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Tesla races past $100B in market valuation

reuters.com

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Re: Tesla races past $100B in market valuation

#21

Post by beamatronic »

JohnJamesRambo wrote: post #4
nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

Maybe this is just what the top of bubbles feels like. I can’t explain the stock price either, other than human irrational exuberance.

Is your taxi driver or your hairdresser talking about buying TSLA themselves? That’s how you know.

Re: Tesla races past $100B in market valuation

#22

Post by mushufasa »

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

probably a mix of

a) hype. stock market actually like a beauty contest[0] where what matters is other's perceptions. it's a secondary market. a lot of investors, both sophisticated and not, think tesla is beautiful.

b) expectations of future technology. Cruise just announced a self-driving taxi initiative. If you think tesla has as-good or better tech, you might now think they have access to that finally manifesting market. Better unit economics than for human car sales.

c) track record of meeting/beating expectations. By now tesla has outlived the shorts. Beyond shedding off many of the shorts that were exerting downward pressure on price, elon musk's mantra of "innovation as his competitive moat" has outlived the doubters among traditional investors. Large public equity investors originally were very skeptical of that fuzzy idea of a moat, especially considering stunts like when Elon released a lot of the electric driving patents for free (!). But a decade later, nothing else on the market has come close to Tesla's product despite several also-ran attempts.

It may also help to know that SpaceX is doing well, and Elon has shown willingness to personally bail out his companies during moments of trouble. This decreases downside risk.

[0] keynes' famous essay https://en.wikipedia.org/wiki/Keynesian_beauty_contest

Re: Tesla races past $100B in market valuation

#25

Post by sjg007 »

I dunno. I want a Tesla as my next car and a lot of folks have said similarly. I am tired of getting gas every 2 weeks or so and I am really tired of oil changes. If I can charge at home and at work that seems to be just right. I'd probably still have a bigger gas family hauler but day to day a Tesla.

Re: Tesla races past $100B in market valuation

#26

Post by vardump »

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

Who'd be credible competitors to Tesla? Old ICE companies are still struggling to even compete with Tesla's 2012 Model S.

It might be that if anyone beats Tesla, it'd be some of the tech giants. Like Apple.

Re: Tesla races past $100B in market valuation

#27

Post by beamatronic »

cma wrote: post #19
TheGallopedHigh wrote: post #6

Earlier quoted context omitted.

Why would they do that?

Since they want to be their own insurance company it seems like it could be a valuable thing to have when pricing out a policy.

That’s genius. Create a risk profile for each identifiable vehicle.

Re: Tesla races past $100B in market valuation

#28

Post by himinlomax »

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

I can see one good reason: the rest of the auto industry is playing catch up with Tesla. Nobody else afaik is even able to do over the air updates (reliable updates, that is). They have a charging network, the competition basically doesn't and can't seem to get their act together, and that's not even really a technological issue.

Re: Tesla races past $100B in market valuation

#29

Post by nabla9 »

totalZero wrote: post #5

All the people who had the balls to sell TSLA short have already gotten hurt in the come-up, and although everyone thinks this market as a whole is going to correct soon, nobody wants to take the risk of calling a top. So yeah, expect the name with 14%+ short interest to keep rallying in this market, for the near term. One thing I do wonder about is how the roll-off of tax credits will affect their US sales.

Is there any hard data showing that someone significant amount of short selling is caused by speculation and it's not hedging?

Short selling is used used as a hedge against downside risk of a long position. It's reasonable strategy for big investors who have huge stake on Tesla to short sell to manage the risk.

>A "short sell against the box" is also known as "shorting against the box." Sellers use this technique when they do not actually want to close out their position on a stock. The strategy is generally used by investors who believe the stock is due for a fall in price, but do not wish to sell because they believe the fall is temporary and the stock will rebound quickly.

https://www.investopedia.com/terms/s/sellagainstthebox.asp

Re: Tesla races past $100B in market valuation

#30

Post by fjabre »

nerdkid93 wrote: post #2

I for the life of me cannot figure out what could possibly justify this valuation for Tesla. Sure, their cars are pretty great, they have a ravid fanbase, and they have a pretty entertaining CEO who excels at driving interest in the company. They would need to execute perfectly and deliver more cars to customers than Volkswagen in a few years to justify such a valuation right now, and I just don't see that happening…

Musk is a disrupter and he is disrupting this industry turning it on its head. We've been stuck in the same boring recycled car designs and concepts for decades and here comes Elon with the promise of self driving flying cars on their way to Mars with SpaceX in the background making incredible strides forward everyday.

To be honest I think this valuation is too low. Elon continues to eat the competition's lunch on a daily basis with new ideas and approaches to just about every industry he touches. The competition will be left in the dust once he straps some rockets on his new model Ts.

All the incumbents are slow, fat, and happy with a lot of inertia and management layers from decades of success. They became too fat and too comfortable. They all look old fashioned by comparison to what Musk is producing.

EDIT: Top comment is disparaging Musk's success here. I think in all honesty there are a lot of people who are envious of Musk so they will always have something negative to say when he or his companies are in the news.

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