[prolly97]

So this guy was pretty active in the TeslaQ community. They believed Tesla to be (extremely) overvalued in 2017-2019 on the grounds that they would never become profitable.. or something. They lost a lot of money shorting Tesla. https://www.reddit.com/r/teslamotors/comments/91aha1/montana...

Anyways, seems like he's keeping the grudge alive.

They were right about a couple of things back then. But majorly wrong in aggregate and with respect to the outcome.

[dozerly]

To be fair, they were overvalued in those days as well. Just because the on-paper value went up doesn’t make their statements false, it just means we’ve continued the charade.

[satvikpendem]

Or maybe that's just what value is, what someone else would pay for something.

[zygology]

and it turns out people can be convinced to overpay for hot air and "futurism"

does that make it truly valuable?

[prolly97]

When I followed TeslaQ, the valuation was around 60b. Today Tesla has 39b in accumulated retained earning (pr latest 10k, not q).

If the thesis was that Tesla would be unable to create a system that would churn out cars that could be sold at scale with an economic surplus, then we have to reject it.

[bryanlarsen]

And Elon has also acknowledged that they came within a hair of going bankrupt during that model 3 production ramp up. Tesla was either going to go bankrupt or become quite valuable, and their proper valuation would have been based on the unknowable odds of the two scenarios. Maybe it wa a 1% chance of going bankrupt, maybe it was 99%.

[rich_sasha]

I mean. Sure. Value is ultimately what someone will pay for something, and the name of the game is to buy low and sell high. People who bought TSLA made money.

The point is, it's completely irrational - like winning lottery 3x in a row. Tesla's PE ratio, depending on how you look at it, something like 200-350. That means that if nothing changes, the expected return of earnings on your investment is 0.3-0.5%. You'll struggle to find a riskless fixed income instrument paying this little.

Ok, so clearly that's not why people buy this. They hope the earnings will increase, and/or the value of the stock. Seeing as you can lock in 4.5% riskless yield for 10 years, you'd hope for at least this much from a stock - realistically much more. Let's call it 7% - still low methinks but so be it. That's 14-25x more than it earns now.

You could say you don't care about earnings - just about price increase. Sure. But even to maintain the meagre PE ratio, earnings would have to double over 10 years. But realistically - this PE seems crazy for anything other than a crazy-high-growth stock. Which maybe Tesla is now but can't be forever. If it crawls down to a meagre 50x PE in 10 years time, to make your 7% return, earnings would still need to increase 8-14x in that time.

Maybe they can do it. They now sell, apparently, about 2% of all cars. No idea if total car production is stable; if it stays the same, and their margins stay the same, Tesla would need to increase their market share 8-14x too, to 16-28%. Maybe they can improve their margins and sell fewer cars, yet make more money - but typically increasing market share comes with lower profit margins as you lower the price to sell more stuff.

This is a veery bullish scenario. This is something an investment analyst for any other stock would need to sweat blood to argue. Yet this is what youre committing to when buying Tesla today.

Of course none of it really matters at the end of the day. Prices can levitate forever given enough believers. Wars can apparently be declared won with tweets with nothing to back them up - repeatedly. But if you think reality will come at some point, this is what is needed for Tesla to make sense as an investment.

[ggreer]

Tesla's valuation is high because investors expect them to sell goods & services other than cars, such as autonomous vehicle rides and humanoid robots for domestic & industrial use.

Who knows if they'll be able to pull it off, but an analysis that treats Tesla as a car company misses why investors have priced so much growth into the company.

[rich_sasha]

It remains the case even then that they have to create an insane amount of value, not merely to grow but to catch up to their current valuation.

But hey Pokémon cards and meme coins and NFTs don't generate any revenue and yet you can make money buying and selling. Up to a point typically.

[thisisit]

Market can remain irrational longer than you can remain solvent by Keynes says everything about what happened here.

But to say there’s a “grudge” seems to ignore another market fact “past results are not indicative of future results”. He might be right this time around for all you know. Is there anything you disagree apart from saying he is a Musk hater? Otherwise this comment is just unhelpful.

[general1465]

Grudge? I would say he was spot on. And he still is.

[l23k4]

How exactly do those numbers add up in your mind?

At around $60B valuation sometime in 2018, how was TeslaQ spot on?

Are you maybe claiming that Tesla is lying in their current disclosures?

[general1465]

So what is the reason of Tesla having greater valuation than Toyota while making 3 car models and you can't connect Apple Car / Android Auto into either ?

Do you think that Kathie Woods trying to memestock Tesla to 2000USD/share is normal?

Or do you think that promises like 20 million cars / year within 2030 while having extremely limited amount of models were ever achievable?

[l23k4]

Tesla has been able to demonstrate significant growth which Toyota hasn't.

>Do you think that Kathie Woods trying to memestock Tesla to 2000USD/share is normal?

Frankly, I don't see why any sane adult would care enough to have an opinion.

>Or do you think that promises like 20 million cars / year within 2030 while having extremely limited amount of models were ever achievable?

I doubt the timeline was, I don't see why the model range would really be an issue.

[piva00]

> Tesla has been able to demonstrate significant growth which Toyota hasn't.

That doesn't mean much when Toyota was already a behemoth company, it's much harder to grow when you are already enormous.

[bmink]

To be fair, few could have anticipated that Tesla and Musk would be unaffected by valid scrutiny and criticism.

This is also addressed in the article:

> E. DON’T TRY TO SHORT SPACEX!!

> Elon Musk is a cult figure. Moreover, he has again and again proven himself immune to any meaningful market, legal, or regulatory scrutiny.

> Musk’s detractors have been correct about Tesla’s terrible fundamentals, its Full Self-Driving lies, its robotaxi fantasies, its shaky accounting. But when they have imagined these things might affect the stock price, they have been wrong.

[prolly97]

All that. But also he makes products so compelling that people who dislike him drives in them. "Fuck Elon" gotta be an all time top seller among bumper stickers.

> few could have anticipated that Tesla and Musk would be unaffected by valid scrutiny and criticism.

This almost implies that the scrutiny itself, and not the economic reality, should be the reason of Teslas demise or otherwise lesser financial outcome. Which seems a little self referential. If Elon doesn't wash his hands after peeing, and we pointed it out, that would be valid criticism. Ewww pee-hands. But the economic reality and aggregate outcome wouldn't change.

Like not even if the frontpage of WSJ, The Times or FT said "eww Elon pee-hands".

And that the thing - with enterprises of this scale, you could always nitpick and find some things that are suboptimal. But we gotta see it in proportion. 100mm accounting error in Tesla is not the same as a 100mm accounting error in the local McDonalds franchise. For one the error is magnitudes larger than their real economic footprint. For the other it's a rounding error.

TL;DR: I hear you - yes there is valid criticism. We just gotta see it in proportion. I like Teslas cars. But I don't like pee-hands.

[Zigurd]

Tesla isn't the technology, performance, luxury, infotainment, or value leader in EV's any longer. If you think the Germans know what the salute meant, and they stopped buying the cars, you can take the hint and have a lot of excellent choices.

There is no future prospect of explosive growth at Tesla any longer. That price to earnings ratio is not less absurd for having lasted this long.

[prolly97]

I hear you. And I believe disagreement is good. The markets were right back in 2018 - Tesla did manage to overcome their manufacturing struggles, and they did become profitable (now having retained earnings equal to ~65% of their then market cap).

The markets may well be wrong now. But they weren't back then, and the arguments haven't changed drastically.

Currently I'm sitting in Palo Alto. So I get to see a lot of Waymos and Cybercabs. I struggle to see how Waymo can compete on price if Tesla can keep production prices in the same realm as M3. And making a car is a pretty steep barrier to entry. So that edge may take some time to compete away.

[Zigurd]

You are living in a fantasy world where, for one thing, Tesla overcoming early production problems merits and astronomical P/E ratio. For another thing you think a non-functioning robotaxi service portends some future growth. Sleep in the backseat of an FSD Tesla if you dare.