Tesla’s stock is shorted FAR more than any other company with comparable market cap. 30% of outstanding shares are shorted. It’s bonkers.
This would be true even if things were going well and Musk were going from strength to strength. But Tesla has had a whole raft of problems, many of them self-inflicted. This is catnip to shorts.
Further, part of Musk's strategy has been to bank on the genius-founder stereotype. It has clearly paid off as well; I'd bet that that there's an order-of-magnitude difference between the percentage of people who can name Tesla's CEO and that of any other car company. But again, it's risky; if Musk quit or were forced out, confidence in the company would collapse. And he has made a number of unforced errors; no other car company CEO is in dutch with the SEC. This kind of risk is also hugely appealing to shorts.
It's also worth noting that the shorts were right. Tesla's managed to lose half its value from the peak, and it's still down something like 30%. Some of them have surely made a ton of money.
Given they have a higher market cap than either Ford or Honda, I'd be betting on the latter....
Shorting a stock is not just a statement that you think the stock is overvalued. It’s a statement you think the stock will soon drop, because each short costs money and expires.
Eventually being correct is useless. If for example it performs poorly over the next 20 years and never actually drops you will lose everything.
There is no way you can get a rebate just by shorting the name.
You're probably thinking of the rebate rate, which is the money received by people long Tesla who are lending it out.
Can I prove that’s what’s going on? No, I’m just some dude on the internet. But it really is not implausible at all.
At a stretch, it might make it more difficulmore expensive for Tesla to refinance/raise capital via issuing stock, but that sounds like really bad ROI for billions of dollars.
I think someone would have noticed if Exxon’s balance sheet said something like “Derivative securities - $2.8B”.
Big money has a lot of legal levers to keep their investments in dirty economy profitable that also make sense for them financially.
The 80s was rife with things like this, to the point many became famous for it.
Ford's EV is 145B (42B market cap + 103B debt).
Tesla's EV is 56B (44.5B market cap + 11.5B debt).
Ford and Honda are still valued considerably higher than Tesla.
Ford's debt and assets are largely from its financing arm. It doesn't make the car making part of Ford worth more.
It's a piece of evidence that investors might be wrong.
It's an easy double. Buy Ford, sell of the assets, pay off the debt and pocket $110B for a cost of $42B. Since that's not happening, nor anything like it, investors don't think Ford assets are worth $250B.
An apples to apples comparison between Ford and Tesla to compare valuation means teasing out the part of Ford that actually makes cars. Lumping in the financial services arm makes no sense if intellectual honesty is the goal.
And in any case, EV isn't at all the final word you're making it out to be. If Ford takes on $100bn of debt to finance $100bn of cars with zero margin in order to move metal, now Ford has a $241bn EV. Is Tesla now suddenly even-more-undervalued compared to Ford? Nope.
You're right that Ford probably can't be broken up and liquidated at book value, but my argument doesn't hinge on that.
Who said Tesla was undervalued?
I take it you're not interested in addressing my actual argument given you've deflected twice.
So saying that Tesla is overvalued compared to Ford is like saying "water is wet". By that measure all 499 of the other companies on the S&P 500 are also overvalued.
I haven't addressed most of your arguments because they're both not wrong and irrelevant.
The original point I was refuting was the belief that the stock market values Ford less than it values Tesla. I'm saying that the stock market values Ford at about 3X what it values Tesla. If you disagree with that statement you need to give an actual number, and why.
But the EV of Ford including FFS also offers no insight in to whether Tesla is overvalued. Not even a tiny bit.
If we can agree on that, then we're arguing here for no reason.