TSLA - Tesla

[bmneveu]

I heard on CNBC yesterday that volume from the retail investor has doubled in the last 10 years. Seeing the big days for TSLA and to a lesser extent AAPL after their splits, it makes me wonder if there is more value now than years past in keeping your stock price low. And if that is the case, why would any company choose to keep their stock price high, if its just free money to split it. Looking at Berkshire Hathaway, AMZN, GOOGL, etc.

 

[Bullitt]

You're probably right. The mindset is that for a $1,000 stock to increase it needs to go to $2,000, but a $5 stock only needs to go to $10.

Problem is TSLA's P/E is still 1,150.

Even paying off this debt, they might lower the P/E to half that, but still would be 500+. Interesting that insiders have held off on selling stock for debt reduction the past few months until the recent 'split ramp'.

 

[Bullitt]

Something for the fanboys. To infinity and beyond.

GraniteShares 3x Long Tesla Daily ETP (3LTS-GB:London Stock Exchange)

https://www.cnbc.com/quotes/?symbol=3LTS-GB

 

[bmneveu]

You're probably right. The mindset is that for a $1,000 stock to increase it needs to go to $2,000, but a $5 stock only needs to go to $10.

Problem is TSLA's P/E is still 1,150.

Even paying off this debt, they might lower the P/E to half that, but still would be 500+. Interesting that insiders have held off on selling stock for debt reduction the past few months until the recent 'split ramp'.

The nutty P/E is the reason why I haven't bought the stock. I am a big fan of the cars, tech, and Elon. No doubt it's the most advanced vehicle on the road. And then there's all kind of other revenue streams as well that help justify a higher P/E than a normal vehicle stock, but THAT much more. I would love to own TSLA stock, but I'm not buying into a P/E that high. I'll keep missing the boat if I have to; it just doesn't make sense to me.

 

[Bullitt]

Getting whacked right now. Down around 15% from the intraday high of just yesterday.

 

[tsptalk]

Caught a bid at the 20-day EMA...

 

[Bullitt]

Extremely short term time frame for me, but can't help to see that TSLA is getting whacked another -4.5% pre-market.

All those trapped longs who bought more after the split when "the stock got cheaper".

 

[bmneveu]

I still think that P/E ratio is out of this world. I started a youtube channel to talk stocks:

 

[Bullitt]

You'll have to check the PF chart for yourselves, it would take up an entire page.

PF bearish price objective - $161.

 

[Bullitt]

-21%. In one day. I couldn't even imagine.

The folks at Morningstar placed a FV of $173 on it in late July. Interesting how close it is to the PF chart target of $161.



Don't forget, when Commander Musk said the stock was overvalued on May 1, it was 50% below where it is today.

 

[Bullitt]

It's all about the subsidies.



https://www.ft.com/content/2e5731a1-c7ac-4f3e-ba0a-d9bae5b7fa67

 

[tsptalk]

Nice...

 

[tsptalk]

 

[Bullitt]

Tesla lottery tickets will be higher after announced it will be in the S&P 500.

Not good for index funds though as they'll be forced to chase an overpriced asset even higher. This does not bode well for long term index returns.

 

[bmneveu]

This does not bode well for long term index returns.

Maybe not, but it's only going to be something like 2% of the S&P 500 at most.

 

[Bullitt]

It's the idea that it drives up the whole index to inflated levels.

“They’re almost turning the S&P 500 into more of a momentum index,” said Benjamin Lau, chief investment officer of Apriem Advisors, which manages about $850 million and holds a small amount of Tesla shares.

“I’m more worried about how it affects our index funds and passive holdings than anything else,” he said, adding that they could now become more volatile.

https://www.wsj.com/articles/what-teslas-addition-to-the-s-p-500-means-for-investors-11605631435

Memories of Yahoo! which also had a P/E ratio of over 1,000 when it was added in 1999.

Tesla’s addition to the index is expected to be particularly challenging because the company will be the largest to ever join, and it is expected to make up at least 1% of the gauge. At its current value, it would be the sixth-largest company in the S&P 500, just bigger than Berkshire Hathaway Inc. and smaller than Facebook Inc.

“The people who will pay the price if S&P screws up are the investors in passive S&P” funds, said Ben Inker, head of asset allocation at investment manager GMO, which oversees about $60 billion in assets.

Timing is hard for investors and indexers alike. Yahoo’s market capitalization peaked less than a month after it was added to the S&P 500 in December 1999—just before the burst of the dot-com bubble. Qwest Communications’ market cap peaked the same day it was added to the index in July 2000. Neither stock trades today.

“Why am I the sucker who has to buy it after the stock is up fivefold?” is what one might wonder if forced to buy Tesla shares after such a tremendous run-up, said Mike Bailey, director of research at FBB Capital Partners, which oversees some Tesla shares.

https://www.wsj.com/articles/teslas...t-100-billion-in-trades-in-motion-11606645801

 

[Bullitt]

A move to the psychological $600's before year end is certainly in the cards though.

 

[tsptalk]

Tesla to raise up to $5 billion in share offering, its second in three months

https://www.cnbc.com/2020/12/08/tesla-to-raise-up-to-5-billion-in-share-offering.html

 

[Bullitt]

They should just sell $5T of it. Eventually the earnings will have to catch up to the price, and that's not happening any time soon.

Current PE = 1,200

 

[Bullitt]

According to analysis by S3 Partners, short investors in Tesla— those who placed bets in the market that its shares would lose value — have lost $35 billion on those positions so far this year.

Michael Burry, who became famous as the focus of the book “The Big Short” thanks to his bet against the housing bubble and mortgage-backed securities just ahead of the Great Recession, disclosed in a since deleted tweet that he had taken a short position in Tesla as well.

https://sanfrancisco.cbslocal.com/2...hort-sellers-lose-more-than-airline-industry/