Nerijus Mačiulis on InvestingEconomist, investor, teacher, runner, diver.Some time ago
A Comprehensive summary on how not only Tesla’s stock price but also Musk’s promises are disconnect from reality: “With the cost of making batteries stubbornly high, Tesla has relied on stock and bond markets, along with government subsidies, to keep afloat. The company earned a $16-million profit in the first quarter this year selling zero emission air pollution credits to other automakers. Musk cut worker pay and bonuses in this year’s second quarter, which will also help profits. Unable to count on making money from selling cars, Musk has relied on other strands to weave his growth narrative. Last year he predicted Tesla would have 1 million driverless robotaxis on the road by the end of 2020. Autonomous car experts were, to be kind, skeptical. With six months to go Musk has stopped tweeting about it. In 2017, he said Tesla would begin producing electric semi-trucks in 2019. Thus far there is no factory, and beyond a couple of prototypes, there are no trucks. Four years ago, he introduced a product called a solar roof — solar cells integrated into attractive roof tiles to generate electricity for the home. In July 2019, he tweeted Tesla was “spooling up production rapidly” to manufacture 1,000 roofs a week by the end of 2019. Apart from some prototype sites, a commercial product business does not exist, and the government-subsidized Buffalo, N.Y., factory where the roofs are supposed to be made has yet to spool. Early this month, he said, “we will have the basic functionality” for driverless cars that can roam on their own anywhere in the world — by the end of this year. He did not define “basic functionality.” No industry expert outside Tesla has expressed a belief the company is anywhere close to deploying driverless cars. In fact, a court in Munich, Germany, this month ruled Tesla misleads customers into believing the company’s Autopilot driver-assist technology is more capable than in fact it is. The court banned Tesla from including “full potential for self autonomous driving” and “Autopilot inclusive” in its German advertising. Korea officials are reportedly considering a similar move. Musk’s unfulfilled claims about Tesla are part of a broader pattern. Another Musk company, Neuralink, is developing computer chips to be implanted in human brains. Musk has said the chip will “solve” brain and spine injuries, and “address epilepsy,” too, in the “near term.” He’s released no data to support such claims, which remain theoretical. Publicly announced plans to build networks of transportation tunnels through Musk’s Boring Co. in Chicago, the Northeast Corridor and elsewhere have been abandoned. Boring Co. is finishing a project that will provide paid rides in Tesla cars through a 4,500-foot tunnel near the Las Vegas Strip.” Full article by Russ Mitchell: https://www.latimes.com/business/story/2020-07-22/why-the-stock-market-is-so-high-and-tesla-even-higher
Tesla's insane stock price makes sense in a market gone mad
www.latimes.com

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Justas JanauskasCEO @ Qoorio, Co-Founder @ Vinted, Angel Investor
Great article, read it, thanks for sharing!
9 months ago
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Thomas DesimpelAngel Investor, Polyglot, Real Estate Investor
Yes Tesla & Ellon Musk...dangerous subject...as you have believers and no believers....it remembers the 'short short' story of 2 weeks ago...🤔👇... Brilliant marketing...and although Ellon Musk always have to some 🐇🐰's (plural) outside his head... So don't short...unless you want to end with the short shorters👇🙈
9 months ago
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Thomas DesimpelAngel Investor, Polyglot, Real Estate Investor
9 months ago
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Thomas DesimpelAngel Investor, Polyglot, Real Estate Investor
However... In my humble opinion...gravity (no pun intended) is stronger /will land Tesla extra terrestra valuations... healthy financials do matter at the long end... with a second Covid wave coming... I wouldn't go long...(neither go short as you can't beat this market genius)...just a bit of patience... And you will probably buy Tesla with more down to earth (no pun intended) prices...
9 months ago
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Thomas DesimpelAngel Investor, Polyglot, Real Estate Investor
Scott McNeely was the CEO of Sun Microsystems, one of the darlings of that bubble. At its peak his stock hit valuation of ten-times revenues. A couple of years afterward he had this to say about that time (via Bloomberg): At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were you thinking?
9 months ago
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Mangirdas AdomaitisArtificial inteligence, Data science
Thanks for sharing. Good points for underdelivering on promises. I agree Tesla valuation is high. But: 1️⃣ Tesla makes best EV cars for affordable price. For 50k customers basically get a sport car. Even if competitors manage to produce similar range cars(still none available), competing EVs are much slower. 2️⃣ Tesla’s customers love the cars. It is cool to own Tesla. Similar to Apple products. 3️⃣ Tesla and Waymo are closest to do full self-driving. This is incredible potential for stock to go higher. I think most believe full self driving will eventually happen and Tesla will be there first. 4️⃣ Tesla goes after generating recurring revenue. Insurance product, charging stations, entertainment center subscription. End goal is robo-taxis. 5️⃣ Musk is not alone. Tesla has best talent to deliver on it’s promises. Q2 financials are out. Even with 6weeks of closed factories they beat expectations. Earnings per share $2.18 vs $0.03 expected. GAAP +$104m.
9 months ago
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Nerijus MačiulisEconomist, investor, teacher, runner, diver.
Mangirdas, look deeper into their Q2 report. Its revenues have been flat for almost 2 years, and all its profits came not from selling cars, but selling carbon emissions credits (and frontloading all of them into Q2). It is losing market share in almost all markets, it was its last chance to report profit, it’s over.
9 months ago
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Nerijus Mačiulis on InvestingEconomist, investor, teacher, runner, diver.Some time ago
Two of my favourite bubbles have merged! :) Bitcoin transactions consume close to 100TWh energy per year, most of it produced in coal-fired plants. It will be harder for Musk to pretend it is all about saving the planet. But it is not completely unexpected - losing market shares, revenues stagnate, can’t make profit selling cars, what is there left to do? Speculate in cryptocurrencies, of course.
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Nerijus Mačiulis on InvestingEconomist, investor, teacher, runner, diver.Some time ago
Battery electric vehicle market shares in EU. One producer is losing market shares faaast...

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Erikas MališauskasJack of all trades, master of design 🎨
Are you shorting Tesla then?
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