It bails out Elon and means his Tesla shares (borrowed against to purchase Twitter) won’t be liquidated as Tesla’s share price continues to decline, using xAI investor funds. He uses hype and sentiment (inflating valuations) in the capital markets to always stay slightly ahead of consequences.
Sure, but it's becoming increasingly obvious to everyone that the American car industry is in major trouble. In a decade, I'm confident in saying a lot of American car companies will not exist.
We see it in our day-to-day lives. People aren't buying new cars. Cars on the road are getting older and older. Views of Tesla continue to dwindle. Anything Stellantis is on life support. I mean, Chrysler has literally one car. GM is clawing for any sort of relevancy. And Ford is only afloat because of toxic masculinity. We all know that it's bad in the US, and we know outside of the US it's 100x times worse for these companies. We also know the US car market as a market is getting overshadowed.
It doesn't matter what stupid investors think. We can see the writing on the wall. These investors are delusional, period.
Tesla shares are higher than when Twitter was acquired. 'Continues to decline' sounds like weasel wording that the media likes to use to push a narrative that doesn't exist.
Edit: Comment flagged for pointing out inconvenient facts, it's wild out there
You forgot to mention that China, Vietnam, Thailand, and Indonesia are all betting big on EV production. China is of course the main competition, but it's telling just how stiff the competition is getting across the board. BYD is currently making more cars than Tesla, with more advanced battery technology and comparable build quality, for a fraction of the price of any Tesla.
Meanwhile Elon is too busy rage-tweeting and K-holing to work on any of the things Tesla promised it would do this year, like release a model 2 or something with robots
The auto tariffs are a present for Elon. Teslas are the most American of American cars, and while they do still use foreign parts they use the least out of everyone.
On top of that, in the EV category, Tesla is pretty much the only one made in the US.
Why would they continue to decline? If all that information is already known, why isn't it priced in and why isn't the best estimate of Tesla's price in 6 months equal to today's price plus the return of Treasuries?
Tesla's current P/E ratio is 134. To be a rational Tesla investor, you'd have to think it has almost 600% profit growth potential to reach the long-term American blue-chip average P/E of ~20.
That kind of growth would be difficult for a new entrant, but for an incumbent that's been around a while and already seeing sales decline, it's a pipe dream. Of course, it's not all about cars for Tesla. They're betting big on humanoid robots and "full self-driving", although they've been stuck at Level-2 self-driving for years and the robots, well... Let's just say we don't hear much about them for a reason.
Of course, Tesla has never been a company for rational investors. I used to hold a lot of Tesla stock back in 2017-19 when they had plenty of doubters. I remember seeing how Tesla owners would organize themselves grass-roots-style to show off their cars and convince others to go electric. The company was getting a ton of free marketing and had a very devoted customer base. My, how things have changed. Now, they have to shut down showrooms across the country due to "terrorism".
So where is the upside? Well, protectionism could help them in the US market, but they're a global company with stagnant sales in the US, so it's hard to see tariffs helping more than they'd hurt. And that's pretty much it for upside AFAICT.
It's true that Tesla shares recently declined, but the context is important: during 2022-2024 Tesla shares were trading between $100 and $300 (with high volatility), in October 2024 they were at $200-$250, then after elections they skyrocketed to the all time high of $488 (for no fundamental reason), and since then the stock is falling. It's $263 right now - after the latest declines the stock only returned to the price that's still higher than before the elections, and is higher than the 2022-2024 average (which was already unreasonably high and totally disconnected from earnings). So these declines are nothing, at least not yet.
FWIW there was a fundamental reason for shares to spike after the election: The elected regime was one that is very corrupt and self-serving, and was likely to do everything in its power to make money flow towards the companies it owns.
By now, though, it's seeming more like they're too incompetent to do that. They'll probably still do it, but they'll crash the whole economy at the same time so the money that's flowing to Tesla won't be worth a whole lot. But it was a reasonable prediction at the time.
That's fine if that is the argument (11/5/2024 vs today) vs all the gains since that period lost, I'm not willing to argue the point to death, the brand value destruction will continue. The fundamentals will catch up to the price eventually with enough pressure.
NVDA? Not yet, but certainly CoreWeave based on their IPO outcome [1]. TSLA made me very wealthy from IPO to when I exited, my "crocodile tears" are "Elon is a terrible human attempting to destroy democracy and something should be done about that." If you disagree, we have nothing to discuss, there is nowhere to meet in the middle on that. I have no strong preference how he is disempowered and prevented from using his wealth and power to harm.
"Are you just mad he is a powerful bully?" Yeah my dude, that is the problem. If it is a crime to not like people who hurt others with their power, guilty as charged, unapologetically. Am I supposed to feel bad about that position? I do not.
“Continues to decline” is a cushion for the next sentence “downgrade to sell” which cushions you from the ultimate, “new marketing leadership with Barron Trump and someone named Alien Brainrot”.
After the unprecedented move of the President of the United States anointing Musk as a made man and member of Donalds swamp, all from the White House. In additional multiple other highest members of Trump's government went on TV and said 'invest in Tesla'. That is not a healthy stock surge. It is a pure DC swamp play.
What do you mean by this? Do you not agree these events happened in an attempt to bring the stock back up? That government officials gave stock advice on TV that would cost financial advisors their licenses, for the benefit/as a favor to Musk (a billionaire), the very definition of DC swamp behavior, government officials doing illegal/immoral favors for their rich sponsors.
Not to be pedantic, but you’ve confused acceleration with velocity. How far you’ve traveled will depend on how long you’ve been falling, and what your starting velocity was.
Still, you have to give it to him, it works, and this has allowed him to do some incredible things beyond just hype.
What he's pulled off with xAI more recently is really quite incredible. And obviously this isn't first time Elon proved he can execute better almost anyone else.
I don't really have opinions on him as a person, but as a an entrepreneur you cant flaw him imo. He always finds a way to beat the odds.
>"He's a terrible human, but look at the model benchmarks!"
That's basically the response to deepseek? Aside from a few people pearl clutching about "chinese propaganda" or whatever, most people praised its efficiency and performance on benchmarks. Credit where credit is due. Also note that China is an authoritarian regime where there's no separation between the state and private enterprise. Every company of non-negligible size has a CCP committee inside of it.
You don't have to meet someone to know they're awful. I've never met Adolf Hitler - but I'm pretty confident he's an awful person.
Elon Musk uses his immense wealth to cheat. He's infiltrated the government and uses his power to directly harm Americans, in order to further enrich himself. In addition, almost everyone who has worked for him has corroborated that he is an awful boss.
He is also prone to dishonesty. When confronted with something that requires accountability, his strategy is to protect his lies with newer lies. FSD, the state of twitter, DOGE, and on and on. He is so dishonest that it's almost always safer to assume he is lying than to give the benefit of the doubt.
But, even on a personal level, he struggles to stay afloat. He has impregnated multiple woman and is practically forming an army of illegitimate children. Those who were close to him either speak of him with extreme disdain or not at all. The only child he has any connection to is used as nothing more than a political pawn.
The only reason anyone even thinks he might be okay is because he's rich. We tend to have an extreme bias in favor of the wealthy, almost akin to a brainwashing. The reality is being rich does not correlate with being moral or decent. It doesn't correlate with being intelligent either, but that's a separate conversation.
I know I'm late to reply, but to explain since many people seemed to be confused by what I said –– I think the speed at which xAI has caught up with the competition from nothing is quite impressive, and the lengths they had to go to to do this, even more so.
Grok is now competitive with the other big players in the foundation model space. To do this they had to recruit some of the top AI talent, speed run the building of massive AI data centers and of course execute well to bring it all together.
All of their competition have either had a time and/or financial advantage over xAI so it's quite impressive what they've managed to achieve given this. Deepseek's achievement in this sense is more impressive so I'm not delusional, but I was still very surprised to see how good Grok 2 was.
