Tuesday, November 19, 2019

Tesla Enterprise Value Now Over $75 Billion


eahilf said...

Is that good or bad? -- LOL

CP said...

It just seems unreasonably high compared to the revenue of Tesla, or the number of units sold by them. You can't make a profit comparison because they aren't profitable.

eahilf said...

It just seems unreasonably high compared to the revenue of Tesla

Yes, I know -- it was just a joke.

In an earlier post you suggested there is something wrong with the markets -- any ideas about might that might be?

Maybe persistent short covering was or is the reason for the recovery of TSLA after the drop -- but is that still going on? -- who is investing in TSLA at such a high valuation? -- (related but parenthetical: do you think it's appropriate to compare the valuation of TSLA to other auto companies?) -- do day-traders play this stock?

If you follow the dumb money popular press, liquidity provided by the Fed explains a lot -- but none of that liquidity is flowing into my account.

Normally I trade, i.e. more often than I invest (especially at these levels) -- most often I trade by selling puts, including on leveraged ETFs -- but even selling far out-of-the-money puts can result in a BIG ouch when the market undergoes a vicious correction, as it did starting about this time last year.


eahilf said...

Also I assume you saw CHK is now a penny stock; they put some 'going concern' language in their most recent earnings release -- its bonds were just downgraded by Moody's.

The whole energy sector is still a mess; seems frackers who debt-binged to acquire acreage when oil was selling at much higher prices are on life support nowadays -- I wonder how many will survive (and how much longer a knee-jerk bearish trade by selling every uptick in that sector will work).

CP said...

"Managements could stop buying assets, sell overpriced (i.e. low earnings relative to purported asset value) ones to third-parties, and return capital to shareholders. But managements need to own assets to justify being paid. And managers with bigger empires get paid more."

"Like many small banks, maintaining this as a going concern seems to be of dubious value to shareholders, compared to the immediate return (and opportunity to redeploy capital) that they would get if the bank were sold. Instead, its purpose as a company might perhaps be better understood either as a jobs program ($1.65 million of salaries) or as civic monument with a copper cupola."

"Public company managers have it unbelievably good. If they have a success, they take credit and a huge share of the reward. If they have a failure, they might be like this guy and considered blameless. It seems that even professional investors (providers of capital) view the job of the oil and gas company CEO as producing oil and gas rather than as growing their capital."

"So all I can think of is that it was an enormous short-covering rally. Usually seeing things like ARK selling and retail selling, would be met with a pop and fade, but not here. I have seen so many anecdotes of Twitter Tesla bears covering and moving on, so that hasn’t really happened before. I guess there could be fundamental buyers, but I just can't understand what has changed that much unless this theory applies that people are just so convinced that Elon controls earnings from here on out and will keep finding ways to make them "great.""

eahilf said...

Speaking of broken markets (or maybe not):

Carl Icahn Losing Tens Of Millions As "Big Short 2" Trade Turns Sour

Ironically, despite a year of record store closures and continued retail bankruptcies, the CMBX 6 series index has climbed about 10% year to date, suggesting either growing optimism about the malls, shopping centers and outlets connected to the index, or merely a flood of liquidity forcing yield-starved investors to bid up every corner of the market, no matter how risky or mispriced it is.

eahilf said...