock "really is insane," the "Mad Money" host said. "How about $8? How about $12? Ten basically says, 'I want to get talked about. Let's talk about me.'" > "If he had done $47 would we have talked about him? No, but 10. Ten is right in your face," Cramer said on "Squawk on the Street." "I questio…

That analyst was not even very good at drumming up publicity. If he wanted to draw attention with a low price target, he should have picked… $4.20

Re: Morgan Stanley Slashes Worst-Case Price for Tesla to $10

#67

Post by nradov »

mruts wrote: post #58
devoply wrote: post #10

Earlier quoted context omitted.

Survivor-ship bias. Helluva way to make money.

I mean surely you don’t think Goldman Sachs, Morgan Stanley, JP Morgon, etc are still around because of survivorship bias? That is, everyone is just flipping coins and some people got lucky. If you think that’s true, the natural correlary is that all companies are just flipping coins.

Those firms make most of their profit most years from fees, not trading for their own accounts.
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