[pibaker]

> In the long term

In case anyone is wondering how Tesla’s stock price remain wildly detached from its business reality, keep these four words in mind. If you can convince people that anything about you and your business has to be evaluated on a literally astronomical timescale, you can justify any valuation you desire, because your believers will give you infinite time to realize their investment returns. It has nothing to do with business. They are selling you a vision — which can also come in a pill form, labeled "salvia" and sold at gas stations.

I still see people say the cybertruck is built for mars environments, conveniently ignoring the vast technological and economical barriers stopping us from driving commercially produced vehicles on mars. This space data center thing is the same deal. It doesn't matter how long it will take to solve the technical issues with cooling, radiation, maintenance. It doesn't matter if it will make economical sense or not. It doesn't matter if spacex will be the one to actually do it. You just have to believe, and give them some time — a lot of time, so much time that a monkey can type out Hamlet and type it out again backwards.

See also the buffoonery coming out of Bay Area "effective altruist" and "longtermism" communities.

[pveierland]

I fully agree on the reality distortions and valuation chaos surrounding Tesla. This does also follow from the company being very volatile and chaotic, which becomes harder to price. How do you accurately price in e.g. Optimus - it seems really hard to tell at this point - which I guess is also one of the motivators for these strategies.

However, in this particular trajectory, SpaceX did build the rockets and did build Starlink which is now the best global-scale wireless communication network for many use-cases. Stretching this trajectory to scale up the technology to facilitate in-space computing is vastly more grounded than Shakespearean monkeys.

[philipallstar]

All share price fundamentals are based on the long term. Short term trading is why some shares are very briefly high or low.

[notahacker]

All share price fundamentals based on the long term have this pesky thing called discount rate which means your [hypothetical] earnings from something expected to happen in 2050 get weighted a lot lower than your 2028 earnings and your 2100 earnings barely figure in it at all though.

That's the case on a pure "I could invest my money in something that makes a bigger profit now, and use that money to buy shares in the longer term bet afterwards" basis, but is even more the case when you factor in uncertainty. And "SpaceX's 2026 near monopoly of launch and the 2026 datacentre build rush will still be relevant once we're far enough into the future for inference chips to not need regular replacement and orbital megastructures to be cost competitive with ground ones due to the amount of orbital recycling going on" is pretty uncertain...

[philipallstar]

I doubt anyone is doing earnings analysis 75 years out. It'll be "this is our best guess of the size of the market over time, and here's what percentage of the market SpaceX will get, factoring in the US taxpayer being a large funder of space and preferring a local company."

The large variance is in the projected market size, but I can see why people might be optimistic. Especially given SpaceX's success in Falcon 9 launches, gradually stealing stats away from the record-holders, who have been mostly Russia/USSR-based[0].

[0] https://spacestatsonline.com/rockets/most-launched-rockets

[notahacker]

Well yes, nobody doing earnings analysis 75 years out is my point. We're downthread of someone pointing out that most mass and energy is outside earth so in the long run we'll run out if we don't rely on space[1].

That sort of long run probably has even longer timelines than 75 years, and that's an argument which carries almost zero weight to an investor (particularly relative to the one SpaceX is actually making which is using their launch monopoly to make massive profits meeting 2020s inference compute demand) because by the time it happens, assuming it does, the space market is unrecognisable and they've missed a whole bunch of other hype cycles. The bull case for SpaceX depends a lot on what they deliver by the mid-late 2030s being more than expected rather than less and essentially not at all on the constraints and challenges of next century.

[1]I also hear this thesis every week from my own CTO, but much as some VCs like the passion it's not why people fund us...

[sigmoid10]

Well, at least that is what they teach you in college when you learn about the efficient market hypothesis. In reality, investors are getting less rational every year. The modern stock market has become pretty much decoupled from reality.

[red75prime]

"Everyone is crazy" is a well-measured stance that I can respect. /s

On a serious note, if you think that everyone else loses contact with reality, it's a signal to check and recheck your assumptions.

[sigmoid10]

Maybe check your own knowledge on the topic you're commenting on before talking down on others. Musk for example has famously said himself on several occasions that he thinks Tesla is overvalued. But any company with a >1000x P/E ratio is less screaming "sensible investment" and more "get on the train before it moons" meme-stock. Regardless, none of this is rational anymore. It is mostly hype (and a little bit of insiders rug-pulling each other).

[red75prime]

"This company is overvalued" and "The market is not rational anymore" are a bit different claims.

One of the assumptions I mentioned is "significant overhaul of economy is impossible."

[robocat]

> believers

If it were only retail investors, your assumptions could make sense.

However plenty of the share ownership is institutional investors. Most of them care a bit more about fundamentals. (I'm ignoring passive investors just using indexes).

[munksbeer]

A lot of institutional investors get caught out all the time when they make mistakes about the fundamentals.

[levanten]

They also care about networking and connections.

[rf15]

Secondary effects can also make this a good investment decision: if you have enough other delusional people to buy into it, you still gain from it, even if you believe it's bullshit.

[madaxe_again]

I love how in today’s quarter-based world a decade is now a “literally astronomical timescale”.