Tesla’s Double-WTF Chart of the Year

Look, I’m rooting for Tesla, a tiny auto maker shaking up the giants, with its global market share of 0.5% and $862-million loss in 2019. But Tesla gets to have supernatural shares that can go anywhere at will. 

By Wolf Richter for WOLF STREET.

OK, I know, nothing matters, fundamentals certainly don’t matter, and for Tesla, they never have mattered to begin with, but this is nevertheless quite a spectacle. The other day, I swear, I saw Elon Musk walk on water, strolling on the Bay at lunch time, not far from the factory in Fremont. He’s performing miracles on a daily basis.

Tesla’s shares [TSLA] closed at a new closing high today of $949.92. This beat the prior closing high of February 19 of $917.42. But it remains a tad below the intraday high of 968.99 of February 4. So let me walk you through this in chronological order because it’s just too juicy to pass up.

On February 4, 2020, when Tesla’s shares hit $968.99, I posted the “WTF chart of the year,” calling Tesla a “Supernatural Phenomenon.” The shares had surged 170% from mid-December. And Tesla’s market cap had skyrocketed during the less than two-month period by over $110 billion:

Then it came unglued. On the way down, on February 13, Tesla sold new shares at $767 a share and collected over $2 billion in cash from investors. This was a wise move for Tesla. Perhaps Musk saw that the pandemic might be shutting down the factory in Fremont, after it had already shut down the factory in Shanghai, and perhaps he saw that Tesla would burn through cash a lot faster during the pandemic than before, and it was a lightning-fast drive-by share sale.

And shares swooned. Then on March 18, Tesla shares plunged another 16% to $361.22, amid allegations that it was flouting the lockdown order of Alameda County, by running two full shifts at its Fremont factory. This was a confusing story with allegations and counter-allegations, that then threatened to spiral out of control, and we won’t get into it.

Nevertheless, that fateful March 18, I posted the new version of the WTF chart of the year, one of the most majestic double-sided spikes:

And then the whole circus started all over again. Since March 18, the stock has re-skyrocketed 163%, and Tesla’s market capitalization has re-skyrocket by $110 billion, which brings us to the new-and-improved Double-WTF chart of the year.

Discussions of Tesla’s fundamentals are an exercise in futility, because they never matter. Tesla builds cool cars and it builds solar panels. The US solar panel industry has gotten crushed by China’s state-supported solar-panel industry. And the US auto industry is not a growth industry either. Unit sales in the US peaked in 2016, at just a tad above where they’d peaked in 1999 and 2000. Auto sales in the EU are even worse. And even in China, the biggest auto market in the world, auto sales declined two years in a row, not counting the fiasco in 2020.

So solar panels and autos are tough industries to compete in.

But Tesla put EVs on the map, and made them cool, and it caused an entire industry to take notice, and after years of blowing them off, automakers are now all scrambling to produce EVs in the hope that they can be manufactured profitably someday, and that’s a great thing.

And the luxury sports-sedan makers such as BMW and Mercedes – which are in the same pricing segment as Tesla’s vehicles – have gotten their sacred German pie eaten into by Tesla and now they too take EVs seriously. Shaking up these German automakers was quite an accomplishment. And it was a sight to behold.

Tesla also accomplished an astounding feat in that it made $0.08 per share in net income in Q1, after losing $4.10 a share in Q4. For Tesla, which has never in its entire existence made an annual profit, any quarterly profit is a big and rare feat, no matter how small the profit. But at this rate – losing over $4 dollars one quarter and making 8 cents the next quarter – it’s going to be tough to make a profit for an entire year.

And that doesn’t even account for the massive shock this industry is experiencing this year. The numbers Tesla (and the others) will post for the year will be a doozie. This year is going to be a mess for everyone.

So if Tesla manages to someday make an annual net profit of $1 a share, that would be a huge accomplishment. For automakers, a P/E ratio of 20 during good times is high. OK, allow Tesla a P/E ratio of 40 because it’s Tesla and because Musk walks on water. At $1 a share in annual income, it’s shares would then be richly valued at $40. You can’t even find that price on the charts above.

Look, I’m rooting for Tesla. It’s a tiny automaker among giants. And it’s shaking up the giants and getting them to react. But it’s still just a tiny automaker. In 2019, Tesla delivered 367,500 vehicles globally. The entire industry delivered 72.6 million vehicles globally. So Tesla had a market share of 0.5% (half a percent). In 2019, most of the automakers were profitable. Tesla lost $862 million.

In terms of market cap, the US giants GM (market cap of $44 billion) and Ford (market cap of $30 billion) combined are just 42% of Tesla’s $176 billion. The thing is, Tesla is one of the companies that have supernatural shares that can go anywhere at will.

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  107 comments for “Tesla’s Double-WTF Chart of the Year

  1. MCH
    Jun 8, 2020 at 10:11 pm

    Don’t forget Nikola. I can still get in at the ground floor.

    It will go to $1000 too. And thanks to the magic of reverse merger.

    Wait until the two merges… Nikola Tesla… holy crap.

    • Trinacria
      Jun 9, 2020 at 8:24 am

      Tesla’s name should be Tesla.com – this sucker has 9 x 9 lives.

  2. roddy6667
    Jun 8, 2020 at 10:12 pm

    The stock market is an irrational, random casino. Some people swagger out the front door with a gym bag of cash, a new Rolex, and a $2000 hooker. Most of the players will slink out the side doors trying to explain to their wives why they blew the rent money at the blackjack table.

    • MCH
      Jun 8, 2020 at 10:24 pm

      $2000 hooker? Serious? What kind of skank did you get…. in these days of Fed induced nuttiness, a minimally reasonable hooker should be at least $10k. 😀

      • roddy6667
        Jun 9, 2020 at 3:03 am

        Sorry, I’m not current on hooker pricing. I have always relied on talented amateurs. Does Consumer Reports cover this market?

        • RagnarD
          Jun 9, 2020 at 5:36 am

          Actually, there was an English Russian based expatriate focused
          Publication put out by Matt Taibbi and Mark Ames back in the late 90s – early 2000s called The Exile, (also a website called TheExile.ru). Among many other things, They had Hooker reviews which were fucking hysterical. This was after the wall came down, during the crazy Wild West cowboy times over in Russia/Moscow. They finally got chased/ threatened out of the country by Putin & company. Remnants of it are still on the web, And there is a compilation book out.

      • Lisa_Hooker
        Jun 9, 2020 at 12:52 pm

        That’s just for the perp walk out the door to the car. Any other services are extra charge.

    • melanie
      Jun 10, 2020 at 3:11 pm

      I lost so much money in this market and I do’t know what to do now I am crying every day.

  3. WES
    Jun 8, 2020 at 10:24 pm

    You’re just not looking at the graph correctly!

    If you invert the Tesla’s graph, it shows two absolutely wicked dead cat bounces!

  4. Benny binion
    Jun 8, 2020 at 10:25 pm

    Tesla will be the investment equivalent of drawing to a gut shot straight

    • Thomas Roberts
      Jun 9, 2020 at 3:50 am

      Idk they make a car that’s slowly learning to drive itself, that’s pretty cool.

      The big thing right now though, is Musk. He just successfully got the us back into space. Now the us subsidising SpaceX and forcing NASA to help make them a rocket, that we will then be dependent on. Is a sketchy example of pubic private partnership. Yes. Ridiculous, insane perhaps, yeah. But, now in a era of unlimited military spending and the desire to create a new “Space Force”, Musk will have congress by the balls, when everyone starts asking for their bailouts.

      • Bobby Dents
        Jun 9, 2020 at 4:59 am

        Back into space???? Not really. Talk about a con.

        • Thomas Roberts
          Jun 9, 2020 at 1:28 pm

          To the space station at least.

      • Lance Manly
        Jun 9, 2020 at 10:04 am

        Compared to the Boeing Starliner debacle, SpaceX deserves the win.

  5. thechaser
    Jun 8, 2020 at 10:28 pm

    actually the tsunami of liquidity has made the capital markets a large WTF; it was something to behold today as the trillions in whatever used to be called “money” washed onto the shores of the equity market today; also the vaunted yield curve control turned in a marvelous performance as well

    simply put if alchemy had worked before we would all be living in “Wall-E” land… come to think about it, hmmmm

  6. BuySome
    Jun 8, 2020 at 10:52 pm

    When it gets to $1200 per, does Treasury send out 1 free share to each of us? Are they readily exchangeable for all debts public and private?

  7. Pedro
    Jun 8, 2020 at 10:58 pm

    Wolf: isn’t market cap only half the story? Tesla doesn’t have the same debt load as other car makers. Ford has around $169B while Tesla has about $15B

    I liken it to a buying a $1m home from an owner that has 20% equity in the home vs a home owner that has 90% equity in The home. The home price is the same, however the equity portion (market cap) is vastly different 200k vs 900k. Buying out their “share” would be drastically different but would also come with new debt to cover the difference or outright debt extinguishment if you were to use all cash. So market cap(Share) isn’t really the whole story.

    Market cap only really measures equity stake and doesn’t necessarily incorporate the value of the debt that defines the value of the whole company. Ford has a cap of $29B , $34B In cash and $169B in debt. That puts the total value of the company at roughly $170B to aquire debt free .. very close to that of Tesla’s (net debt)

    Granted, Tesla’s current valuation is based on the hope that they one day will product as many cars as Ford.. fingers crossed lol!

    • Debt Wazoo
      Jun 9, 2020 at 2:43 am

      > liken it to a buying a $1m home from an owner that has 20% equity in the home vs a home owner that has 90% equity

      No, that’s the wrong analogy.

      Markets should price a company’s shares at the value of its assets AFTER subtracting out its debt. (if they aren’t pricing it this way, you can get a free lunch by doing so yourself).

      The correct analogy would be $1m home with 20% equity vs $222k home with 90% equity. The equity is worth $200k in either case. The sales price of the house doesn’t correspond to any frequently-used figure in corporate finance — it would be something like “value of assets ignoring liabilities” which is not a useful number because liabilities matter.

      • Pedro
        Jun 9, 2020 at 9:37 am

        To buy Ford and have no debt it would cost $170B dollars. That is a fact.

        The value of ford as an asset is therefore $170B ( no liabilities )

        The value of Owning ford equity is $30B

        Market cap is not a measure of the underlying asset if you include the debt funded portion of the business. Owning the ford business debt free would cost $170B

        That is why ford has an incredibly low Market cap, investors realize they’re buying a lot of debt with each share. Which could be ok if they makes profits and payed dividends. That’s the trick in investing, knowing what that relationship means in the long run

    • Brian White
      Jun 9, 2020 at 7:12 am

      Market Cap is the company’s price. As Mr.B said, “Price is what you pay. Value is what you get.”

      Those two concepts are more disconnected here than in most companies these days… And that’s saying something!

      I love Tesla as a company but not as an investment.

    • Canyonaro
      Jun 9, 2020 at 8:43 am

      Ford has a financing arm that has billions in assets against the debt that you cite. Auto analysts back it out when looking at the auto business.

      Tesla’s valuation was batshit crazy at $200/share. It’s completely disconnected from reality at these levels. Literally zero to do with the underlying company. It’s just a number to very on the roulette she’ll and people are betting on it. Most of their investors can’t read financial statements & take every pronouncement from Musk as the Word of God.

  8. Inno
    Jun 8, 2020 at 11:03 pm

    I remember when Apple celebrated their 1 millionth phone, as the carrier I was with placed an order for 100M of a dead end Motorola attempt to follow…

    Market share is a bad metric for disruption.

    That said, I’ve never owned a share of Apple, nor of Telsa…so you can take that as you will…

    Hell, I still own F.

    • Saltcreep
      Jun 9, 2020 at 11:56 am

      Hey, I’ve currently got a Motorola, which I got simply because it was the cheapest smartphone in the shop, bought to replace my previous Nokia, also bought based on the same rationale, which lasted me nine years before I dropped it and it broke…

      • Lisa_Hooker
        Jun 9, 2020 at 1:01 pm

        My Nokia Blackberry clone is completing its 11th year and going strong. And no one writes spyware (known to you all as apps) or viruses for Symbian.

        • Saltcreep
          Jun 9, 2020 at 3:11 pm

          Confound it, Lisa! That’s me one-upped once again.

          It’s also a bit fascinating to see how attitudes change over time. I remember people many years ago talking about the ‘wow-factor’ of a top notch new mobile in e.g. a business meeting, whereas now, even as I myself pretend to run a small technology related consultancy, I reckon I’m better off showing complete disain for such gadgets…

        • Saltcreep
          Jun 9, 2020 at 3:18 pm

          Also, just to add, in a more on-topic way in respect of Tesla, the popular trend in my country currently seems to have eviscerated Tesla sales in favour of the Audi e-tron, which appears to have completely turned tables on the Model 3.

          And that is an added huge risk with Tesla, I reckon, as the buyers will from one year to the next very readily switch to anything else that appears more socially enhancing at the time.

  9. Cas127
    Jun 8, 2020 at 11:05 pm

    It would be interesting to hear the stories of similar companies in history (I’m sure there are many) that later went on to implode or stagnate for decades.

    But the very fact that these have been lost to memory is a “monument” to the lottery ticket mentality that Wall Street works very hard to cultivate in the public.

  10. Willy Winky
    Jun 8, 2020 at 11:24 pm

    If I was living in America and paying taxes, I’d be rooting for Tesla to fail asap.

    Then my tax dollars might get directed to something productive… maybe better schooling for inner city kids… instead of into the Tesla incinerator and Elon’s pocket.

    • MCH
      Jun 9, 2020 at 12:31 am

      Who would we have to thank I wonder for all of the Federal and State dollars being incinerated by Tesla via carbon credits… would it be the same wonderful people paid endless lip service about channeling money for better schooling for inner city kids… all the while letting those cities rot.

      The world wonders.

      Yeah, I know, we want to blame those dirty rotten oil companies, but then we couldn’t live with the lie in the morning.

      • Bobby Dents
        Jun 9, 2020 at 5:00 am

        Oil globalism is a large part why Telsa rent seeks.

        • MCH
          Jun 9, 2020 at 8:54 am

          Get rid of all of the oil companies and Tesla will die? Is that it?

          Let’s say that oil flow suddenly stopped today…. not more oil, what do you think will happen to Tesla stock in the short term?

    • fajensen
      Jun 9, 2020 at 7:24 am

      Well, If you *were* living in the USA you would know into your very bones that every dollar given to the government is wasted, doubly so if any was given to inner city kid’s schooling or clean drinking water, and that every dollar given to private business, especially defence, is exactly what makes the USA The Greatest Country on The Planet :)

      It is just the way the USA innovates.

      “Government” can – per definition and US-capitalist ideology – do nothing good ever, thus all “innovation” must to come from Private Enterprise (even though government funded research created it to begin with and government funded the “private enterprise” + management fraud and waste, for the entire product development phase). ‘Tis just how it’s done.

      Tesla is basically like Thiokol during the Apollo Programme!

      • Ed
        Jun 9, 2020 at 2:19 pm

        Ford is the one who has done it without Government Money.

        I sometimes wonder why Tesla gets all the love and not Ford. I do realize that Tesla’s technology is wonderful and novel. But Tesla gets lots of love from people who I believe are Libertarians.

        Love is not rational.

        • Willy Winky
          Jun 9, 2020 at 4:38 pm

          Not sure what is so wonderful about Tesla. Yes, the PR people who work for Tesla say it’s wonderful (they would…).

          The batteries are made by Panasonic.

          The Prius has similar tech and has been around for a lot longer. (I wonder why Tesla gets all the love and not Prius)

          Tesla is ranked very badly in terms of reliability:

          ‘This year, Tesla jumped four spots as a brand on the reliability rankings, though it still ranks toward the bottom of the list in 23rd place. The predicted reliability score uses a 100-point scale and Tesla earned 39 points.’

          (sorry Tesla PR team…. you guys must hate when people point this out…. better send in the trolls to drown this out!)

  11. Jun 9, 2020 at 12:49 am

    Point 1) The whole stock market is nuts, tech especially – which brings me to point 2) Tesla is much more than a car company.

    Sure craziness abounds. Why should Tesla be the exception? After the inevitable massive shakeout, Tesla will be the big winner.

  12. Phoenix_Ikki
    Jun 9, 2020 at 1:05 am

    Tesla, perfect example the power of a cult. Jim Jones got bunch of people to drink the Kool Aid, Adam Neumann fooled a bunch of people and Softbank into worshipping WeWork as the next coming of Christ. The list go on and on, sadly people will never learn and they will get burn over and over again. With so many cheerleaders out there for Tesla, that time might come eventually but it sure can last a lot longer as well. For some strange reason, Murica has a tendency to gravitate towards egotistical, god complex business or tech wannabe messiah. EM fits that bill perfectly and our general public obsession with him reflect a lot about how we are as a culture and what we value the most.

  13. Island teal
    Jun 9, 2020 at 1:14 am

    Always have to remind everyone. It’s pronounced Tessssla 😂😂

    • AndyK
      Jun 9, 2020 at 5:12 pm

      Must admit I always thought it was pronounced “DeLorean”…

  14. name
    Jun 9, 2020 at 2:36 am

    These comments are all littered with childish nonsense.

    Look, it’s clear. Tesla is steeped in fraud. Musk is a guy who is obsessed with the stock price, obsessed with “burning the shorts” and has shown repeatedly that he considers himself above the law. People should really learn about who this guy really is. He’s spending tens of millions of dollars per year on his own personal PR machinery to prop up a totally distorted and baseless image of himself. Behind that carefully crafted facade, the picture is extremely ugly. As for the stock, people who have been watching this thing closely have been screaming from the rooftops about increasingly brazen fraud for some time now. Even Ralph Nader went on CNBC and suggested this needs to be investigated. SEC has always been a joke, but under this administration it’s obviously even more obvious. The problem is I don’t even know where to start with this comment. Where do I start? Talk about Musk? Talk about Tesla’s voodoo accounting practices and shady balance sheets? The fake buyout offer, which forced even Trump’s SEC to allege securities fraud? The Solar City bailout, which is a big bag of worms unto itself? Or, do we start with the most recent fiasco, which is the HIGHLY unusual deluge of activity in the options market? It’s overwhelming. All you really need to know is that TSLA is – probably still – the most shorted stock in the market – or at least it was not that long ago. Any stone you pick up with this company, you will find worms infesting. It’s far from the only fraud in this market, but it’s the biggest of the bunch, the post child if you will.

    • Phoenix_Ikki
      Jun 9, 2020 at 10:35 am

      That’s the problem, our market and the masses have mostly decided if you scream from the roof top calling out BS, instead of trying to listen, they either shoot you down or laugh at you for being doom and gloom. How much does our collective masses value a thin skin, narcissistic fraudster? Apparently multiple billionaires…

    • Cmg
      Jun 12, 2020 at 10:16 am

      The rot and scandal behind musk/Tesla is so fascinating-are there any good books written or being written? Something like bad blood, about Theranos (I’ve never read a book so fast)….I want to learn more about what a piece of shit musk/Tesla is.

  15. Steve
    Jun 9, 2020 at 3:59 am

    Elon has persuaded J Powell to underwrite the next capital raise. TSLA is planning a hostile takeover of GM, Ford, Toyota and VW all in a single transaction. GS will be bookrunners.

    • char
      Jun 9, 2020 at 12:17 pm

      Toyota and VW are not targets you can do a hostile takeover with. Japan and Germany would stop that. With Ford there is no need for a hostile takeover. Just do an offer and it will be accepted. But why would you do that? It is a death company only slightly healthier than Fiat. That leaves GM. Does the US wants one or two car companies?

  16. Prof.Emeritus
    Jun 9, 2020 at 4:02 am

    …meanwhile VW replaces it’s EV-loving CEO.
    On one hand I’m honestly thankful for these investors for making the electric future come true, it’s a much brighter alternative than buying oil from the villain organization known as OPEC.
    On the other though – I’m honestly curious how they imagined it. Drive prices so high so that everybody will believe it’s not just a great innovation, but also the most valuable thing on Earth? Interesting scheme, I must say.

    • MCH
      Jun 9, 2020 at 8:56 am

      See Apple.

    • char
      Jun 9, 2020 at 12:30 pm

      Cars are not free market goods sold on a free market. From the viewpoint of the state electric cars have enormous advantages above ICE. They are also better for nature and the health of the human population. And for the consumer: Price is important. That is why 90% of a new cars are Darcia’s.*

      * If people buy a car priced like a cheap BMW then they can buy an electric car. The market for cheap cars is small

      • Lisa_Hooker
        Jun 9, 2020 at 1:07 pm

        “cheap BMW” is an oxymoron.

        • char
          Jun 9, 2020 at 2:58 pm

          A not so expensive expensive car.

      • Anthony A.
        Jun 9, 2020 at 6:00 pm

        The last cheap BMW I saw was in a scrap yeard.

      • Daedalus
        Jun 9, 2020 at 6:28 pm

        Back in the day, I took a course in thermodynamics. This arcane exercise (complete with partial differential equations and stuff like ‘entropy’ and ‘enthalpy’) was concocted in the 19th century. Funny thing is, however, it works. The only exception in the past century (plus) is when superconductivity (or fluidity) is involved.

        One of those laws states that whenever energy changes from one form to another, a portion of it’s utility is lost (usually to heat, random molecular activity). Thus, when you burn fuel in your ICE, the chemical energy of the fuel is greater than the mechanical energy your car develops.

        Where do you think electricity comes from? Turbines turn the rotors that induce the electric current.

        Let’s follow the chain: I live near what used to be the largest coal-fired power plant in the world. It’s still in operation. The chemical energy in coal heats water and produces steam (power loss). The steam pushes the blades of the turbine (power loss). The turbine rotates the coil that induce an electric current (power loss). The electric current travels over wires to where it it used (power loss). There, it charges a battery (power loss) which drives an electric motor (power loss) that causes the car to gain kinetic energy (power loss).

        Suppose, instead, the coal heated water to produce steam that drove a piston to create kinetic energy (Stanley Steamer, or direct steam turbine propulsion). In theory, far less power loss, thus, in fact, far better for the environment. Less energy is wasted.

        If your power plant is fueled by any fossil fuel, there is far less wasted energy using an ICE than an electric vehicle.

        • Massbytes
          Jun 9, 2020 at 7:01 pm

          Daedalus, You should ask for your money back on that course you took. EVs are vastly more efficient with energy than ICE vehicles. That is well known.
          I guess all of the auto companies in the world that are going to EVs must be confused about their energy usage also, because all of them, and I mean all, are trying desperately to produce them.

        • Max Power
          Jun 9, 2020 at 7:49 pm

          As the commenter above me mentioned, you need to ask for a refund on that thermodynamics course.

          You’ve got it completely opposite when it comes to efficiency. The latest generation of combined cycle power plants using H-type turbines are more than 60% efficient at converting gas to electricity. IC engines are barely 20% efficient; the rest is lost mostly as waste heat. Also, with EVs you get to recoup quite a bit of energy through regenerative breaking.

        • Dan Romig
          Jun 9, 2020 at 8:45 pm

          Formula 1 has the best technology for energy efficiency from fuel.

          The 1.6 liter V6 turbo Mercedes hybrid F1 produced at Brixworth, UK has 50% thermal efficiency! They will be on display at The Red Bull Ring, Austria on 3-5 July.

          Speaking of a “cheap BMW”, at the beginning of May, I picked up a sweet low mile lease-back 2016 M4 for 60 cents on the dollar of its sticker price. I did buy a 3-year 36,000 mile extended warranty bringing up the cost to just under 64 cents/dollar. Unfortunately, the dealership wouldn’t let me write the check to the lot’s owner Roger Penske.

          No, I don’t really care about how efficient it is (selfish, I admit – just a little more cash to spend at the pump), but I do care about how it performs. Oh yeah, it performs. In fact, if measured in performance to dollars spent, it would be difficult to do better IMO.

          And the nice thing about my ICE vehicle is that taking a 2,000 km road trip in it is much more convenient than driving a Tesla the same distance.

        • Prof. Emeritus
          Jun 10, 2020 at 7:41 am

          The Carnot-cycle maxes out at ~65% efficiency for such old-school inventions – and even that is a theoretical maximum, the real-life values are closer to around half of that. Electric machines have no such limits, the waste energy can be kept minimal – the worst part is in fact not even related to electricity transformation, but to the chemical energy storage (aka battery), but even that has 80%+ values nowadays.

        • Dan Romig
          Jun 15, 2020 at 8:18 pm

          News on Mercedes’ F1 engine program for those Wolf Street readers that watch F1:

          “Mercedes Formula 1 engine boss Andy Cowell is to leave the company.

          Cowell led Mercedes High Performance Powertrains through the development of the turbo hybrid engine with which the team have dominated F1 for seven years.

          The 51-year-old is leaving Mercedes to “seek a new engineering challenge”.”

          Whatever that challenge is, I would bet that Mr. Cowell will find a way to answer it! His only hint is that he seeks, “… a new engineering business challenge.”

  17. NikolaTom
    Jun 9, 2020 at 4:34 am

    You guys are hilarious. Thanks for my morning laugh. I bought VTIQ when became available and looked at it yesterday… And had my own personal WTF moment. Seen these before but never rocked one. Now all my friends are experts and want to give me advice. It’s a hoot!

  18. ed
    Jun 9, 2020 at 4:43 am

    The stock price has no longer a correlation with reality. Tesla is treated as the new hero and everything the hero does is ok.

  19. Andy
    Jun 9, 2020 at 4:52 am

    With Fed induced zero cost money, Tesla’s future funding is secure.
    EVs are coming because they are cheaper than ICE total lifetime cost.
    And Tesla will remove the dealer network cost – online sales and minimal maintenance required.
    Performance will beat any – repeat, any – ICE.
    Got a lot going for it.
    Big Auto and Big Oil have a Big Problem.

  20. historicus
    Jun 9, 2020 at 5:27 am

    Wolf, you are rooting for a company that gets piles of subsidies?
    Really?

    • Jun 9, 2020 at 10:07 am

      The legacy automakers needed to be shaken up. And Tesla came along and did it. Now the entire industry is changing. That’s a good thing. But Tesla’s financial side is a taxpayer supported scam.

      • Petunia
        Jun 9, 2020 at 12:25 pm

        Wolf,

        Heard a guy out of New Zealand comment that a local used car dealer is selling his cars online and offering an airline ticket with the deal if you are not in his area. Thought you might find it interesting. The economy there is hurting as well.

        • Jun 9, 2020 at 3:54 pm

          Petunia,

          Yes, desperate times call for desperate measures. I can see the logic — if he has NZ$2,000 gross profit built into the deal, and if it costs NZ$400 for a ticket (I’m just wildly guessing here, assuming he doesn’t mean first class), it would just be another expense in the deal. And maybe he’ll try to work part or all of that into the trade-in allowance and mark up the interest rate just a little more… you know, trying to stay in business.

          Plus, he seems to be getting a lot of free publicity for this, around the world… 🤣

        • Willy Winky
          Jun 9, 2020 at 4:28 pm

          This is a very old trick.

          In the 90’s I worked with a small-scale property developer on projects in HK and Macau.

          When the market went sideways after the Asian Financial Crisis, he offered a free car with the purchase of a flat in one of his buildings.

          His audacious marketing ploy got him free exposure on the Property Post but I don’t think too many people bought units thinking they were getting a ‘free’ car….

          He was a pretty smart operator so I don’t think he thought that people would buy because of that either…. but he got a front page story :)

      • char
        Jun 9, 2020 at 12:34 pm

        “Is a taxpayer supported scam”

        Like every car maker. Though in Tesla’s case a bit obvious.

        ps. not the selling of CO2 rights or tax break subsidy etc. That is not a scam but a way the world works

  21. historicus
    Jun 9, 2020 at 5:30 am

    When the cost of money is near zero for many …. pegged by central bankers ….. what accuracy is there in evaluations?

    • WES
      Jun 9, 2020 at 12:32 pm

      Historicus:

      When the cost of renting money is zero, then obviously the money is worthless!

  22. Mark
    Jun 9, 2020 at 5:33 am

    The party’s not over ’till the Tesla bears sing

  23. timbers
    Jun 9, 2020 at 6:28 am

    Everything is going to be alright. Our leaders have heard the cries of pain from the people.

    To fix it all, they are wearing colorful clothing and kneeling when proposing laws for us they won’t let us read. This is what the Fed should, to. Wear color clothing and kneel. Maybe chant some tribal verses and shack rattles the emit smoke and dance in a circle.

    If they do this at there meetings with folks who call themselves reporters, it will help nation to understand what they are actually doing to help us.

  24. Max Power
    Jun 9, 2020 at 6:41 am

    In the EV marketplace Tesla has gotten a pass because basically it has been the only one who was making EVs on on a clean-sheet EV platform on a relatively large scale, while all the legacy automakers were building EVs using the highly compromised approach of trying to cajole electric traction onto existing ICE platforms. The result has been very unappealing EV offerings from the legacies, leaving the field wide open to Tesla.

    Over the next 2-3 years this situation is set to change materially, with the legacies finally starting to release vehicles built on their own clean-sheet EV platforms – especially in the non luxury segment. Examples are the VW ID.3 (and more importantly for the US market, ID.4) platforms and the Ford Mustang Mach-E.

    Once this happens – that’s when it will be time to compare EV sales between companies on an apples-to-apples basis. Therefore, for a true long-term investor it is futile to try and extrapolate what the future EV marketplace based on what is happening today which is what the Tesla fanboys insist everyone do. Maybe it would be a different story if the EV market already constituted a significant portion of the overall vehicle market but it’s not. It is still just a teensy portion of it.

    So, this context, Wolf is absolutely correct in labeling Tesla’s current market valuation is ‘WTF’ — regardless of what the Tesla fanboys might scream otherwise.

    • David Young
      Jun 9, 2020 at 10:17 am

      I doubt if the average TSLA speculator even cares about the long-term fundamentals. It’s all about a quick profit and confidence in their ability to get out quick enough to avoid a loss. I look at the wild swings and choose not to put my retirement savings there .

      • Rcohn
        Jun 9, 2020 at 11:24 am

        Fundamentals are irrelevant until they are and then they are the only thing that matters.
        Right now the only thing that matters is the Fed. But when politics start highlighting the massive inequalities that the Fed has created, the Fed will be forced to cut back its largesse to Wall St and fundamentals and realistic interest rates will matter

  25. timbers
    Jun 9, 2020 at 7:12 am

    The solution to any financial problems for Tesla is obvious:

    An app to buy a Tesla Car, like that one you can buy pizza thru an app for $16 without the knowledge of the pizza owner, who sells it for $24.

    Then Tesla can order thru this app and pay $16k for it’s own cars and the app will pay him $24k. If Elon buys all his cars thru the app, his stock will be worth much more than $1,000 a share. You see – free markets really do work.

    Problem solved. Thanks, Fed liquidity.

  26. Nicko2
    Jun 9, 2020 at 7:22 am

    I’d rather fed money go into Tesla than pumping up loss-making and polluting cruise/airline industry.

  27. Bet
    Jun 9, 2020 at 7:51 am

    I have seen this movie before. Back in 2000 and in 2007. TSLA is a classic double top on negative divergences. The first top is smart money the second dumb money. I traded it on the break up a couple weeks ago. I thought about making a t shirt that said
    “I traded TSLA and lived “. I have yet to see a chart like this end well. NKLA up 152 percent in one day. Yup. The good times will never end….let’s light this candle ..

  28. Seneca’s Cliff
    Jun 9, 2020 at 8:36 am

    Tesla is like the episode of the tv series “The Walking Dead” where they trick all the zombies in to going in to an old barn, then they lock the doors and burn it down.

  29. breamrod
    Jun 9, 2020 at 8:38 am

    For the gamblers out there the Tesla weekly options offer the most bang for the buck. by then most of the premium is gone and I’ve seen some of their options go from .50 to 50.00. Better than Vegas! lol

  30. Scott
    Jun 9, 2020 at 8:39 am

    Always short double tops of the crazies.

  31. timbers
    Jun 9, 2020 at 8:52 am

    The internets say companies don’t need to do or make anything anymore to make money because they should just buy the S&P stocks. They will make more profit that way. The internets are smart. That’s what Boeing and Hertz should have done and what everyone should do with their bailout money.

  32. Jun 9, 2020 at 9:16 am

    Why can’t Elon Musk come up with a scheme to raise enough cash to take over all the automakers in the world? With a monopoly, the shares would then be worth infinity squared.

  33. GSH
    Jun 9, 2020 at 10:17 am

    I won’t touch Tesla stock but I do like their Hardware 3.0. They developed their own custom silicon and software. The HW is shipping today. If they can pull this off, they’ll have an advantage over regular car companies or Boeing for that matter who apparently outsource SW.
    On SpaceX, the ability to land their first stage back on land is a sight to behold. Musk’s companies show good innovation. I’m not betting against them.

  34. Ted
    Jun 9, 2020 at 10:30 am

    Sure, and you probably think trickle down economics really works too. Aside from an excuse for the 1% accumulating more obscene levels of wealth at the expense of everyone else.

  35. Phoenix_Ikki
    Jun 9, 2020 at 10:35 am

    That’s the problem, our market and the masses have mostly decided if you scream from the roof top calling out BS, instead of trying to listen, they either shoot you down or laugh at you for being doom and gloom. How much does our collective masses value a thin skin, narcissistic fraudster? Apparently multiple billionaires…

  36. Brant Lee
    Jun 9, 2020 at 10:38 am

    This stock and other techs are the coffers of America. All collateral and property of the U.S. and its citizens have been gutted and borrowed against to produce and keep these stocks pumped up in glory. May it last forever (it had better last or our goose is cooked).

  37. Jun 9, 2020 at 10:41 am

    Last year an investment firm put out a prediction that Apple would buy Tesla. After borrowing cash to buyback shares, and then having even more cash thrown at them, what would stop M&A like this? Most major buyouts begin with the acquisition target taking on more debt. While the Fed has everyone’s back, even debt laden subsidiaries spun off after the sale, it’s possible for Apple to do this and keep a straight face. Yield chasers line up here. IBM may get the axe as well. This may be why Buffet is not buying stocks, he really prefers businesses. He may want to partner with a private equity firm to take some of these companies apart.

  38. Rcohn
    Jun 9, 2020 at 11:18 am

    Still can not borrow TSLA stock to short

  39. LouisDeLaSmart
    Jun 9, 2020 at 11:21 am

    \\\
    Three thoughts came to my mind after reading this article:
    \\\
    1 – Elon Musk figured out a way to go around the FED and print his own money. Creating value out of this air…?
    \\\
    2 – Tesla stocks are starting to resemble a cryptocurrency; a social contract without the (explicit and direct) backing of a government or other value, but is supported by a critical mass of money.
    \\\
    3 – This is nothing more then a statement of power. If this chart could talk it would say: “Look at me, I broke all the rules in front of everyone, nobody will investigate it and there is nothing you can do.”
    \\\

  40. aqualech
    Jun 9, 2020 at 11:36 am

    Thanks for the post – it makes me reflect on why I have feelings of resentment about TSLA as a company. I agree that the majors needed a shake-up. However, TSLA has always seemed like a cash-burn scam, and Elon something of a shyster. Sure, they have a cool product, but can they EVER repay the debt or have sales that support the valuation? I think not. A recent example of shysterism being the lie he told about funding being secured. So, he is fomenting this wild over-valuation of the company. On one hand that is arguably none of my business, but here is my problem with that: I would prefer to invest in companies with profits, stability and even dividends. Hopefully those things are all possible along with some potential for growth without excessive debt. But all of the market attention being placed on the likes of TSLA and NFLX seems to make any valuation approach to investing a losing game, at least in a relative sense, or at least that has been my experience. And now we see the Fed pumping money and devaluing the dollar every time this unicorn-driven market shows weakness. Will value investing ever be allowed again? Cultish attention being fawned on the likes of Elon, NFLX, SNAP, etc. certainly detracts and distracts from concerns for valuation and long-term viability in the investing universe.

    • Andy
      Jun 10, 2020 at 12:45 am

      aqualech,

      Are you worried about the US govt ability to repay debt? (it can print, but not the same thing in purchasing power).
      Or the Fed bail out of the 1% with $4.3tn, equal to $30k for every US family?
      Then why worry about Tesla? A tiny teensy problem by comparison.

  41. DawnsEarlyLight
    Jun 9, 2020 at 11:52 am

    “Look, I’m rooting for Tesla”…

    🤣 lol, good one! 🤡

  42. Don
    Jun 9, 2020 at 12:41 pm

    Well, the nice thing about the supernatural is that it’s not subject to falsification or verification by the empirical sciences, but entertaining illusions can have empirical consequences. I gather Tesla got a Care’s pandemic bailout to help out its supernatural WTF stock?

  43. timbers
    Jun 9, 2020 at 1:21 pm

    The Fed hasn’t caused any bubbles. And if it did, it’s by accident not on purpose. Just ask Bloomberg:

    “Federal Reserve officials don’t like to talk about asset inflation. This is hardly surprising. The levels of stocks and corporate bonds, after all, aren’t part of their stated dual mandate of maximum employment and stable prices.”

    And the Fed has an important way for us to tell it things that we want, it’s called “Fed Listens” forums, were they ask little people “to discuss the challenges faced by vulnerable communities” so they can “work together toward an equitable economic recovery.”

    Maybe some folks can to that forum and splain to the Fed that when the houses go up it makes it impossible for some folks to have homes, and when the stock go up the rich get so much money they control all the governments, too, and sometimes have too many policeman.

    • Jun 9, 2020 at 4:02 pm

      timbers,

      One of the interesting things about these the “Fed listens” meetings was the fact that these little people complained about price increases (consumer price inflation), and the Fed in its published comments about these meetings never mentioned it. This confirmed that this was just another Fed propaganda dog-and-pony show. The Fed doesn’t listen to the little people. If it did, it would try to do what it could to end price increases. But for the Fed, consumer price inflation hasn’t been big enough in many years.

  44. Jay Johnson
    Jun 9, 2020 at 2:42 pm

    They don’t call it Teslaron for nothing. And that ridiculous Starship monstrosity of TheranosX. I’m taking bets as to what country the rent-seeking conman flees to when the jig is up. Nigeria?!

  45. JRB
    Jun 9, 2020 at 3:12 pm

    I’m a member of a stock analysis group whose analysts are VERY good. They have called Tesla and many other stocks nearly perfectly for years, including the huge whipsaw in the market recently.

    They expect a pullback over the next few months to mid-500’s, then off to the races with a final target over 10,000 in about 5 years or so (there’d be some splits in there most likely).

    This is a purely technical analysis thing, so it’s not like they are saying this is going to happen – but from a TA standpoint, that’s where the charts are telling them it’s heading.

    • cb
      Jun 10, 2020 at 10:50 am

      Not meaning to split hairs, but if the preponderance of their forcast is through Technical Analysis, are they doing stock analysis ot chart analysis?
      Also, is anyone aware of any good stock analysis groups in the Long Beach, Ca vicinity?

  46. Ron
    Jun 9, 2020 at 4:55 pm

    We live near Chandler, AZ. I used to take my grad student to lunch in my drive by wire wheelchair van, he went on to teach at Westpoint, then head a division at DARPA. The self-driving grand challenges used the same drive by wire equipment first developed for disabled drivers. Sebastion Thrune recognized that driving is wasted time, and that aging population would result in hundreds of millions with driving impairments. We watch hundreds of Waymo’s designed from that core premise.

    Tesla started with the premise that we should be driving EV’s, but later felt that they could be self-driving. My brother and sister both have Teslas (i’m waiting for the Wheelchair van version). It is hard to describe the joy they derive from their Teslas.

    Knowing something about how the software behind Waymos and Teslas are developed suggests an important difference. Waymo has 600 test drivers in AZ and a few more in 3 or 4 other locations, geo-fenced, fair weather mostly. Tesla has a half-million, uncaged, simulating every driving situation they can. Sending data all back to developers. Did I mention that the Tesla testers are unpaid?

    I’m not sure how that reflects in P/E, but true AI for self-driving is well worth it, speaking from the perspective of someone who spent $140,000 in 1998 for crappy dodge caravan to get to work. I can’t help feel that Musk understands this is disruptive in ways others don’t see.

  47. Raymond Rogers
    Jun 9, 2020 at 5:18 pm

    Suppose we need a “Taxpayer Liquidity Mug 2020” with a tagline of “BYOL; Bring your own Liquidity”

  48. AndyK
    Jun 9, 2020 at 5:31 pm

    A hidden cost associated with expanded electric vehicle operation that is starting to emerge is the upgrading of electrical supply grids to cope with the charging loads. Is there a pricing mechanism to apply these costs to the vehicle users?

    • Max Power
      Jun 9, 2020 at 8:07 pm

      Sure, it can be done through smart power meters which can apply variable electricity costs throughout the day.

      In reality though, the whole “electrical grid can’t cope with the charging load” thing is mostly overblown nonsense. That’s because yeah, an EV might have a huge battery capable of delivering a 300 mile range but the reality is that vast, vast majority of folks only drive about 30 miles a day. That range can easily be slowly recharged overnight and you don’t even need a high power charger, you can do it on a plain 110v outlet and by the time you leave the house in the morning your car is topped off again. Now if we all needed to recharge our batteries the whole 300 miles each night it would be a completely different story but the reality is most folks will only need to charge about 10% of that on a daily basis, and that could be done at offpeak hours overnight without unduly taxing the grid.

      Heck, you don’t even need an EV. A PHEV with a 35+ mile range would probably mean that you will go to the gas station quite rarely since you can just top off those 30 miles you drive every day overnight and with a PHEV there is no fear of running out of juice. Examples of these types of vehicles are the new Toyota RAV4 Prime and the new Ford Escape PHEV. Both are due to be released this summer and are priced very reasonably (especially with the Federal tax rebate).

    • Jun 9, 2020 at 9:25 pm

      AndyK,

      ALL utilities love EVs. In the US, the problem that electric utilities have is the long-term stagnation (and now decline) of electricity sales, and the continued increase in capacity and capital expenditures:

      https://wolfstreet.com/2020/01/15/us-demand-for-electricity-declined-in-2019-stagnated-for-a-decade-but-2020-capacity-additions-are-wild/

      Utilities have been hoping for years that the mass-arrival of EVs would boost electricity sales in the residential segment, as EV owners would begin utilizing the enormous and costly “idle capacity” of the grid and power generation in the middle of the night to charge up their EVs in their garages.

      EVs are going to solve a huge problem for utilities: reducing this enormous and costly idle capacity at night. But this hoped-for growth in revenues from the arrival of EVs, and the increased capacity utilization at night they’d bring, has been, for utilities, frustratingly slow in coming.

  49. B Wilds
    Jun 10, 2020 at 7:25 am

    Today with over 250 million registered passenger vehicles in America if every Tesla ever made is on American roads, which they are not, only around one in three hundred cars would sport the Tesla name. Many market watchers see Tesla the “Poster Boy” of absurdity and proof of how liquidity has blown a massive bubble in equity prices.

    The fact is, you either love Tesla and Musk or you don’t. With Tesla stock soaring, it is again time to revisit the “Tesla – Musk” phenomenon.

  50. ewmayer
    Jun 10, 2020 at 2:49 pm

    LOL, The Musk share-pump-whisperer machine does it again. Per TechCrunch today:

    Tesla CEO Elon Musk said in a memo it’s time to “go all out” and start volume production of the Tesla Semi, the all-electric Class 8 truck revealed nearly three years ago.

    CNBC first reported on the memo that was sent to all employees. TechCrunch has also viewed the brief memo, which lacked details such as when this volume production might begin. Musk confirmed via Twitter that the memo was real.

    Yes

    — Elon Musk (@elonmusk) June 10, 2020

    https://platform.twitter.com/widgets.js

    The vague memo and one word “yes” confirmation was enough for Wall Street. Tesla shares rose more than 6% Wednesday morning to surpass $1,000. Shares were $1,009.84 at 10:50 a.m. ET. The company’s market capitalization has now surpassed $187 billion.

    The Tesla Semi has been in limited production, which Musk said in the memo has allowed the company to improve many aspects of the design. The battery and powertrain would be produced at Tesla’s gigafactory in Sparks, Nev. Musk didn’t mention where the actual truck would be produced, except to write that other work would probably occur in other states.

    And today’s TSLA pumpage caused its market cap to pass that of Toyota, and become the world’s largest automaker by market cap. All based on a small volume of boutique-priced “sexy” (Wolf’s words) EVs, a personality cult around its visionary leader, and a whole shit-ton of vaporware, which the Semi is at present. Ooh, they have a couple of prototypes whose actual performance is kept carefully under wraps but which serve as useful PR vehicles: “In August 2018, a Tesla Semi prototype traveled by itself—without escort or accompanying vehicles—for a week to arrive at the J. B. Hunt headquarters in Arkansas.” Yeah, great, show me fleets of ’em doing similar year-round in all kinds of nasty weather and the kind of real-world ‘suboptimalities’ that occur out there on the road, without an actual driver behind the wheel as the above prototype had, and doing it safer and cheaper than an old-style semi with human driver, then maybe you’ll have justified a small fraction of that patently ludicrous market cap.

    But a shout-out to Jerome Powell and his predecessors at the money-spewing Fed, which birthed all this “the only market risk remaining is that of missing out” insanity.

    • MCH
      Jun 10, 2020 at 7:11 pm

      There is this man, Elon, and he, he has a dream.

      A dream that all the world will revere his brand, just like they do with Apple. That no one will judge Tesla by the number of cars that it has built, the number of accidents these cars have endured, nor the number of cars it has operating at any one point, or the number of lots his cars are sitting in.

      The only judged by the continued elevation of Tesla share price.

      That is his dream.

  51. Portia
    Jun 10, 2020 at 5:57 pm

    I have always been rooting for the ideas of Tesla. Just the ideas that this poor dumb fuck brilliant genius guy fucked over by capitalist assholes kept putting forth. Every morning I put up a prayer that Earth will be miraculously rescued from the Great Parasite. Amen.

  52. Fred Flint
    Jun 12, 2020 at 10:42 am

    This article misses a fundamental fact. Software increases the value of hardware. Every time Tesla releases new software the cars are worth more. That’s just a fact.

    /s

    • ewmayer
      Jun 12, 2020 at 3:34 pm

      “Software increases the value of hardware.” — No. Software [b]which makes the hardware and user of same more productive (and/or safer, in the context of vehicles)[/b] increases the value of hardware. So please tell me how “self-driving” software which is even named “Autopilot” but which the company now says is neither because to use it so is grossly unsafe increases the value of the hardware. Same thing with the Tesla Semi – if the cars’ “Autopilot” cannot be used that way due to crashing-into-random-objects problems resulting from the inevitable “we can’t code for every possible road and condition”, the same thing will bedevil the Semi, meaning those fancy trucks *will* need a driver/attendant behind the wheel at all times, just as was the case during the “Semi prototype drove itself halfway across the country in a mere week” example I gave in my post above.

      It’s astonishing hubris for these Silicon Valley nerd-weenies to pretend that real-world complex mechanical systems which can and do actually kill people when things go wrong “just like software”, for which every problem has a software fix – and even in the world of software, “fixes and upgrades” which are in fact value-subtracting because they negatively impact user productivity are legion.

  53. Old-School
    Jun 12, 2020 at 1:17 pm

    Easy dishonest money and central planning has enabled a lot of things, but over time limited resources usually force society to make the tough choices about what it values.

    It’s a paradox that central bankers believe that recessions are bad, but keep creating phoney capital in the hopes of creating growth. You have got to eventually let the market determine what it values with real paychecks and real savings.

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