Is Tesla TOAST ?

[GRG55]

Re: Is Tesla TOAST ?

Make your bets....please

I'm betting no conventional car company can afford to buy Tesla at anything close to current valuations.
I'm betting no conventional technology company will either.
I'm betting Tesla cannot generate enough cash flow to make the development investments it really needs to make to maintain its product line over time, and that problem gets worse if they expand models. The 'S' is already long in the tooth.
I'm betting Elon Musk's ego eventually destroys the company, like so many other brilliant but petulant entrepreneurs I have seen before.

[touchring]

Re: Is Tesla TOAST ?

I'm betting no conventional car company can afford to buy Tesla at anything close to current valuations.
I'm betting no conventional technology company will either.
I'm betting Tesla cannot generate enough cash flow to make the development investments it really needs to make to maintain its product line over time, and that problem gets worse if they expand models. The 'S' is already long in the tooth.
I'm betting Elon Musk's ego eventually destroys the company, like so many other brilliant but petulant entrepreneurs I have seen before.

I think Tesla's fate isn't sealed yet. The car industry as we know may not exist in 20 year's time when self-driving technology is advanced enough for many people to give up their cars. When that day comes, technology will win and not the lower cost provider. Big car manufacturers like GM and Toyota will face existential crisis because their business model is dependent on economies of scale.

It's just like Virzoom, too expensive for consumers to own, but gyms can afford to buy them because they rent them out.

[Southernguy]

Re: Is Tesla TOAST ?

I'm betting no conventional car company can afford to buy Tesla at anything close to current valuations.
I'm betting no conventional technology company will either.
I'm betting Tesla cannot generate enough cash flow to make the development investments it really needs to make to maintain its product line over time, and that problem gets worse if they expand models. The 'S' is already long in the tooth.
I'm betting Elon Musk's ego eventually destroys the company, like so many other brilliant but petulant entrepreneurs I have seen before.

In any case I hope I can be here in 2023 and check the results. How many people do you know are waiting for affordable ev to appear to buy a new car? My brother (an ev fan who build one several years ago) and I are. Here, with very few official perks things shall be slower.

[vt]

Re: Is Tesla TOAST ?

I'm waiting for a self driving EV:-)

[dcarrigg]

Re: Is Tesla TOAST ?

I'm betting no conventional car company can afford to buy Tesla at anything close to current valuations.
I'm betting no conventional technology company will either.
I'm betting Tesla cannot generate enough cash flow to make the development investments it really needs to make to maintain its product line over time, and that problem gets worse if they expand models. The 'S' is already long in the tooth.
I'm betting Elon Musk's ego eventually destroys the company, like so many other brilliant but petulant entrepreneurs I have seen before.

FWIW, I still think that the Occam's Razor explanation for the latest quarter's SG&A numbers is fraud. It's possible it's not. But if it weren't, they performed a miracle, and it's not like Tesla to perform miracles without bragging about them in the press.

[lakedaemonian]

Re: Is Tesla TOAST ?

I'm betting no conventional car company can afford to buy Tesla at anything close to current valuations.
I'm betting no conventional technology company will either.
I'm betting Tesla cannot generate enough cash flow to make the development investments it really needs to make to maintain its product line over time, and that problem gets worse if they expand models. The 'S' is already long in the tooth.
I'm betting Elon Musk's ego eventually destroys the company, like so many other brilliant but petulant entrepreneurs I have seen before.

Tech version of stagflation = techflation

Stagflation = inflation & unemployment too high combined with too low growth

Tesla Techflation = valuation inflation & platform refresh costs too high combined with too low growth in auto sector

They're caught in the deadzone

[GRG55]

Re: Is Tesla TOAST ?

In any case I hope I can be here in 2023 and check the results. How many people do you know are waiting for affordable ev to appear to buy a new car? My brother (an ev fan who build one several years ago) and I are. Here, with very few official perks things shall be slower.

I don't know anybody who is waiting for an affordable EV to appear to buy a new car. Those few I know that really want an "affordable" EV seem to be buying Nissan Leafs (especially popular with the staff in our Seattle office for some reason ). A couple I know have Tesla 3s on order. And all the rest of us are just going out and buying a replacement ICE vehicle when we need to. Some here would probably be horrified to find out what I use as my personal vehicle.

My own view is the totally autonomous "self-driving" car is a further off than the hype would suggest. But the light vehicle fleet in the USA and Canada turns over rapidly so every bit of technology improvement along that path can be adopted fairly rapidly.

[BK]

Re: Is Tesla TOAST ?

Of course not real automotive manufacturer is going to buy Tesla Motors. I've spoken to several Tesla Motors owners and generally seem like very bright people. But, on a whole the average Tesla owner seems to have no idea how an EV works or understand any of the technology behind an EV.

1. If you buy a car company you are on the hook for all of the liabilities and that includes the liability for all the fragile humans who drive and ride in the vehicles. Tesla has had some fairly spectacular and horrific crashes.
2. There is nothing cutting edge being done by Elon Musk at Tesla Motors. IF the Model S Motors is so revolutionary then why did Tesla switch to a Magnet Motor for the Model 3??? The reality is the AC Induction Motor has been used approximately 3-4 times in automotive history. 1. Steinmetz Electric 2. GM's EV 1, 3. Tesla Model S. I think Lucid is going to use the AC Induction and time will tell how that works out for them. Model 3's use the permament magnet motor like every other EV made today. Elon Musk is a complete fraud!

Every owner of a Tesla has told me that Elon Musk is going to "save the world" and I can only think crazy/dilusional/Jim Jones would have loved these people.

[dcarrigg]

Re: Is Tesla TOAST ?

Its market cap is like double Ford's. Even if the Model 3 succeeds beyond anyone's wildest expectations, that's a ludicrous valuation. You still might make money if you time it right. Bet realize you're buying into a frenzied foam pit of hype with colored strobe lights and air horns blaring over loud reggaeton music. In other words, it ain't about the cars.

[EJ]

Re: Is Tesla TOAST ?

Its market cap is like double Ford's. Even if the Model 3 succeeds beyond anyone's wildest expectations, that's a ludicrous valuation. You still might make money if you time it right. Bet realize you're buying into a frenzied foam pit of hype with colored strobe lights and air horns blaring over loud reggaeton music. In other words, it ain't about the cars.

Never short a cult.

[jk]

Re: Is Tesla TOAST ?

re: hedge fund closures and redemptions

It seems that 2018 is the year when investors have finally grown tired of underperforming while overpaying for that privilege. The redemption requests are coming in hot and heavy. What happens when you have redemptions? You have to sell stuff. This, combined with general de-leveraging is creating mayhem—particularly in sectors that have already underperformed over the past few years. It also creates strange outlier moves—the death spasms of an industry getting liquidated.
Take Tesla (TSLAQ – USA) for instance. It is up almost 40% since the low in October, has outperformed the NASDAQ 100 Index (QQQ – USA) by 5000bps and its FAANG cohort by nearly 6000bps. Sure, they beat Q3 estimates, even if the “earnings” quality was horrid. However, I think the real reason for this outperformance was that Tesla had become the short hedge to every fund manager’s long book.
-Got exposure to industrials with waning end-market demand? Hedge with Tesla—it is an auto OEM with a demand cliff.
-Got exposure to companies with substantial overseas business that will be impacted by a trade war? Hedge it with Tesla—its overseas business is a substantial portion of overall revenue, but is vaporizing as newer products are introduced in its top markets.
-Got exposure to companies with questionable accounting? Hedge with Tesla—no one’s books are worse.
-Worried one of your positions is a fraud? Hedge it with Tesla—it has more red flags than a May Day parade.
You get the point. While short interest was only about $10 billion at the peak, that number doesn’t include the massive implied short through outstanding puts—which are many times the entire float. What happens when people take down their overall exposure through redemptions? They take down their longs AND their shorts. In this case, they liquidate their puts—causing the never-ending melt-up we’ve seen at Tesla. We can be sure it’s not due to financial performance, as it seems that most Q4 metrics are tracking negatively compared to Q3.

http://adventuresincapitalism.com/20...nd-armageddon/

[jk]

Re: Is Tesla TOAST ?

re: the wave of hedge fund closures and redemptions

It seems that 2018 is the year when investors have finally grown tired of underperforming [hedge funds] while overpaying for that privilege. The redemption requests are coming in hot and heavy. What happens when you have redemptions? You have to sell stuff. This, combined with general de-leveraging is creating mayhem—particularly in sectors that have already underperformed over the past few years. It also creates strange outlier moves—the death spasms of an industry getting liquidated.

Take Tesla (TSLAQ – USA) for instance. It is up almost 40% since the low in October, has outperformed the NASDAQ 100 Index (QQQ – USA) by 5000bps and its FAANG cohort by nearly 6000bps. Sure, they beat Q3 estimates, even if the “earnings” quality was horrid. However, I think the real reason for this outperformance was that Tesla had become the short hedge to every fund manager’s long book.

-Got exposure to industrials with waning end-market demand? Hedge with Tesla—it is an auto OEM with a demand cliff.

-Got exposure to companies with substantial overseas business that will be impacted by a trade war? Hedge it with Tesla—its overseas business is a substantial portion of overall revenue, but is vaporizing as newer products are introduced in its top markets.

-Got exposure to companies with questionable accounting? Hedge with Tesla—no one’s books are worse.

-Worried one of your positions is a fraud? Hedge it with Tesla—it has more red flags than a May Day parade.

You get the point. While short interest was only about $10 billion at the peak, that number doesn’t include the massive implied short through outstanding puts—which are many times the entire float. What happens when people take down their overall exposure through redemptions? They take down their longs AND their shorts. In this case, they liquidate their puts—causing the never-ending melt-up we’ve seen at Tesla. We can be sure it’s not due to financial performance, as it seems that most Q4 metrics are tracking negatively compared to Q3.

http://adventuresincapitalism.com/20...nd-armageddon/

[GRG55]

Re: Is Tesla TOAST ?

Sounds like a good time to short the cult.

[EJ]

Re: Is Tesla TOAST ?

Sounds like a good time to short the cult.

The time to do so is at moment of the peak in cult leader's fame, public adoration, and appearance of invincibility. Say, when Musk makes Time Magazine Person of the Year.

Musk made the Time cover back in 2013, but only as among 100 influential people. For this indicator to be reliable as a tradable peak indicator he needs to be named Time's Person of the Year, maybe in 2019.

Then I'd be sorely tempted to short TSLA. By then the hedge funds will have thrown in the towel and put options won't be as outrageously expensive as they are today.

Besides the obvious historical reliability of that special recognition as a peak indicator, Musk on Time's cover will be a special case; it will doubly serve as an echo of the fate of his company's namesake.

Nikola Tesla made the cover of Time Magazine in 1931.

What happened after that.

I've always wondered whether Musk in choosing Tesla to name his company consciously or not sees in himself some of both of Nikola Tesla's genius and his fatal flaws, grandiosity chief among the latter.