Tesla shares surpass $1T in value

Expected future value. Most rental companies haven't committed to large EV fleets. This changes things.

That said I think the current valuation is a joke.

That's correct, the stock market uses information from the present to make a determination about the future. Hertz isn't buying Teslas because they are engaged in charity, they are doing it because they likely came to the conclusion that it's cheaper, or more optimal in some sense, to have a fleet of electric vehicles over ICE vehicles. Unless Hertz made a grave miscalculation, one can expect other vehicle rental companies to come to the same conclusion, along with other companies/industries that maintain large fleets of vehicles.

This move further entrenches Tesla in the electric vehicle space, along with all other related technologies (electric charging, insurance, battery technology, etc etc...). The truth is that most other car companies are just not well positioned to transition to electric vehicles.

Haha. Having Hertz as a customer is a huge validation for Tesla. It means other rental fleets will be asked questions about electrification. It also means a bunch of people will test drive Teslas - people who wouldn't otherwise look at it. The car sells itself, because it is great.

I think it's more that the $4B Hertz order is a big vote of confidence from a big rental car player that signals a higher likelihood of all the other big rental car companies (since this made the news, I'm assuming other big rental car companies haven't done so, or at least on that scale, at least for an "ordinary" vehicle, since a quick search shows you can rent a Model S from Enterprise, but only from their Exotic's section) to follow suite, and a potential ensuing continuous revenue flow for Tesla as these rental cars end their life-cycles and need to be replaced. Of course these are all just possibilities, essentially bets.

What is logical is massive amounts of leverage in the form of call options results in a gamma ramp. Option dealers bought anywhere from $50B to $100B of Tesla today. Such a tremendous injection of capital must affect the price.

Gamma ramp down will be equally massive.

If you think that is wild, did you know Tesla is worth almost 1,000 Palms!

The iPhone launched in '07 & AAPL saw its cap go from $100b → $2,400b in 14 yrs

In the same 14 yrs

Nokia: $110b → $32b

RIM: $72b → $6b

Palm: $54b→ $1.2b

FYI, the global auto industry is not Apple in this example

Financial engineering with debt and leverage; central bank policy breaks markets. It ends with megacorporations, oligarchs, inequality and tears.

The real question is. Have you ever driven a Tesla?

It is, but TSLA has been like this since 2014-ish? They do well on one product and the market automatically thinks they'll make the next one even better.

Also, because it's sentiment-driven, it's very volatile. Nothing wrong with trading on sentiment, as long as you know that's what you're doing.

It depends on how you measure the value of these companies. If you go by market cap then yes Tesla is worth more than all of them combined.

The reason for this is that all those other companies you mention have enormous debt, whereas Tesla's debt is fairly negligible.

Tesla has 10 billion dollars in debt compared to GM which has over 100 billion dollars in debt or Ford which has over 150 billion dollars in debt.

It's precisely what makes it so volatile. People are pricing in things that have not happened because they think they're very likely to happen. Then their opinion changes and the stock tanks. Trading on sentiment is not my cup of tea, btw.

If you wanna buy and hold TSLA today, you pretty much have to be convinced that their FSD and TeslaBot plans will become reality.

Most equity investments are gambles on stock value, especially early-stage private tech startups like the ones many of us here work at.

We look at the product, exec team, and the marketplace -- and we make an educated gamble.

On the very contrary, the more forward-looking something is, the more volatile it is likely to be.

Nothing is more difficult to predict than the future after all.

The fact that not everyone is going to sell at once is built into the price.

Share capital value is used in more than a few places. Like taking out a loan on your TSLA shares

I didn't really understand your point insofar as it sounds like a truism you could plug in any company name for: "If everyone holding TSLA tried selling at this price, a small fraction would manage to execute orders at that price before it plummetted." ??

Of course market cap is not the same as the equity value of a company. However market cap numbers are useful in comparing public companies to one another, and for broad categorizations of the scale of a business.

Ref: https://www.investopedia.com/terms/m/marketcapitalization.as...

The market for retail as a category is way larger than the market for personal vehicles. Tesla is valued at a price that implies that the majority of cars being produced will be from Tesla.

It's a dumb tech stock multiple except the marginal cost of another car isn't zero like it is for a salesforce instance.

I started investing in AAPL around 2005. I remember prevailing repeated opinion back then was that the stock price would soon tank to oblivion because of some kind of Traditional Accounting Principles technobabble. Nowadays everyone is singing praises about how AAPL is one of the best stocks to own ever.

I see the same thing happening with TSLA nowadays. Not saying AAPL back then and TSLA today are directly comparable, but a lot of the naysaying about TSLA today is again, often about some kind of Traditional Accounting Principles thingamajig.

AAPL's P/E ratio is like 30 at the moment. The average for the S&P 500 is 20 and AAPL's isn't much higher than the rest of the industry.

TSLA's P/E ratio is 533. It's far beyond its segment and the irrational exuberance of the tech industry.

apple has a 25% profit margin and did 275 billion in gross revenue last year, will likely be >300 billion this year. It's the most profitable company in the world and top 5 in overall revenue. Tesla isn't even in the top 50.

Yeah, if the future is for Tesla to integrate more storage solutions for the grid with renewables... There is logic in being bullish. Large-scale energy storage is probably one of the most critical sectors not solved of the green energy effort.

The solar business is basically dead. Tesla is a car company that builds electric cars until it shows otherwise.

Isn't Solar City just a trainwreck? From the acquisition which looked almost entirely like Elon bailing out his brother's business, to all manner of customer complaints now about fragile installations that are having maintenance and reliability issues and people being unable to get that dealt with because everyone involved keeps passing the buck...

Tesla isn't completely vertically integrated. They've been buying batteries from CATL and that is core EV tech.

While I understand the F-150 is the best selling vehicle in the US, it occupies a distinctly different market than Tesla's current vehicles. The Mustang Mach-E is the better comparison.

Then there's the Cybertruck. Despite being a big Tesla fan, my opinion is that it's not going to appeal to the majority of traditional truck buyers. I'd be happy to be proven wrong.

Many Tesla investor-fans (including some big names) are FSD and/or Robotaxi evangelists. They believe Tesla will continue to be incredibly successful but not because of sales to the public.

Rather, the key to Tesla's success will be mass rollout of FSD leading to the Robotaxi fleet.

Which in turn will lead to the banning of personal car ownership (save for a few exceptions). Everyone will be using Robotaxis instead. And Tesla, being in a first mover position to take advantage of such a paradigm shift, will continue to skyrocket to success.

Some of the extremists want Tesla to stop selling cars to the public ASAP so that they can stock them up for the Robotaxi fleet, which they confidently believe will be here much sooner rather than later.

Disclaimer: These aren't my personal views (although I am an investor). Personally I'd rather Tesla downplay the emphasis on FSD/RT, at least until the tech is far more mature than it is now. But I hang out in a few TSLA investor communities where these views are quite popular.