Not only is the stock not going down, it's doing well, up almost 5% year-over-year.
“Markets can remain irrational longer than you can remain solvent.”
TSLA's value has never been correlated to the fundamentals of the business. So it continuing to do so isn't super surprising.
As long as there's a steady supply of unsavvy investors/future bag-holders willing to buy, it'll keep climbing.
That ended when Musk went on one of his earlier whimsical firing sprees and destroyed the charging team. Had he instead beefed it up, charging could become a money printing machine. Even with his sabotage of the charging teams, Tesla charging is better than other but it could have been so much more
Why would you want to be that, though? The only way to maintain that would be to run it at very low margins; it's hard to imagine a more commodity product and if you have high margins and significant revenue, people will just set up competitors with slightly lower margins.
It’s annoying because I have a more optimistic view than most on the long term prospects of the company, but this stock behavior makes it hard to place such bets.
Which is really pretty standard for any tech company whose valuation doesn’t make sense. People are betting the future will be brighter and have more revenue from new products.
Toyota = safe, predictable, steady ship
Tesla = wildly profitable for many for years, but incredible unpredictable.
It seems many are still guessing it’s going to go up in the future.
* some coefficient of meme-stockery (trading in expectation of other people's memetic interest in the stock, like GME) and
* some other coefficient of Tesla's long term vision (gigafactories, their distribution system, their place in the market for power delivery, &c).
Neither of these would be especially sensitive to Tesla's recent performance; Tesla only has to stay viable for both those payoffs to remain plausible.
Also note that the CEO has close ties with government, so some people might be betting on Federal contracts or some kind of bailout.
I have a hypothesis that the reason Musk went all-in on Trump was because Trump would keep BYD out of the North American market. There's been whispering for years about BYD building plants in NAFTA nations or perhaps even in the USA (like Toyota and Nissan did), and even with significantly higher costs BYD would probably annihilate Tesla. A higher-end US-market mid-priced BYD EV with 300+ miles of range that undercut the model S would be deadly.
If we had global free trade with no tariffs China would absolutely dominate this sector as well, at least for mainstream vehicles.
Great question. Tesla's latest quartely report was very negative across the board. Normally stocks tank after a report even half as bad. But Tesla has been on a wild rally since the report came out. No, I can't explain it.
Toyota is second with $244B and shipped 11M vehicles.
Ford shipped 4.4M vehicles and has a market cap of $41B.
If I look at [1] then Tesla is worth more than the next 12 or so combined.
Nothing about this makes any sense. Maybe ten or fifteen years ago you could have made the argument based on future prospects, but that case is exceedingly hard to make today when there's tons more competition on the EV market.
[1]: https://companiesmarketcap.com/automakers/largest-automakers...
(Interestingly, people _do_ do this to _some_ extent, though. Notably, Trump's joke of a social media company took a significant temporary hit on releasing bad financials, even though of course the financials are completely irrelevant to the valuation; it has revenue of less than a million per quarter and a market cap of over five billion.)
It has met all the criteria for removal (there are 20-30 changes every year, even profitable companies get removed) but obviously won’t be until Musk angers Trump enough for them to have the political cover to do it. When that happens, look out below.
But I think hedge funds are the real players here. Tesla is one of their successful investments. So placing even more bets there to keep numbers looking good is one possible play...
No. The big index funds fully replicate the index.
They will drop Tesla only if Tesla is dropped from the index.
Tesla is currently up by 1150% since 2019.