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He left his price target unchanged at $900 a share
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Elon Musk is an enigma. Who thought Space X could really turn a commercial profit on the extremely high stakes business of space flight?...but they have.
tying yourself to the train track with a short sell while the Tesla express is thundering towards you isn't a good bet....not yet.
We've just made a move partially away from tech as we've had frankly silly growth in the last quarter and want to consolidate a little.
Question is though, will Elon Musk venture into widespread community power distribution, challenging the centralised generation/distribution model via Tesla or a new start-up company?
https://www.tesmanian.com/blogs/tesmanian-blog/tesla-tsla-elon-musk-chamath-palihapitiya
The Tesla stock bubble is fascinating and it will be interesting to see if the bubble bursts catastrophically or keeps growing.
Meanwhile Elon Musk challenges Johnny Depp to a cage fight....!!
Tesla are in a better position than anyway to exploit the properties of graphene into battery production and I think when they do their share price will rocket. An electric car battery cell that can be charged in 20 minutes without excess heat or damage will be the end of range anxiety and electric cars sales will rocket.
Short term - likely to be included in the S&P500, so yes trackers will need to buy up... however remember some will just synthesise with derivatives.
Long term business for Tesla will be in their car batteries, probably providing for other leading car manufactures who already have huge production lines and market know how.
Similarly, a positive annual report often causes the share price to fall, and a negative one for it to rise, depending on what the market had already priced in
Those short sellers are not inexperienced, do you want to bet your life savings against them?
The share price is already beyond the price where any dividend return can realistically be expected, do Tesla own the patents for all battery technology?
Tesla Tangible Book Value $6,081,000, market cap = $273b, ratio = 0.02
so tangible value of Tesla is priced 50 times higher than Mercedes.
I think companies like Mercedes will survive, wherever they get batteries from. Tesla is way behind with all its plans, and is poor at manufacturing cars
Where Tesla could unfold is in the scaling up of reliable high quality production. The transition from boutique to household staple will be challenging, but Apple did it with a luxury device.
Short selling isn't for me and even though Tesla looks such a likely candidate for a short sell it's a risky game to play with retirement funds. I would only play with short selling and short term trading with money I could afford to lose completely, a few £K pocket money, no more.
Many of the short sellers have may have lost a lot of money already by trying to short sell earlier in the year. There was a lot of noise that Tesla was overpriced in February but the stock has rocketed even further. The bubble will burst but trying to calculate when is a risky business and you need a lot of cash reserves and nerves of steel to hold your position as the price goes up without caving in and going bust.
The tech fund I invest in is Polar Capital Global Technology and as far as I'm aware they have no Tesla stock in their portfolio, their investment model appears to be to let the initial startup bubble burst then pick up tech stock as companies are about to transition and mature. Baillie Gifford hold 7% of their American fund in Tesla, which I am also invested in, not heavily yet but I plan to add more money over the long term regardless of their current position with Tesla.
Although Apple have managed to get the masses to buy a high price luxury phone, the world over, I wouldn't be betting on Tesla to do the same...but you never know. Only just a few years ago I would have laughed at the prospect of space rocket modules being able to fall back to earth at supersonic speeds, be slowed down and then guided to land simultaneously on launch pads so they could be reused.
Long range EV or hydrogen haulage trucks will be the next real game changer to reduce road traffic emissions.
The bodywork on Tesla cars has hundreds of parts compared to just dozens in other vehicles. People have been waiting over a year to get theirs fixed after a crash, the backlog is insane. Insurance therefore is crazy expensive (they don't want open claims that long), if you can find insurance now at all. Courtesy cars provided by the insurer only given for 3 months or so is leaving owners having to purchase another car whilst their ££ car is sat on the drive.
No dealerships etc.
If anything their model seems anti-expansion.
I know f#ck all about shares mind, but in the electronics industry battery technology lags way behind everything else ... so I can see the potential for a new battery made on that scale making a lot of money.
I saw loads of stuff years back explaining how Tesla design for manufacturing was poor, and they have had endless delays in setting up production lines, even having to manually build some cars, output has been catastrophically below plans at many times
i.e. they already have trouble scaling up
Apple were present at the start of a new market, and grew in size as the market grew.
Tesla is 120 years late for car manufacturing
I just did a quick search,
this one says tesla is not the biggest EV battery maker:
https://www.reuters.com/article/us-autos-batteries-factbox/factbox-the-worlds-biggest-electric-vehicle-battery-makers-idUSKBN1Y02JG#:~:text=China's%20Contemporary%20Amperex%20Technology%20(CATL,and%20Honda%20Motor%20Co%20(7267.
the Tesla site says the gigafactory is intended to supply all of Tesla's batteries
Who is supplying the other car makers who currently have 99.2% market share in making and selling cars?
Hydrogen is the future. Battery power might work in the UK but the distances here are relatively short. For the kind of distances in a lot of other countries, it's a non starter - especially for freight.
Hydrogen would solve a lot of other problems. There are massive problems with the supply of lithium and cobalt for batteries.
Hydrogen also solves the problem of how to store intermittent energy from renewables like solar and wind. If we have big banks of battery on the electricity network, it will be expensive as they will need to be replaced on a regular basis. Batteries have a finite life span. If you get three years out of a phone battery, you are doing very well. The ones they use on the mains will probably have better lifespan that that, but it will still be a huge issue. It will be very expensive with the lithium and cobalt supply issue
Hydrogen would also mean that you wouldn't need to spend vast amounts of money on installing millions of car charging points, and even more on top upgrading the mains network to cope with the high currents.
Batteries might be part of the mix, but hydrogen is going to be the backbone of transport - especially as it will work in countries without electricity infrastructure.
For that reason, it looks to me that Tesla is grossly overvalued.
- Toyota’s long term debt = US$185 billion
- Ford’s long term debt = US$154 billion
- GM’s long term debt = US$100 billion ( + a US$14 billion unpaid bailout loan)
- Daimler’s long term debt = US$106 billion
- BMW’s long term debt = US$127 billion
Tesla's debt is US$13 billion**these figure are from 2019
That advantage may count for nothing if they cannot get mass manufacturing on a global scale sorted.
Elon Musk has already stated that Tesla's energy business ambitions will see that side of the business be bigger than it's car business. That's the bet the venture capitalist's are waging and that is what may keep the share price up. The energy business is old and stale and ripe for a challenging disruptor.
Plus they have their AI technology chip reported to be 4 years ahead of all competition by Ark Investments.
So, to answer you opening question:
Sell Tesla?
Yes - probably now or soon if you hold stock purchased at June 2020 or earlier prices, to lock in a handsome profit. Yes the stock may go on to higher prices but a profit is guaranteed today.
No - if you plan to fund a short sell now, especially with retirement funds. You could end up paying interest and lose out if the price doesn't come down in a reasonable time frame.
Daimler has €106m in liabilities, but €302m in assets
Tesla has $27b liabilities, and $34b assets
not such a rosy picture eh?
I'm doing neither, you asked the question. Why?
The theory is that if the bubble bursts for any of Tesla, Apple, Facebook, google, it could set off a domino effect with the other bubbles
Personally I don't see it happening btw
Daimler has €106m in liabilities, but €302m in assets, total = +€196b
Market cap = €43b
so you're buying €54 worth of Mercedes for €40
Tesla has $27b liabilities, and $34b assets total = +$7b
Market cap = $274b
so you're buying $53 worth of Tesla for $1500
I suppose my motivation is that I want normal market forces to resume, so I am pointing out how big this bubble is
Its an interesting topic, and acts as stand out test case in terms of how the US markets and investors behave.
The big 5 tech giants (Facebook, Amazon, Apple, Microsoft, Google) are driving the S&P500. Did you know that YTD those 5 have returned +35%, and the other 495 have delivered -5%... the weighted avg nets off to +2%.
The US is an asset bubble, where many people's wealth is entirely dependent on over inflated asset prices which have very little relationship with actual earnings of stock. The Fed can only pump in so much cash to prop it up... once the market becomes unresponsive and immune to QE it will stall and a huge correction will occur. Might be a month, might be 5-10 years... but it will happen.
The shift to conserving price rather than growth has already begun, just look at current gold and raw material prices.