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Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

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Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#201

Post by samatman »

bryanlarsen wrote: post #118
turbinerneiter wrote: post #15

Teslas price is just too high. I think they will be very successful and become a big, dominant car maker. But their price only makes sense if they end up being the only car maker left. That's not realistic. Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. For a while I was thinking that the battery play - becoming the number 1 battery supplier - will justify the…

The statement "Tesla market value is the same as everybody else put together" means either Tesla is expensive or everybody else is cheap or the statement is inaccurate. It's a little bit of all three. All other car companies are primarily debt financed rather than equity financed. Ford's market cap is $45B, but because it has $120B in debt which means it is worth $120B to it's bondholders and $45B to stockholders for…

If Tesla carves out an Apple-sized share of a market where all new passenger autos are EVs, its valuation is reasonable.

That's not an impossible outcome. I have no bets in this market, I'm strictly wait-and-see.

It's worth pointing out that Apple's valuation before it carved out that "Apple-sized share" was much, much lower.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#202

Post by riffraff »

agloeregrets wrote: post #158
cduzz wrote: post #104

Earlier quoted context omitted.

They bet the company on the OG roadster, S, and 3. They don't need to now. The 3 and Y are quite successful and quite profitable. The Truck, Semi, Roadster, Leaf Blower, and such are all distractions that aren't worth building until they've managed to establish much larger battery volumes and aren't selling every Y and 3 they make months before they make them. What's their run rate? They've got a ton of cash and viab…

They already are betting the company on a bunch of things. Their cash on hand is almost entirely debt. Additionally, they are merely meeting demand on Model 3 sales right now, don't forget that they spun down production rate on the 3/Y and are slowing China production as well. US charging networks are growing at a faster rate than Superchargers as well, so in roughly 2 years you are looking at a market where Electrif…

> he clearly wants little to do with Tesla

What makes you think that? I mean he sure has more fun with other stuff, and I don't follow him closely, but I didn't get the impression he hated the business.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#203

Post by TeMPOraL »

underwater wrote: post #199
bryanlarsen wrote: post #118

Earlier quoted context omitted.

The statement "Tesla market value is the same as everybody else put together" means either Tesla is expensive or everybody else is cheap or the statement is inaccurate. It's a little bit of all three. All other car companies are primarily debt financed rather than equity financed. Ford's market cap is $45B, but because it has $120B in debt which means it is worth $120B to it's bondholders and $45B to stockholders for…

iPhones are not a commodity product. At the moment Teslas are. How will Tesla convince consumers that their car, with a high profit margin, is worth it over a mature EV vehicle from Ford, BMW, etc.

As of right now, the most mature EVs are Teslas. They've established themselves as the gold standard of EVs. If anything, their main hurdle is still convincing consumers to buy EVs instead of ICE cars.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#204

Post by adflux »

TechBro8615 wrote: post #200
nunez wrote: post #194

Earlier quoted context omitted.

There are other things to consider too: - Tesla is achieving vertical integration to a degree no other mainstream auto OEM has achieved. The only other example of vertical integration to the extreme that I can think of is Koeneigsegg, and they are _very_ niche. This only helps Tesla make cheaper cars faster while collecting more margin per car. - Tesla's FSD marketing is highly contentious, but they are the only auto…

> Tesla is achieving vertical integration to a degree no other mainstream auto OEM has achieved This is crucial. It’s also why Tesla vs automakers reminds me of Apple iPhone vs existing cell phones. Sure making an electric car is “not that hard,” but because the carmakers didn’t take Tesla seriously for 10+ years, they now have a lot of catching up to do.

... isn't iPhone production outsourced? That's the opposite of vertical integration

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#205

Post by rllearneratwork »

turbinerneiter wrote: post #15

Teslas price is just too high. I think they will be very successful and become a big, dominant car maker. But their price only makes sense if they end up being the only car maker left. That's not realistic. Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. For a while I was thinking that the battery play - becoming the number 1 battery supplier - will justify the…

TSLA price may be justified in the future IFF they are not "just a car maker". I think with batteries, self-driving, something else?, they have a potential to be "more" than a "dominant car maker" but they are definitely not there yet. Will they ever be in such position? This is a bet some are willing to make. Personally, I invested in them near their IPO price right when Elon joined betting that they will become "the best EV maker". They achieved that. Will they achieve a much bigger bet of being "much more than a carmaker"? I am not yet comfortable making such bet. At least not at this cost.

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#206

Post by thow-01187 »

awb wrote: post #12

It sounds like the short thesis is centered around Tesla’s revenue coming in large part from regulatory credits. If you take out credits and crypto, they look like most other car manufacturers, struggling to make a profit. > As more automakers produce battery electric vehicles of their own, ostensibly fewer will need to purchase environmental regulatory credits from Tesla, which they have done in order to become comp…

Except...the traditional automakers are not struggling to make profit. Not even close. VW Group made $10B last year, during a pandemic year. Toyota $19B. FCA, with their public image of "also ran", $7B. BMW made $4.5B just last quarter.

Even minor automakers like Suzuki or Kia still make multiples of Tesla's profit without breaking a sweat

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#207

Post by ceejayoz »

Freestyler_3 wrote: post #110
jrsj wrote: post #100

Earlier quoted context omitted.

F150 Lightning being unveiled in a couple days is a good example of this. The F150 is the most popular vehicle in America & this has a good chance at being a pretty big success.

What crypto can I use at checkout?

You missed https://www.cnbc.com/2021/05/12/elon-musk-says-tesla-will-st... last week, I take it?

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#208

Post by touisteur »

Seanambers wrote: post #188
victor106 wrote: post #176

Earlier quoted context omitted.

> Tesla also has a really good profit margin. Their net profit margin is barely 2%.[1] I would not call it good by any stretch. By contrast Apple has a 25% net margin[2]. That is what I call good. [1] https://www.macrotrends.net/stocks/charts/TSLA/tesla/profit-... [2] https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-...

No, that is extraordinary. Are you really comparing a software and IT company with a car manufacturer?

Apple isn't a hardware company anymore?

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#209

Post by vasco »

damon_c wrote: post #183
ac29 wrote: post #144

Earlier quoted context omitted.

The point is, you can't lose an "unlimited" amount on a short, unless the underlying stock goes up by an "unlimited" amount.

Is there a max limit on how much a stock can go up?

There technically is now (but should be fixed soon), related to the way prices are stored in exchanges, BRK A is giving Nasdaq a hard time: https://markets.businessinsider.com/news/stocks/warren-buffe...

Re: Michael Burry of ‘The Big Short’ reveals a $530M bet against Tesla

#210

Post by bcrosby95 »

rubyn00bie wrote: post #98
turbinerneiter wrote: post #15

Teslas price is just too high. I think they will be very successful and become a big, dominant car maker. But their price only makes sense if they end up being the only car maker left. That's not realistic. Building an electric car is not that hard, especially if Tesla already did all the hard lifting for you. For a while I was thinking that the battery play - becoming the number 1 battery supplier - will justify the…

I'm not one to typically paraphrase billionaires, or think they're too connected to reality... but something I heard Mark Cuban say the other day was kind of "oh, shit that's true" moment for me. It was something to the affect of (I can't find the clip at the moment), "Back in 2010 we never thought we'd see a company hit $1 trillion. We never thought Apple or Amazon (et. al) would be able to continue their growth yea…

FWIW, the context of that was him defending wallstreetbets putting money into gamestop. His argument was that for most investors stocks just represent a store of value and little else - not some bullshit "owning part of a company" or even "fundamentals".

Part of his argument was that even companies like Apple have gone way beyond any valuation anyone would have thought reasonable as little as 10 years ago.

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