[sdhgaiojfsa]

OK, all of this is true, and concerning to me, despite that I would never buy a Tesla (when there are perfectly good used Nissan Leafs out there!). This is part of the reason I never invest in individual stocks: I have no tolerance for the risk, and no confidence that I can interpret all these facts to come up with a coherent estimate of whether the price will go up or down.

I guess my question right now is: if the situation is so dire, and the facts are all out there, why is TSLA not priced lower? Is it that there's enough dumb money holding/buying it propping up the price? Or are investors confident in Musk's ability to raise money and eventually turn the corner? Or something else entirely?

[catherinezng]

It takes a while for the public to react, just like it took a while for Enron and Theranos to be exposed. The market is irrational and the cult of Elon is strong - there’s too much hype, and it clouds people’s judgement.

Also fewer people know these facts than you might expect. I dug through Tesla’s SEC filings to find out, which are hundreds of pages of documents. It took me at least 10 hours of reading. Doing the due dilligence is time-consuming, and it’s really easy to just roll with a speculative opinion, as you’ve seen from many comments in this thread.

Based on my recent experiences seeing friends fundraise in YC, there is a lot of easy money going around, possibly because the low interest rate has pushed investors to look for more profitable investments through Silicon Valley, and money from Asia is pouring in.

Corporate debts is also at an all-time high - there is $6.3T in corporate debt and a cash-to-debt ratio of 12%, a record low. This means that companies are taking an unprecedented amount of risk, so maybe Tesla numbers are relatively less shocking in comparison, but I'm not optimistic it will end well. See junk bond defaults from the 80s.

By the way, Tesla bonds are considered junk bonds. They're officially labeled as B3, or "Highly speculative", and only one rating above "Substantial risks".

[wpietri]

> why is TSLA not priced lower?

I am not a fan, but there's no denying that Musk is a marketing genius. What percentage of people can even name the CEO of another car company? Plus he's not just selling a car; he's selling the future. As we see with Theranos, people really love the tech-as-future-magic story.

So much of the "dumb money/smart money" distinction is decided after the fact. If he pulls it off, the people who stuck it out will think themselves geniuses. But a ratings agency downgrade is a pretty good sign as to what professional investors make of it.

[spectrum1234]

If perfectly good means ugly :). Not that non EVs are much better though.

Model 3 is honestly the best looking car I have ever seen.

[mrguyorama]

Remember that car attractiveness is an opinion. Plenty of people (including me) feel the exact opposite, ie that the Model 3 is really derpy and dumb looking