Elon Cleaning House

He could lose 99% of his wealth and still be worth a couple of billion. That's insane. Still, this is a wonderful story of comeuppance.

 

Eh. Even if he lost 99% of his money, he'd still be unfathomably wealthy.

People that rich don't go broke.

 

Yeah for sure. I’m not saying he’s gonna be Randolph and Mortimer Duke in Coming to America (and yes that reference is accurate lol), but he could still have the single greatest individual loss of wealth in history. Still a long way before that happens though. When I said a while back that Twitter could be his Waterloo because there didn’t appear to be an upside, I also said people that have bet against him in the past have usually lost that bet.
Next few months will be really interesting. Cathie Wood started buying back into Tesla on recent months, so at least someone sees a bottom.

 

One other unrelated but related point.
AMC, the other millennial “we can outsmart the market” stock, is down 85 percent now and still falling.
The point being, market fundamentals are back in play across the board, which is bad news for Elon. His entire ride has been on the backs of those who ignored or didn’t understand them. He’s not going to get that feee ride again any time soon.

 

Almost none of their wealth is actually liquid anyways, also its a Donald Trump situation where he'll always get loans to get back in the game given his government contract ties and what not.

 

Elon Musk calls out 'legacy media' and 'corporate journalism': 'We have only just begun'

 

dominoes. I wonder if this is the only deal that leveraged Tesla stock inflated values

Tesla’s Drop Puts $157 Million Korea Structured Products at Risk (msn.com)

This year’s unprecedented plunge in Tesla Inc. has put $157 million worth of related Korean structured products at risk of capital loss unless the electric-vehicle giant’s stock stages a dramatic recovery.

That’s the amount of principal that would be lost if Tesla shares fail to climb back to at least $134.5 per share, some 20% above its current level, before these so-called autocallables mature, according to Bloomberg calculations based on Korea Securities Depository data.

The products were sold to Korean retail investors, who have remained fiercely loyal to Tesla even amid its nearly 70% slide this year. Some were issued when Tesla traded above $300 per share, meaning a rebound of 60% or more is required before the autocallables reach maturity, typically within one or two years, or the principal will be forfeited.

 

How did Tesla become so stupidly overinflated? Musk Multiplier? If so, I guess the myth has been exposed. Did everyone else think that the majors wouldn't begin mass producing EV's when the tech was ready?

Tesla stock collapse sees ‘nightmare’ losses head towards $1 trillion (msn.com)

Tesla stock has crashed to its lowest level since August 2020, falling more than 20 per cent over the last seven days.

The stock collapse comes amid fears about production delays in China, as well as concerns that CEO Elon Musk has been distracted by his recent purchase of Twitter.

The losses leave the electric car maker’s market cap below $350 billion, having been valued above $1.23 trillion just over one year ago. To put this in context, this loss is more than the combined value of all other car makers globally.

On Tuesday alone, Tesla’s share price fell by more than $16, representing nearly $52 billion in market cap – more than Mr Musk paid for Twitter in October.

 

Was mediocre some good twists. First one was great.

 

Interesting perspective from Kevin Drum on Tesla stock

For those of you who have heard about Tesla's plummeting stock price and wonder what's going on, a quick look at their history might clear things up:

Tesla was not always a crazy unicorn stock. For ten years it just slowly burbled along. Then, for some reason, it exploded at the beginning of the pandemic.


Why? It's something of a mystery. But whatever the reason, it was always bound to burn itself out and eventually return to earth. That's what's happening now, and the timing suggests it most likely has little to do with Elon Musk, Twitter, or a woke backlash. Tesla is just a car company facing increasing competition and investors are finally waking up to that.

Tesla is just a car company - Kevin Drum

 

OTOH, this tweet caught my attention. Even with greater competition, one would think a booming EV market would insulate Tesla from a downturn, even if added competition halted continued growth.

 

Interesting take by Krugman.

Opinion | Did the Tesla Story Ever Make Sense?

Basically said Tesla was a bubble and it wasn’t likely for it to retain extreme valuations because ultimately autos, even electric ones are replicable. I don’t know if I totally agree but it makes sense.

 

Paywalled but makes sense. And not inconsistent with what Drum said. A lot of it was a bubble. Still would think it would not drop this precipitously. Obviously no one knows the exact answer. Markets are by definition a collective organism of millions of individual decisions with almost infinitely varied motivations. But at the meta level, it still seems a bit inexplicable

 

It pretty clearly was a bubble. The only way to really justify their valuation is if you believed that Tesla would essentially wipe out all of their competition with their current business model (producing privately owned, high end electric vehicles). That seems like a long shot. Long term, cars are likely to be something that most individuals don't own, as Uber or somebody like them, starts to implement autonomous driving systems. That lowers the capital needed for the transportation system, which is great overall but not great if you are the automaker.

 

More proof fundamentals are beginning to win again.

Warren Buffett has surpassed Jeff Bezos in wealth — and threatens to oust Bill Gates as the 2nd-richest American, after Elon Musk

 

Are you really comparing AMC to Tesla? lol

 

Apple stock is down 29% year to date. We’re in a bear market. So companies that have high a P/E ratio relative to their peers are taking a bigger hit. Such is not uncommon in a bear market. It is not indicative of other car companies catching up to Tesla or any of that. When you’re in a prolonged bear market and recession is forecast by nearly 8 out of every 10 economists, investors run for safety and stocks that have P/E ratios relative to their peers get hit the hardest.

Companies like Apple and Amazon have their own difficulties. It’s not indicative of certain doom. All companies face challenges.

 

Ummm, no?
I am saying that all the things that indicated market fundamentals were out of whack the last few years are coming back into line. AMC is just one more example of that. In the end fundamentals win out, and that’s where we are now.
And that is bad news for Elon because market fundamentals say his TSLA stock is still overpriced, even after the huge drop.

 

Look, I respect you as a poster, but AMC should never be in the same conversation with a stock like TSLA. AMC is/was just a pump and dump meme stock. They were on the cusp of bankruptcy and burning through millions in cash every month leading up to the stock taking off. Retail investors just used it as an easy pump and dump. Talking fundamentals of AMC versus really any other company in America is not only unfair, but laughable. Sorry, man.

 

I was talking about how bubbles manifest, AMC was an example of it. It was a bunch of young folks with stimulus money and a point to prove. That crashing along with crypto, much of tech, and yes TSLA says the era of easy money is over, and that’s bad news for Elon. Not sure honestly how that can be debated.
But I’m still flu sick and don’t want get into the minutiae if it, so if you still don’t agree then so be it.
Have a nice night.