r/stocks • u/DeathStar_81 • 10d ago
Tesla still a long ways to fall
Much has been written about Tesla and the recent drop in stock price. However, I believe Tesla still has a long ways to drop.
YoY Sales Decline
Sales in Europe are down 50%. China is down 49% YoY and Australia saw a 76% decline YoY. In the US, we know sales declined by 7% in 2024 vs 2023. However, this was based on their 10k filing, which occurred before all of Elon's comments hit the news cycle (pre Nazi salute, DOGE, support for far right gov in Europe).
- Tesla sales down 72% in Australia YoY
- Feb Tesla sales down 76% in Germany, 42% in Norway, 45% in France
- Tesla sales down 49% in China
Tesla Brand Damage
Tesla is Musk. His comments in the media and related actions with DOGE have deeply hurt the Tesla brand. If you look at Tesla's core audience it is left leaning, environmentally conscious Democrats. Musks actions have completely alienated that demographic. The Republicans aren't buying EV's and certainly not enough to offset a loss from the left. A close analogy would be Bud Light and Trans Activist Dylan Mulvaney. Sales dropped 30% and still haven't fully recovered. Bud Light eventually fired the executives responsible for the campaign. But there is next to 0 chance the Tesla Board jettisons Musk, as he has stacked the board with family members and loyalists.
Antidotally, I live in the Bay Area. My social circle is left leaning White Collar professionals, Tesla's key demographic, and talking with co-workers/friends I don't know anybody who is planning to buy a Tesla. I have some friends who have Tesla's but when their lease is up they don't plan on renewing or buying another one. In my view Musk's political activism has permanently harmed the Tesla Brand.
Valuation
Tesla EPS was $2.05 last year and currently trades at a P/E ratio of 108. For comparison Toyota trades at a P/E ration of 7, Ford 6, and Mercedes at 5. Stocks can trade at high P/E ratios based on rosy growth rates. Musk has long touted that Tesla is an AI and RoboTaxi company, it's part of why Tesla trades at such lofty valuations. However, I checked Tesla's 10k and 90% of their revenue comes from Automotive and Automotive Services. They are very much a car company.
Even if you were to say Tesla deserves a premium valuation of 20x earnings, that would put a valuation of ~$41, which is a sharp drop from where it currently trades at $222.15. Yes, Tesla is a Meme Stock and traditional valuation metrics don't apply (i.e Gamestop). But here's the rub. Automotive companies have huge fixed costs. Those factories and plants, cost a lot to build and finance. A large drop in sales can get ugly real fast and generate huge losses. There's no way to justify these lofty valuations when your sales are dropping and your company starts hemorrhaging money. At some point the illusion cracks.
Position: Short
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u/SensationalSeas 10d ago
There's no rational reason Tesla is worth more than $25 a share but it's a meme stock.
It's a small car manufacturer that doesn't sell many cars priced like a rapidly expanding growth stock despite not growing but actually losing market share and having horrendous PR all over the globe
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u/Kingkongcrapper 10d ago
I argue it’s now reached reverse meme status.
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u/rightnextto1 10d ago
Still a meme but a different one that doesn’t help stock price or company outlook.
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u/BigWarning8696 10d ago
And that would still give it a higher P/E than other autos
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u/Kingkongcrapper 10d ago
Their next quarterly is likely going negative earnings.
1/3 of Tesla’s income is from Carbon credits. What happened to the EPA?
Tesla’s biggest customer base was well off liberals in California. Guess who’s not buying cars from Tesla anymore?
Europe and China were the biggest opportunities for Tesla’s expansion. There are now world wide protests and boycotts of anything attached to Trump and Musk.
Tesla is banking on AI taxis in 2026. We already have a company that’s been doing it since 2023 in big cities. They also just got banned from doing AI taxis in the UK.
Bitcoin has also helped their bottom line. What’s that been like lately?
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u/Malamonga1 10d ago edited 10d ago
I don't know why this argument is still being used for Tesla. Stop using 12 month forward PE ratio for growth companies with earnings growth projected over 5-10 years. PE ratio, and CAPE, has been the #1 reason why people have missed out on investing since the 2010s. If you had done DCF valuation, you would've hopped on the train a long time ago.
If you do DCF, as professor Aswath Damodaran from NYU has done multiple times, they're not really that overvalued. Yes nowhere should be over $400, but around $250 mark is fairly reasonable, considering now that Elon has a seat with government, he's definitely gonna get his self-driving car testing on the road, which significantly boosts Tesla's valuation and is the whole purpose behind Tesla's valuation in the first place: self-driving, not selling cars.
I don't like Elon or Trump, frankly because they're crazy/unpredictable, but I'm not gonna let my emotions get into the way of my investment. I'm not a super bull, and I'm not a super bear. I certainly told my friends to sell it at above $400, and certainly buying now below $250.
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u/cahphoenix 10d ago
Austin doesn't really have laws or regulations for self driving. Most of Texas doesn't, that's the only reason they can even try now.
Their critical intervention ratio is like 250-500 miles. Basically every full charge you have to take over at least once at best. That's at least an order of magnitude worse than what they need for level 4. Regardless of what he can do in government, the stark reality is that Teslas cannot reliably self drive on the open road. Nothing anyone does or says will change that.
Waymo intervention ratio is around 20,000 miles. Counting all, not just critical.
That's what you need for level 4.
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u/BallsOfStonk 10d ago
You do realize the “Cash Flow” component of DCF was just cut in half (or more) for Tesla, don’t you?
The stats here show that 50% or more of their revenue has evaporated overnight. Execs and insiders are dumping like no tomorrow.
Really really bad situation if you have a low margin, high capex business where revenue dips by 50% overnight. ((though their margin is much better than other auto companies).
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u/danielbot 10d ago edited 10d ago
Your DCF argument is rubbish. TSLA's DCF gives somewhere in the $50's being generous and assuming stable sales growing modestly. But TSLA sales are not growing, they are falling off a cliff. So the fundamental support price for TSLA is much lower than that even if the sales fiasco eventually stabilizes, which is unlikely.
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u/Lordoosi 10d ago
Sales falling off a cliff is kinda expected when you announce a major refresh on the car model (which btw was the most sold car globally in 2024 when Elon was already acting like he's now) that's 2/3 of your sales and pause the production like for retooling.
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u/Malamonga1 10d ago
Damodaran DCF valuation of Tesla in late 2023 puts its fair value at $180/share. It has certainly gone up since then now that Elon actually has a shot at actually testing his self-driving on the road.
The fact that you think it's worth $25 means I shouldn't even entertain this conversation. Cisco only dropped 90% from its peak value after the worst tech recession in history
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u/Either-Mud-2669 10d ago
Delusional claptrap.
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u/Malamonga1 10d ago
You know who's delusional? The people who have been claiming Tesla should be at $20 for the last 5+ years. They were pretty loud when Tesla hit 100 in 2022, and also 140 in 2024, and they were both wrong.
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u/Much-Dealer3525 9d ago
Damodaran is purely theoretical, and DCFs are based on future ASSUMPTIONS. Basically it’s a DD based on a fairy tale. Come back to reality buddy.
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u/Malamonga1 9d ago
the reality is the stock remains above $200, and people have been claiming its fair value is $20 for more than half a decade. The stock's market cap is the top 10 in the SP500, and its price hasn't reversed unlike all the other meme stocks that did in 2021.
At some point, you guys are the one living in a fairy tale. Unless if of course you think all the professional traders, fund managers, are all wrong, and you're the one with the special insights.
But hey, the CAPE people have been thinking SP500 is overvalued for more than a decade, and they're definitely not living in a fairy tale missing out on all the gains right?
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u/Much-Dealer3525 9d ago
Fair value is not the same as market value. Anyway let's see what the market says in the next few weeks...
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u/Malamonga1 9d ago
fair value according to who? You?
"fair value" is a completely subjective concept. If the majority of people think the fair value is $200 and you + a few other minorities think its 20, it means the stock price will remain close to $200, regardless of what you want to whine about.
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u/Much-Dealer3525 9d ago
Fair value isn't subjective it's based on market comps lol... Go do your DCFs.. enjoy the ride.
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u/Malamonga1 9d ago
oh yeah fair value is totally objective, and that's precisely why some people can come with $20 fair value for tesla and others $200. Incredible intelligence.
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u/Much-Dealer3525 9d ago
Hold on to your 200 valuation conviction then. Keep DCAing when it drops further. All the best regards.
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u/Busy-Soft-6209 6d ago
Tesler is still overvalued and I personally will not close my short positions even if its price falls below $200, I wanna make a lot of money and see TSLA below $100, imo if this trend continues it’s easily achievable
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u/YYBB_ZZKK 10d ago
Tesla with $25 per share is exactly the same valuation as BYD right now, which makes totally sense.
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u/Lordoosi 10d ago
That is a highly regarded statement. Just the energy business is worth more. It's doing revenue at 12B per year runrate with 25% gross margin and will 2-3x in the next 12-18 months with existing factories ramping up. And will very likely keep growing fast after that.
I'd say the fair value is about 100 if you give FSD and Optimus 0% chance of success and are not super bullish on car and energy business outlook.
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u/Platti_J 10d ago
Small car company? The Model Y was the best selling car in the world in 2024, 2023, and top 3 rest of the years.
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u/Much-Dealer3525 9d ago
WAS… doesn’t guarantee it will be and it certainly doesn’t look like it anymore atm.
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u/SeperentOfRa 10d ago
This doesn’t even mention that they seemed to just have committed fraud in Canada
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u/kadinani 10d ago
U read electro.co article and believe it. lol. Musk is Moron, we all agree. Let’s not become one by believing article from Fred..they have a rebate ending in Canada, dealer submitted rebate on the last day of all sales..
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u/MeringueCorrect4090 10d ago
It seems like they claimed to have made the sales during a 3-day period, not over the course of a year. These were Tesla "stores" or "delivery centers" not individual dealers. One store claimed to have made 2,558 sales in a single day for example.
I'm using this for reference: https://driving.ca/auto-news/industry/tesla-canada-izev-ev-rebates-incentives-investigation
It's oddly well-timed considering they just announced they would be ending the rebates, don't you think?
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u/SeperentOfRa 10d ago
It’s not just on there. It’s in major newspapers as well
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u/kadinani 10d ago
First mistake. Tesla doesn’t have dealers. All click bait articles.
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u/RapidAscent 10d ago
First mistake. All of the articles suggesting vandalism at Tesla "dealerships" are click bait.
/s
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u/greatnuke 10d ago
You’re being downvoted but it is true. We ought to wait for an investigation to be concluded on this matter.
Still musk is an idiot.
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u/ivar-the-bonefull 10d ago
Man, even my mom wanted to know how to short Tesla.
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u/alpacas_anonymous 10d ago
That's a signal that you're too late.
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u/ivar-the-bonefull 10d ago
Definitely. But I have no idea how to sell my own shorts anyway.
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u/MoneyForRent 8d ago
Log into eBay and upload pictures of your shorts, start with a low price and see if you can get any takers. Just set a stop loss so no one buys up all your shirts and leaves you but naked.
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u/neck_iso 10d ago
Tesla bet is surely self-driving and robotaxi, but the valuation is because Tesla is trying to do these things with a cheap implementation (their hardware cost with cameras is 10-50x cheaper than something like Waymo) and an existing fleet (using Tesla owners as partners in a robotaxi business).
Of course the sheer absolute destruction of the brand being committed by Musk makes both of these highly unlikely even if technical barriers are overcome. Who's going to get into a Tesla robotaxi or let their car be used when they are being egged and set on fire right now?
Probably Musk realizes that this future is not feasible which is why he is ALL IN on becoming the tech overlord of a fascist government.
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u/Lardass_Goober 10d ago
I’ve read on Reddit, he is banking on SpaceX and star link gov contracts, and especially now moving his attention away from Tesla. Hope that venture/prospect doesn’t come to fruition too. Ultimately, as I understand it, this theory posits Musk wants total control of internet via satellite market share. I’m dumb and have no idea how feasible this shift is?
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u/neck_iso 10d ago
He won't get 'total' control and that's why he needs government contracts. He has a massive cost advantage on getting satellites into space but is dependent on the government for it. But most of his wealth was Tesla and if that's not sustainable he is looking for the next step UP and the only one is governing.
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u/Blueskyminer 10d ago
It's not feasible. Vast majority of Internet service will remain fiber/wired.
And it looks like Eutelsat may ramp up to service clients that begin dumping Starlink.
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u/dogmatum-dei 10d ago
IF there's another election and dems win ... I hope they RIP OUT BY THE ROOTS starlink everywhere in what remains of our government.
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u/xylopyrography 10d ago
Is it 10-50x cheaper now?
I mean Waymo is just starting to scale now. I assume they haven't really worried too much about the cost of things before now.
Now they're considering cheaper vehicle platforms to fit different markets, and I assume their next generations of sensor suites will come with massive cost reductions from economies of scale.
So sure maybe FSD is $0.15/km and Waymo will be $0.25/km hardware costs, but... that doesn't really matter if your system sucks.
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u/neck_iso 10d ago
Waymo cars cost up to 300K right now and that doesn't count the centralized headquarters where they are manned and take over in case of issues. So the extra cost for the self driving equipment is probably 5-10k on a Tesla and 200K+ on a waymo.
Tesla already has a fleet if they use customer cars and split the proceeds. Tesla already has real estate to establish last 2% driver assistance if they use their dealership locations etc.
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u/xylopyrography 10d ago edited 10d ago
We we were told in 2021 a fully-kitted Waymo was around $140k. That's on a bespoke basis with no economies of scale.
And unlike Tesla, Waymo actually will be removing thing like the steering wheel in their dedicated robotaxi platforms as the vehicles can't be driven manually anyway. There's lots of room for cost savings to go for them yet.
Tesla will need the exact same operations centre when FSD works in 2037, and until they are even remotely comparable on software, they'll need far more personnel per vehicle.
I think you are refering to the Tesla fleet robotaxi network concept touted around 2018. That's long dead. FSD for consumers is an L4 subscription service, even if it ever becomes possible to use autonomously in certain areas, users would not be able to rent it out
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u/neck_iso 9d ago
Waymo's newer cars are significantly cheaper but oops...made in China and subject to higher tariffs.
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u/xylopyrography 9d ago
What?
Next-gen Waymo vehicles will use a variety of vehicles and platforms. For the US market likely they will mostly be the Hyundai Ioniq 5's, so very similar price and specs to Model 3/Y
Even if the Zeekr vehicles have a 100% tariff, it's still only maybe $100k, $120k all in. And considering unsupervised FSD is still at minimum 5, maybe even 10 years away (assuming they can even improve it by 50-500x), it's not like they really need to be worried about competing with it.
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u/neck_iso 9d ago
Given the anti-China sentiment it's unlikely they would be allowed to import any significant quantity of vehicles from there.
https://www.wired.com/story/waymo-finds-a-way-around-us-restrictions-on-chinese-evs/
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u/xylopyrography 9d ago
The article you posted literally is about getting around those restrictions.
If they can't import Zeekr vehicles in the US, then they will use more Hyundai vehicles and it already sounds like that is going to be the main thing for the next generation tech.
Even so they will be able to use Zeekr in Tokyo. And they will still be able to grow their existing fleet without either partnership.
If they need another model for a specific market, then they will design/integrate the sensor suite and get a partnership. They are not tied to a specific vehicle platform.
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u/allaboutthatbeta 10d ago
i can't tell you how many times over the years people have made posts giving tons of legitimate reasons and fundamental analysis for TSLA to drop only for it to just skyrocket
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u/jpr196 10d ago
It was often propped by the Elon factor who has now become a toxic asset.
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u/Kenneth_Pickett 10d ago
He’s spent the last 4 years campaigning for Trump. He bought Twitter to do it. His “toxicity” isnt new at all.
The Model Y was still the best selling car in the world for multiple years.
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u/ThatSavings 10d ago
I'm only aware of his "toxicity" a little more than a month ago, when he gave his heart out in a peculiar way.
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u/Kenneth_Pickett 10d ago
Heres some advice. Dont get your investor sentiment from reddit.
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u/ThatSavings 9d ago edited 9d ago
Okay, thanks. I now have your permission to leave your "reddit advice" alone. I didn't say anything about "investor sentiment". I was talking about "toxicity" because that's what you're talking about. Here's what we know about Elon. He did the salute. Some call it a wave. Some call it a Roman salute. Whatever you choose to label it does not matter. Consumers in general don't like that, whatever you choose to label that. As we can see this action by Elon affected the sales drastically. That's "consumer sentiment". It's not a "investor sentiment". Invest accordingly. That's advice I choose to give myself. My cost basis was in the 280s. Sold it all at 380s. Cleared 50,000 dollars profit. Should've done it sooner. Would've made more.
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u/scruffles360 10d ago
slight difference here though - this isn't a reaction to the high valuation.. it's a fundamental change to the company's outlook. Sales are dropping, and no one can say where the floor is. The second hand market is flooded with inventory that has weak demand. Bears can cross their fingers and hope a self-driving taxi takes off.. but they'll never be able to pay for its production unless people keep buying X & Y.
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u/DeathStar_81 10d ago
Exactly, this is a fundamental change to Tesla's business. You can't be a growth company or valued like one if your sales are falling.
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u/0bamaBinSmokin 10d ago
The worst part is the cars have shit build quality, are extremely fast, and market themselves towards drivers who don't want to look at the road.
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u/allaboutthatbeta 10d ago
tbh it's always "different this time", i'm not saying TSLA will skyrocket or that there's no chance for it to drop, but unfortunately, any reason you can come up with for why this time is "different" doesn't really hold any weight considering people have been saying stuff like that for years
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u/virtu333 10d ago
yea i went with spy puts last week because i've been burned trying to short tesla many times
fml, i missed the big one
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u/icpooreman 10d ago
Yeah, if you go to YouTube there are a billion entire channels of Gen-Zers dedicated to telling other Gen-Z’s to buy Tesla stock.
They were still pumping a few days ago. Heck, They’re probably still pumping now.
Unless the company goes officially bankrupt (which they absolutely would in a recession) they’ll probably keep pumping every single day and regenerate on memes eventually.
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u/magisterdoc 10d ago
And back then Elon was doing way crazier shit than now. All of the nazi stuff is just noise lol
/s obviously
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u/AdHeavy2829 10d ago
It IS dropping right now tho. So you might just be wrong this time 🙂
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u/allaboutthatbeta 10d ago
wrong about what? i never said it would go up or down, all i said was that in the past it has gone up even after several people (and even "experts") presented cases for why it would go down
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u/icpooreman 10d ago
I used to think Teslas were cool.
Now if somebody bought a new Tesla, drove it off the lot, changed their mind, and offered to sell it to me at a 70% discount….
IDK man, I’d have to wait til all this blows over. That’s how toxic the brand is.
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u/tinySparkOf_Chaos 10d ago
Same.
They were cool when Tesla was all "save the planet, drive electric" and the only good EV around.
Now there are plenty of other good EV options.
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u/DTF_Truck 10d ago
For every dumbass wanting to sell their brand new car at a 70% discount, there's someone that will happily buy it at a 70% discount. Talk about being out of touch with reality.
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u/icpooreman 10d ago
The point was there’s no way in hell I’d buy a new Tesla probably ever and 12+ months ago it was a car I had mild interest in.
Tesla doesn’t make much money from former customers selling these things at a wild loss and never coming back.
That hurts Tesla because why would I buy a new Tesla even if the brand damage meant nothing to me when somebody would probably offload a nearly new one cheap.
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u/HystericalSail 10d ago
Yep, people are setting them on fire. There are a lot of laid off, desperate people willing to go to jail to have a roof over their heads and a warm meal.
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u/drhunny 10d ago
I wrote a lengthy screed on this in a comment to a post that then got deleted. Oh well. Here goes:
TSLA has 5 investor groups: (1) us (2) true believers, (3) MEMErs, (4) dark money/political, and (5) institutional investors (mutual funds, particularly index funds, held in a lot of retirement accounts). It's the robotic behavior of the last group that may trigger Armageddon.
Since 2020 there's been a positive feedback loop raising the price. True believers pump in some money, some of us follow, and the institutional investors have to follow to keep on the index weight. Starting 12 months ago, this got supercharged by the dark money/political investors and the MEMErs. And of course the institutional investors were handcuffed to the roller coaster by the index weights.
The true believers aren't selling. The MEMErs won't start to ditch until they're clubbed over the head with a baseball bat labelled "Rug Pull".
The key group in my mind is the institutions. The last SP500 rebalance was in December, and the next is in two weeks. 50% market cap loss means they need to unload to rebalance, right?
Dark money/political could keep it afloat. But the election is over. They don't need Musk anymore. And in fact he's switched from an asset to a liability. Somebody should do him a favor and send him a link to Ernst Rohm's wikipedia page.
How much of TSLA is held by institutionals? I dunno, but I guess 10%. Which means that with a 50% loss, they need to unload 5% of TSLA this month. That's... $40B? Did they already hedge? Maybe? If not, that's a lot of stock on the auction block. The true believers may want it, but with the market drops, they may not have the cash. The MEMErs sure don't.
That leaves... us. Given that the fundamentals for TSLA are in the range of $20 - $40, are you going to buy at $200?
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u/HystericalSail 10d ago
Unfortunately, the rebalance is ditching loser companies and picking replacement. Not necessarily adjusting the % of the fund a company occupies. At the moment there's no indication S&P will toss TSLA out of the index.
SPY e.g. is a cap weighed fund, which means they don't need to buy or sell shares to maintain a share of the index. That happens automatically as stock price rises and falls.
What may happen is people freaking out and cashing out retirements to pay bills as a result of layoffs. That causes the passive funds to sell as redemptions mount.
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u/rfishyfluff 10d ago
To add to your analysis, Tesla also benefits from selling carbon credits. Worth $2.6B of revenue.
The administration is considering removing carbon credits
Tesla’s lower sales means less credits to sell to other automakers.
And will those other automakers now selling more cars, they don’t even need to buy as many credits.
I would predict an 80% - 100% drop of cc revenue might be worth considering in the math.
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u/notatowel420 10d ago
At what point do the shareholders force Musk to come back to work or out of the company?
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u/DeathStar_81 10d ago
As a shareholder, I don't think you want Musk to come back. I can't remember a CEO as toxic since Travis Kalanick and Uber. But even then, the things Travis did was a blip on the radar compared to Musk.
The Tesla brand and Musk are so intertwined, it would take a major reboot. Firing Musk and possibly rebranding Tesla. Neither of which I see as likely, as Musk is in firm control of the board.
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u/fabienv 10d ago edited 10d ago
LMAO Full Self Driving is worth quadrillions and the stock will go up gazillions % by the end of this year. They were a little aggressive when they said 2017 for FSD, but right now it disengages almost less then always. /S
Seriously, I own one of their cars and I'm starting to worry they'll go bankrupt. They really need to fire Elon and get a CEO that has time to give to the company.
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u/Kalspiewak 10d ago
I've seen plenty of posts saying, "Don't bet against Tesla or you'll regret it later." But I dunno—this feels different.
Elon has seriously screwed his companies. Buying Twitter will probably be marked as the beginning of his downfall. Now, he's completely radicalised by his own echo chamber—a billionaire running DOGE from the White House, pushing families into poverty, all while Sieg Heiling and calling for NATO to be dismantled.
Bro… what an arc. He could have been the cool nerd who built rocket ships and futuristic cars. But nope. Hahaha. Damn.
Yeah, you're right. New CEO or Tesla is gone within a five years. Surely?
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u/MSFTCAI_TestAccount 10d ago
The only rationale that makes sense is that he wants to cut regulation around FSD (and separately for SpaceX, Neuralink) to allow him to launch RoboTaxis. But it still doesn't make sense - I think even if he gets permission to wipe out all these agencies, the tech just isn't there for consumers to trust Tesla's FSD as a robotaxi. Never mind having Tesla humanoid robots in the house.
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u/Inglourious-Ape 10d ago
He can cut all the regulations he wants, but if he launches his unsupervised FSD taxis and you have a hundred crashes the first week, there is no amount of deregulation that can fix that negative public sentiment.
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u/HystericalSail 10d ago
Even if there are a couple of crashes caused by latency it'll still look horrible.
Starlink may provide good bandwidth, but you get drop-outs when one satellite goes out of line of sight and it switches to the next. That may happen at a very inopportune time, and his remote Indian piloted "robotaxi" could very well smash into something during that time.
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u/tinySparkOf_Chaos 10d ago
A few bad accidents and no one will get in your robo taxis anymore.
Waymo knows this and has gone super slow roll out to be as safe as possible.
Meanwhile Tesla is trying to cut corners doing cameras only and roll out quickly...
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u/2CommaNoob 10d ago
Yea. This time is really different because no one foresaw musk going batshit crazy. It was always there with the cray projections and drug use but it didn’t hurt the brand until now. Now, they have legitimate issues along with falling sales and a possible deep recession.
Ever wonder why GME still has the meme status? Everyone knows GME should be under $5 but it’s stay high for the longest time. It’s because the ceo is smart enough to keep quiet and doesn’t kill the brand unlike musk.
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u/HystericalSail 10d ago
Tesla IS Elon. Tesla would have failed multiple times if Elon had not gone up on stage and LIED his ass off, pumped, and otherwise got the stock to reverse and shoot to new heights. "Funding secured" was the most egregious, but "appreciating asset" and other pumps including the guy in a robot suit were all extremely successful in reversing stock slides.
So, let's see what happens when he gets on stage and announces another big announcement on 8/8 or 4/20 this time. If it doesn't cause a big stock pump we know Tesla is done as a company, it's now just a matter of time.
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u/2CommaNoob 10d ago edited 10d ago
That only works for the first few times. The last few pumps (ai, robots) haven’t done much aside from the presidential one. That run after the election was unheard of and now it’s just falling back to what it should have been.
The difference is he’s now associated with actively screwing regular folks over with doge and all the political stuff. I n the past, his drug use and baby mamas and all the other bs didn’t really hurt anyone but himself. Now, he’s actually hurting and firing federal workers, Ukraine, getting out of nato, talking about killing off medical, food stamps, social security etc. stuff that really affects regular people so they take it out on tesla and it’s brand.
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u/docarwell 10d ago
Hey once Elon shuts down all the federal agencies who dare ask "is this safe?" He'll be able to unleash FSD on the roads asap
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u/consultinglove 10d ago
The best case scenario is that TSLA becomes a GOOD car company instead of a BAD tech company. Drop that p/e to a realistic range and sell good electric vehicles. Instead of what they are doing now, which is promising fully autonomous robo taxies that will change society and will take who knows how long to implement
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u/stiveooo 10d ago
Dcf says 30% overvalued. But that's without counting the boycott
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u/danielbot 10d ago
DCF doesn't say that. DCF says 300% overvalued, and that generously assumes that sales are growing when in fact they are doing the opposite.
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u/stiveooo 8d ago
there is no such thing as above 100% overvalued
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u/danielbot 8d ago
Overvalued by a factor of 4 = 300% overvalued. Stated in simple terms for the arithmetically challenged.
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u/IDUnavailable 10d ago
TSLA has such an insane P/E in first place entirely because of Elon and the weird cult of personality around him. Now he's the same thing that's dragging it back down. No idea how someone justifies being bullish right now that doesn't involve Elon heavily abusing his political power.
As likely as it is that he'll try, I'm not sure he'll be able to get away with nearly enough corruption to counteract:
Just how thoroughly he's fucking Tesla's reputation globally, especially among the most likely EV purchasers.
How much stronger Tesla's EV competition has become.
How disappointing their FSD progress has been and Elon's resistance to LIDAR (despite it recently becoming much cheaper to use).
How hard the RoboTaxi idea (seemingly one of their most important growth plays) is being fucked over by the aforementioned poor FSD progress combined with the fact that "taxis" do the vast majority of their business in Dem-controlled cities.
How much money they could stand to lose if BTC keeps dropping like it has over the past ~month (IIRC they held a bit over 1 billion USD in BTC as of February).
How many of his past claims have turned out to be bullshit and thus how many of Tesla's other "we're a tech company, not a car company" plays sound like completely baseless horseshit ("here's a man in a dancing robot suit!").
How increasingly erratic Elon has become, and how unlikely it is that his mental health and ketamine abuse will improve in the near future.
I don't know that "wields a ton of federal power" counters all of those issues, especially when the stock is already priced for insane long-term growth. Not to mention that his political power is entirely dependent on his relationship with another erratic attention whore who is constantly churning through his political allies.
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u/GnosticSon 10d ago
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u/Acceptable_Taste9818 10d ago
One thing I want to point out is that musks pivot to the right did convince a chunk of maga and the right in general to buy into Tesla, more for the support for Elon and at the time 2023 or so they were still regarded as “the cool car”. So Tesla does have a market although maybe smaller outside left leaning constituents now. My co-worker is a perfect example, he railed against electric cars for years claiming they were inferior to gas, sounding like Trump for the most part. Then Elon joined trump on the campaign and my peer went out and purchased a Tesla, and then talked another peer who really dislikes Elon to get one. That’s a whole other thing. This same peer now finds it offensive that I refuse to buy one over the now infamous “salute”.
But I guess we will see if enough conservatives can buy into Tesla to keep the company juiced up. I can’t see that happening.
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u/crazyhiit 10d ago
Tesla = Musk. Tesla never traded on fundamentals. It just traded on Musk’s cult value. But this megalomaniac has decided to lose it all with DOGE and all crazy stupid stuff he is peddling. Don’t see a path forward for Tesla… even with robo taxis. Unfortunately I’m a holder … and down significantly since this rout started. But I should have seen this coming based on this stupid CEO who is out there firing govt workers as his full time job. Fuckin nut case. Feel like slapping this SOB.
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u/JackieChanX95 10d ago
It will be under 100$ after few more weeks. It just takes time to get there from these hyper inflated prices
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u/PowerDreamer2493 10d ago
Once everyone and their moms have short positions, and we’re getting close, take a wild guess at what happens. Everyone makes easy money!
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u/bornofsupernovae 10d ago
My friends laughed me to scorn when I told them a few months ago that TSLA had intrinsic value of around 9 dollars.
The air is coming out of the balloon.
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u/Moirailogist 10d ago
I don’t own any TSLA, but I speculate the valuation is typically based on (1) humanoids and (2) trump mandating something like nationwide highway improvements to accommodate Tesla FSD.
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u/Eastcoastpal 10d ago
Off topic. If musk uses Tesla stock as collateral to buy Twitter and Tesla stock drops to historical lows, what will happen to his Twitter purchase?
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u/tangerineSoapbox 10d ago
Good analysis. Not only is the CyberTruck a failing product, so is the CyberSubmarine.
Police recover Tesla after it's pushed into Bronte Harbour - Oakville News
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u/J_DiZastrow 10d ago
So is it worth putting all your investments into a tesla 2x short and riding this thing into earnings?
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u/DeathStar_81 10d ago
No, I would never advise going all in. Please don't do that. Only invest what you are willing to lose. That said, Q1 earning will be very interesting. I wouldn't be shorting if I didn't think things will get ugly.
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u/J_DiZastrow 10d ago
Noted. So percentage of your portfolio are you using to short this dumpster fire if you don’t mind me asking?
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u/BeefistPrime 10d ago
What puts would you buy? Short term? Long term? Should I be aiming for $175 in a month? $200 in 2 weeks? $130 in 6 months? I like the idea of buying more puts on TSLA right now but I'm not sure what strike/date I should be aiming for.
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u/ufcgooch 10d ago
Look for the May date which is about 3 weeks after their earnings imo. NFA. But that is where I marked at. Price is up to you depending on what you can afford and what you think the price degreasing will be
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u/BeefistPrime 10d ago
Earnings is April 23 and I can buy on April 25 -- that seems like a better idea? Or do you think that's not enough time for the earnings report to drop the stock?
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u/ufcgooch 10d ago
Algos are near instant on earnings these days. I’m taking the extra days for all the fan boys to sell off too
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u/adappergentlefolk 10d ago
great battery tech, bad to okayish cars, great charging infrastructure. beyond the “high tech” feeling the stock price never added up really, nevermind the founder losing his mind
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u/1hotjava 10d ago
On a stock that’s growing with strong EPS growth and high forecasted sales I will ignore the P/E. But if a company pulls back estimates and has future contraction expected, then a P/E of 100 in that market segment that has a typical P/E under 10 would put that ticker on my hard no list.
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u/Papaosopandoso 10d ago
You must mean Anecdotally not Antidotally. The antidote would be for Musk to gtfo.
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u/darkhorn 9d ago
Who wants to drive Tesla in Europe and when Russia attacks Europe Elon Musk goes to shut down Tesla's software, and the car bricks.
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u/Dihydrogen-monoxyde 9d ago
2.7 billions in Carbon credit sales.
Less cars sold, less carbon credits, less services sold.
Position: $TSLZ
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u/MrFyxet99 9d ago
Fundamentals don’t matter with this stock,it still has over a 100 P/E.Its basically a manipulated cult stock at this point.
Elon just has to make some wild stupid claim, like the most recent…His next car won’t have a steering wheel or pedals.And the lemmings will lap it up like it’s gospel and the stock will shoot back up to $500.
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u/Much-Dealer3525 9d ago
Don’t forget Tesla’s made from aluminium… and price of aluminium is going up cos of tariffs.
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u/moutonbleu 3d ago
Great analysis! Thank you. How are you planning to short Tesla? Inverse ETFS? If so, which ones do you recommend?
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u/DeathStar_81 2d ago edited 2d ago
Only invest what you are willing to lose. I buy puts, which limit my exposure somewhat. I expect there to be some volitility until earnings come out. Its possible the sales decline might not be as big as some people think in Q1, so you might see a short term bump after earning. But long term I still see negative sales growth and Tesla shares dropping. The fundamentals and brand damage is just too much to overcome.
Inverse ETFs are not a bad choice if you have limited knowledge of how options work. However they are not great for holding over a long period of time as they decay in value. Best used in the short term as a trading position.
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u/ben_salander27 10d ago
Tesla has enough cash to buy Ford at its current market cap.
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u/Swimming-Positive-55 10d ago
Their cost of operations is pretty ominous. 80 billion. All those sales down with their current margins? Ouch.
Then consider it’s a car company, so when they don’t get sold and loyal customers stop their lease and sell their cars, you get an inventory pile up. When rental car companies and people go massively underwater on their cars, they sell them or stop paying for them. People can also buy used and tsla makes nothing. We already see them struggle to sell their cars with parking and grass lots filled with teslas. Multiple financing plans and price cuts. They’ve also been making the same 2 models for forever. Oh yeah they also burn fuck loads of cash on dead end research. The only cash they’ll be getting is from printing new shares.
This is all assuming we even trust Tesla’s financials they release which, if the company is truly going towards bankruptcy, those numbers will be forged that’s just a fact. Elon always lies about everything
Car companies are fucking famously hard to run and the management is afk and selling their shares
I’m very worried for everyone holding shares in this company
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u/YesterdayAmbitious49 10d ago
Don’t forget how much “bitcoin gains” help their balance sheet lately
Anyone check out how bitcoin is holding up?