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Transportation Businesses The Almighty Buck

Musk Trolls Shorts as Tesla's Value Hits Record, Passes Ford (bloomberg.com) 251

Tesla's Elon Musk poked fun at short sellers as his electric-car maker's stock surged to a record, vaulting its market value past century-old rival Ford. From a report on Bloomberg: "Stormy weather in Shortville..." the chief executive officer tweeted Monday, as Tesla shares climbed as much as 5.8 percent. The maker of Model S sedans and Model X crossovers saw its capitalization surge to about $48.2 billion, $3.1 billion more than Ford, the No. 2 automaker in the U.S. after General Motors Co. Tesla has long been a popular target by short sellers such as Jim Chanos, who famously bet early on energy company Enron's failure -- and was proved right. Short interest in Tesla has risen to 29 percent of its free float from a 52-week low of 20 percent in mid-October, according to Markit data. Tesla's move past Ford came one day after Musk's company reported worldwide shipments of 25,000 cars and SUVs in the first quarter, exceeding analysts' estimates. While Ford delivered about nine times as many vehicles in just the U.S. last month, its sales missed projections and the shares fell.
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Musk Trolls Shorts as Tesla's Value Hits Record, Passes Ford

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  • Absurd (Score:5, Insightful)

    by sjbe ( 173966 ) on Monday April 03, 2017 @03:08PM (#54166405)

    The maker of Model S sedans and Model X crossovers saw its capitalization surge to about $48.2 billion, $3.1 billion more than Ford, the No. 2 automaker in the U.S. after General Motors Co.

    I'm sorry but as much as I respect Elon Musk and Tesla that is absolutely absurd. Tesla having a market cap bigger than Ford makes no rational sense even with the most optimistic possible growth expectations for Tesla. The company has never made a sustained profit, it's revenues are a fraction of Ford, and it has no reasonable prospect of the sort of exceptional margins or market control that could possibly justify such a valuation. Yes some of their products are awesome but that doesn't justify a dotcom era valuation. There might be a short squeeze but the shorts are right. Telsla is hugely over valued.

    The only upside to Telsa being over valued is that it gives them a lot of breathing room to build the company which is good for the future of EVs.

    • by XXongo ( 3986865 ) on Monday April 03, 2017 @03:19PM (#54166487) Homepage

      I'm sorry but as much as I respect Elon Musk and Tesla that is absolutely absurd. Tesla having a market cap bigger than Ford makes no rational sense even with the most optimistic possible growth expectations for Tesla. The company has never made a sustained profit, it's revenues are a fraction of Ford, and it has no reasonable prospect of the sort of exceptional margins or market control that could possibly justify such a valuation. Yes some of their products are awesome but that doesn't justify a dotcom era valuation. There might be a short squeeze but the shorts are right. Telsla is hugely over valued.

      Did you just take your old post about how Google was overvalued and strike out the word "Google" and "Brin & Page" to substitute "Tesla" and "Musk"??

      • by 93 Escort Wagon ( 326346 ) on Monday April 03, 2017 @03:42PM (#54166659)

        If you "remember" it, why not link to it?

        For every Google that came out of the first bubble, there were 1000 Kozmo.com's...

      • Did you just take your old post about how Google was overvalued and strike out the word "Google" and "Brin & Page" to substitute "Tesla" and "Musk"??

        Not sure who you are talking about but no I didn't. Google has been over valued at times but they largely justified their valuation before they even went public. Tesla is a very different sort of company with a very different cost structure and their current stock price is hugely over inflated compared to any objectively measurable near term prospects for the company. And even if they do eventually grow into their stock price it will take them a long time to get there which makes it a terrible investment

      • Another apt analogy, in my mind, is Amazon. Not much profit, massive valuation, but they are taking over retail (took might be better but Walmart is still in business).

        Tesla's ramp up is occurring, a bit behind Amazon's curve with regards to where we exist in time.

        Unfortunately, I have to park on the street where I live as the mini-van (a misnomer) takes up the garage...

    • by haruchai ( 17472 )

      The only upside to Telsa being over valued is that it gives them a lot of breathing room to build the company which is good for the future of EVs.

      Not sure how much breathing room they have if there's a misstep, e.g., a screwup with Model 3, poor performance by Solar City or a market slump.
      From the end of 2015 through mid-Feb 2016, the stock by NINETY DOLLARS. While it more than recovered by April, there was another more gradual slide of $50 that began almost immediately and didn't turn around until early Dec 2016.

    • Re:Absurd (Score:4, Insightful)

      by ChrisMaple ( 607946 ) on Monday April 03, 2017 @03:24PM (#54166549)
      Tesla is growing rapidly and has a price/sales of 6.98. That may be risky, but it's not out of line for a fast growing company.
      • Re:Absurd (Score:4, Interesting)

        by Luthair ( 847766 ) on Monday April 03, 2017 @04:04PM (#54166813)
        Tesla produced ~80,000 cars last year, Ford produced 6.7-million. From a purely numbers perspective its pretty much inconceivable that Tesla will approach Ford for decades, obviously Ford also has a correspondingly larger number of assets and there is considerably more risk in Tesla's future than Fords.
        • But can Ford grow any more? What potential does it really have? Speculation is a big part of what drives a stock price. A scenario where Tesla takes market share from Ford is plausible. But one where Ford grows 10x in size is not plausible.

          • How much can Tesla grow? I read a recent article in Forbes that Tesla is going to produce 2,000 Tesla 3's at $60K a piece the first year, not 20,000 at $30K as targeted by Musk
            • How much can Tesla grow? I read a recent article in Forbes that Tesla is going to produce 2,000 Tesla 3's at $60K a piece the first year, not 20,000 at $30K as targeted by Musk

              Keep reading. That same article was suggesting production runs of 40000 in the second year.

              So how much can Tesla grow? Well if they add the pessimistic Forbes figures to their current production they'll just keep going on the same trend they've been on the past 2 years.

        • Tesla produced ~80,000 cars last year, Ford produced 6.7-million. From a purely numbers perspective its pretty much inconceivable that Tesla will approach Ford for decades, obviously Ford also has a correspondingly larger number of assets and there is considerably more risk in Tesla's future than Fords.

          Um, like, you mean like the same Ford that took a cozy hayride to Washington a few years back, with Chrysler and GM, to, like, ask the government for taxpayer money to pay for their mistakes, because they all were "too big to fail" . . . ? You mean, like, that Ford?

          Tesla doesn't need to overtake Ford in sales . . . they just need to wait for Ford to bankrupt themselves again. And maybe . . . just maybe . . . the folks paying taxes won't be willing to pick up the tab this time around.

          • Re:Absurd (Score:5, Informative)

            by PCM2 ( 4486 ) on Monday April 03, 2017 @04:46PM (#54167109) Homepage

            Um, like, you mean like the same Ford that took a cozy hayride to Washington a few years back, with Chrysler and GM, to, like, ask the government for taxpayer money to pay for their mistakes, because they all were "too big to fail" . . . ? You mean, like, that Ford?

            Except of the three, Ford didn't really need to be bailed out. It only asked to be included in the bailout because if it wasn't, it would be the only automaker of the big three that wasn't getting massive government subsidies, thereby forcing it to compete in an unfair market.

          • Um, like, you mean like the same Ford that took a cozy hayride to Washington a few years back, with Chrysler and GM, to, like, ask the government for taxpayer money to pay for their mistakes, because they all were "too big to fail" . . . ? You mean, like, that Ford?

            Ford didn't take any bail out money. They had by chance taken out some very substantial loans shortly before the crash. They literally used the Ford Oval as collateral [cnn.com] but as a result they didn't need to take a penny of tax payer money.

            Tesla doesn't need to overtake Ford in sales . . . they just need to wait for Ford to bankrupt themselves again.

            Since Ford has never been bankrupt you could be waiting a very long time for that.

            And maybe . . . just maybe . . . the folks paying taxes won't be willing to pick up the tab this time around.

            Maybe but the tax payers would be stupid not to. If GM failed the effects wouldn't be limited to just GM. The supply chain for all the car companies is interconnected and the supply base is

        • That's kind of similar to the argument that Dell should be worth more than Apple, because they ship more PCs. If you're going to look at a 'purely numbers perspective' you need to take into consideration the profit margin, which you didn't.
        • Tesla produced ~80,000 cars last year, Ford produced 6.7-million.

          One way to look at it would be that Tesla's rise has been far greater than Fords at a time when the market was already saturated. Downplaying Tesla because of Ford is ridiculous when you consider how long Ford pottered around with sub par sales offering something with which no one was competing.

          But you're right, it's not all about numbers. Who would you gun for in an economy where carbon is a toxic word? Ford who took government handouts in parts of the world only to completely shutdown and abandon car manu

        • What is all of Ford's asembly lines? They are a mixture of humans and robots that build expensive heavey steel ICE vehicles. These lines are going to drop by more than 50% within 2 years. And the equiqpment, which most is dedicated to ICE production, will become WORTHLESS.
          OTOH, Tesla should be over .5M cars by end of 2018. In addition, they will be growing quite fast. And all of their equipment is geared for making EVs.
          • Your logic and rational thought won't penetrate through the sand in the ground to their heads. For so-called nerds, the people here are so afraid of anything new or different it's kinda mind boggling. EVs are the future. Anyone with half a brain should recognize that.
        • by msevior ( 145103 )

          Tesla produced ~80,000 cars last year, Ford produced 6.7-million. From a purely numbers perspective its pretty much inconceivable that Tesla will approach Ford for decades, obviously Ford also has a correspondingly larger number of assets and there is considerably more risk in Tesla's future than Fords.

          Actually it's is quite conceivable they will overtake Ford on *just* volume of cars by the mid-2020's. If all goes according to plan, Tesla will produce 1 million cars per year by 2020. Note that they have over 400,000 reservations for the model 3. That is unprecedented in modern automotive history so it is likely that the demand for the Model 3 is present in the market. After reaching the million per year rate, Tesla will have to start replicating it's production plants and gigafactories around the world a

          • Actually it's is quite conceivable they will overtake Ford on *just* volume of cars by the mid-2020's.

            Hah! That's a good one, tell me another. You are forgetting about the law of large numbers as well as a bunch of other constraints. Going from 0 to 100K vehicles is WAY easier than going from 100K to 6 million vehicles. And right now Tesla can cherry pick vehicle categories to go after. It gets harder the broader your product portfolio gets. The capital investments get larger too so if Tesla isn't making a profit it's going to get harder and harder to get financing as they grow. There also are infras

      • Re:Absurd (Score:5, Interesting)

        by OverlordQ ( 264228 ) on Monday April 03, 2017 @04:25PM (#54166977) Journal

        What? Their P/E ratio was -53 for 2016. And it's -103 so far this year. They DEEEEEEEEEEP, in the fucking hole.

      • Tesla is growing rapidly and has a price/sales of 6.98. That may be risky, but it's not out of line for a fast growing company.

        Price to sales of 7 is out of line for almost any company. Tesla is a very interesting company with reasonable prospects of success but that doesn't make it a good investment at the current price. Especially given that Tesla is in a relatively low margin business with high capital costs. The most profitable car companies have net margins of around 8-10%, and most are less than that. There is no objective reason to believe Tesla is going to be able to command meaningfully higher margins than any existing

    • 2016 sales numbers:
      • Ford Motor Company Total Sales 2016: 2,614,697 units sold
      • Ford Lincoln line: 111,724 units sold.
      • Ford F150: 382,561 units sold.
      • All Ford F Series: 820,799 units sold.
      • Ford Mustang: 105,932 units sold.
      • Tesla, all models: 76,230 units sold.

      So there's something definitely wrong with Tesla's valuation.

      • Re:Absurd (Score:4, Funny)

        by blackomegax ( 807080 ) on Monday April 03, 2017 @03:34PM (#54166621) Journal
        Tesla sells supercars and luxury SUVs that are futuristic EV's that *work* and look good. Tesla IS the future of cars. Ford sells shitboxes that break down all the time and still burn gas. I know which i'd buy.
        • Tesla sells supercars and luxury SUVs that are futuristic EV's that *work* and look good. Tesla IS the future of cars.

          Ford sells shitboxes that break down all the time and still burn gas.

          I know which i'd buy.

          Looks are subjective and while I'm not a fan of Ford, I think Teslas look like they have extra chromosomes and their interiors are drab at best.

      • How did Tesla sales figures compare to Ford's all-electric models?

        (note: Ford is planning an all-electric vehicle in...2020)

      • There is a big difference.

        Ford sells all of those cars for a profit.

        Tesla sells all their cars for a loss.

    • by seoras ( 147590 )

      No, it's pretty standard for a tech company. Car companies aren't just automobile makers anymore.
      Software/hardware is becoming the key differentiator in that market place as there's nothing else remaining to differentiate product on.
      Stock market valuations of 40x or 50x revenue are based on future value not present value.
      We've been seeing this for decades on the NASDAQ.
      Also just because you sell 10x more product it doesn't necessarily mean your profit, and bottom line, is going to be better either.
      The smart

    • Re:Absurd (Score:5, Insightful)

      by TWX ( 665546 ) on Monday April 03, 2017 @03:43PM (#54166669)

      The value of a company is often based on perceived potential. Right now, Tesla has demonstrated viable products in an up and coming market that's perceived as being on the cusp of exploding in growth. Also, Tesla is more than just cars, the formal merger with SolarCity solidifies their presence in the market for home solar, home battery storage, and commercial power storage, and their existing plans for battery production might also benefit them well as a wholesaler of batteries to their competitors or to others with electric power ideas.

      I wouldn't be surprised if Tesla also benefits from bleed-over from Musk's other headline-grabbing company, SpaceX. Successes with his companies, especially on viably bringing engineering projects to market as functional products probably bolsters all of them. Right now both companies appear to be making good engineering decisions, and if they continue to do so then they could end up being major disruptions to both markets.

      Ideally all of the automakers would bring electrics to market with conventional styling; I really don't care for how most special-just-to-be-special bodywork is styled for electrics. To my eye, Tesla's cars look less like they're trying to be different as electrics than Toyota's or GM's, and this works a lot better than weird body shapes and bolt-on different color panels around the windows and beltline.

      • by shilly ( 142940 )

        Agree with your point about styling. It's one of the things I like about my Renault Zoe. Electric, yes, fairly distinctive, yes, but not ... weird.

        • by TWX ( 665546 )

          I wish Nissan would look at this and realize that the Leaf doesn't need those awful kermit-the-frog headlight assemblies that stick up out of the hood.

          • I wish Nissan would look at this and realize that the Leaf doesn't need those awful kermit-the-frog headlight assemblies that stick up out of the hood.

            But someone must continue the legacy of the Citroen Deus Chevaux! :-)

          • I wish Nissan would look at this and realize that the Leaf doesn't need those awful kermit-the-frog headlight assemblies that stick up out of the hood.

            Those headlights are vortex generators that create a layer of turbulent air which flows up over the bodywork and then over the side mirrors, reducing drag. So yes, yes it does need those awful headlight assembles. Get used to that look, too. Being molded out of plastic, the headlights can be used to create shapes which are infeasible or even impossible to produce by stamping the bodywork.

      • by JustNiz ( 692889 )

        >> To my eye, Tesla's cars look less like they're trying to be different as electrics than Toyota's or GM's,

        Maybe, but to my eye Tesla's styling is unattractive, especially the front grill. Its somewhere between bland and downright ugly. Kinda like nearly all German cars.

        • by TWX ( 665546 )

          I don't see anything especially wrong with the front facia of the Tesla. I see some design cues that were commonplace on the last of the MN-12 Ford Thunderbirds, as well as a grille style that's common on the Renault and Citroen makes.

          I actually prefer the look of the protoype Model 3, which essentially has no grille, but nothing about the Model S or X basic styling offends me. I don't care for the Model X's rear doors though, that seems like it's more trouble than it's worth and requires overhead clearan

          • Re:Absurd (Score:4, Interesting)

            by JustNiz ( 692889 ) on Monday April 03, 2017 @07:08PM (#54167749)

            I saw a model X at my local coffee shop the other day, The owner had parked with both rear doors open, obviously attention whoring.
            Before I cast final judgement on the practicality of the wing doors I think I would have to live with them to experience the plusses and minusses. I could certainly see how a low garage like mine could block them, for example. I couldn;t see much advantage, especially as its the rear doors not front ones, so unless you have kids they won;t really get used much,

            To me, the styling of the car itself looked disjointed and awkward, especially as the front doors open conventionally. I think it clearly falls somewhere between ugly and bland, but lots of people were looking at it, so I'm almost certainly in the minority. In person its very reminiscent of an enlarged Nissan Leaf, or maybe one of those cars for disabled people in wheelchairs. It definately didn't look like it should cost anything like the $85k+ base price. The interior was also very soulless and surprisingly cheap-looking. Looking at the shut lines and other details, it was clear that the build quality was no better than the average 30k Hyundai or whatever. I think most people looking at it who didn't already know what it was, would almost cetainly guess it was a $30-35k car.

      • I can't believe so few people (anyone else??) are bringing up just all of the other business Tesla can grow into even solely based on battery experience! Not to mention practical autonomous driving software that is actually deployed in the field in large numbers, and like you said simply good engineering.

        To me the Tesla Model 3 is the best looking sedan I have seen in a long time, never mind being electric (to be fair I didn't really like how the other Tesla's looked nearly so much).

      • Ford [yahoo.com]. Price to Earnings ratio of 9.95, Earnings per share of 1.15. Revenue of $151.8 billion in 2016.

        Tesla [yahoo.com]. Price to Earnings ratio of -63.79 (they lost money). Earnings per share of -4.68 (Tesla lost 4x more per share than Ford made). Revenue of $7 billion in 2016.

        Basically, for Tesla to be priced where it is (assuming a "reasonable" P/E ratio of 10), you're betting that its earnings are going to reach $16 billion/yr. If you go by the average 5% profit margin for major automakers [yahoo.com], this means you
    • Re:Absurd (Score:5, Informative)

      by Anonymous Coward on Monday April 03, 2017 @03:48PM (#54166707)

      Minor accounting error there. You're comparing market valuation and company assets. That ignores company debts. Ford has a whopping $150 billion debt. (Rough numbers; about $100 billion long-term and $50B short-term. Latter obviously varies). No wonder its market cap is "only" $45 billion. The total Ford company is worth about 200 billion. Tesla is valued at about a quarter of that, but since they're almost free of debt (~$7B) that translates almost entirely into market cap.

    • by GuB-42 ( 2483988 )

      So why don't you just short sell Tesla and get rich?

      • So why don't you just short sell Tesla and get rich?

        Because that would require two nickels to rub together.

    • Re:Absurd (Score:5, Insightful)

      by gman003 ( 1693318 ) on Monday April 03, 2017 @03:51PM (#54166727)

      Tesla might not be able to reach Ford's current sales volume in the foreseeable future, but perhaps Ford's stock is sliding because investors expect its sales volume to shrink considerably? Ford doesn't have a BEV program, doesn't have a good AI program, and isn't even making cars that sell well internationally. They've bet fairly big on SUVs, crossovers and pickups, which are currently selling like hotcakes in the US, but not hugely well anywhere else. If the rest of the world passes heavy fuel-efficiency regulations, that would basically limit Ford to just domestic sales - and while it's unlikely Trump is going to tax CO2, the next administration certainly could, and California is trying to even now.

      Tesla is also in position to win even if they lose. BEVs are looking like they'll be a pretty big market, and Tesla built a big-ass battery factory. Even if nobody buys a Model 3, whatever car they buy instead will probably have Tesla batteries inside it. Their ramp-up on batteries seems to be going smoother than their ramp-up of full cars.

    • I'm sorry but as much as I respect Elon Musk and Tesla that is absolutely absurd. Tesla having a market cap bigger than Ford makes no rational sense even with the most optimistic possible growth expectations for Tesla.

      I've been following Tesla in the news and here on Slashdot for a couple of years now, and I've seen one common thread:

      Every time someone says Tesla is a bad investment(*), the stock jumps up almost immediately. It's almost as if the news media wants to periodically manipulate the stock for some benefit or another.

      (*) By derating from "hold" to "sell", setting a lower price point, writing a "doom and gloom" article ("just look at this chart!!!"), and by telling everyone how Elon Musk isn't all that great.

      • by shilly ( 142940 )

        You're spotting patterns that aren't there. You'd need to do some quant analysis to demonstrate this is real, but the likelihood is it's an artefact of human cognition.

    • Tesla having a market cap bigger than Ford makes no rational sense even with the most optimistic possible growth expectations for Tesla.

      It doesn't make sense until you recognize they have a good chance of becoming the dominant car and battery manufacturer on a global scale, though it may take a decade.

    • The fact that Musk did this tells you how important the share price is to Tesla.
    • I came here to say the exact same thing. He may be riding high right now, but at some point, investors do expect consistent profits. The market for electric cars is not that broad unless they can get withing 15% or so of ICE powered cars price wise and cost of ownership. The other big utility hit is the ability of ICE gasoline cars to refuel in under 5 minutes.

    • You are right in everything you say, however, you are not calculating lifetime value. Once everything is in place, Superchargers = profit for tesla, they will be selling cars with a ton of tech you have to pay to unlock, so autopilot = profit (assuming you didn't unlock all when buying the car). For the foreseeable future, service must be done by tesla, so more profit. How much does Ford make after selling the car? In 10 years, tesla will be making bigger profits than Ford.
    • Couldn't agree more that they're massively overvalued. Ford sold 2.6M cars/trucks in the US alone, took in $151B overall, and made profits of $10.4B in FY 2016.

      Tesla? $7B in total revenue with a loss of $746M for the FY, and only sold 76k vehicles total. Yeah, I see why they're worth more.

      I love their technology and really hope that their cars are a big part of the future, but their market cap is driven by nothing but hype and hope.

  • by __aaclcg7560 ( 824291 ) on Monday April 03, 2017 @03:21PM (#54166523)
    I doubt "troll shorts" will ever become a popular fashion item.
  • Tesla stock is WAAAY over-valued.
    There's no way Tesla are selling as much as Ford. Tesla's entire sales history doesn't come even close to only one year of just F150 sales.

    • by Dunbal ( 464142 ) *
      Here's another one who thinks the stock market responds to logic. Go ahead and short it if you think it's over valued. You're probably right, and eventually it will come tumbling down. You probably won't be feeling too good when it passes through $500 first though...
      • by JustNiz ( 692889 )

        Nah the stock market looks like a mug's game to me.

    • Tesla is WAAAY over-valued.

      FTFY

  • High valuation aside, it's important to remember that Tesla isn't just trying to displace GM. They're trying to displace GE.
    • This is the key. Remember when Amazon stock was so overpriced they would have to sell every book ever printed twice to justify their stock valuation? They grew into that price when they started selling everything else under the sun. Their price went to new heights that also could not be justified based on that, and then they became the defacto cloud host. The current Tesla value has very little to do with its ability to sell a lot of cars. (I am not implying Tesla stock is a good buy or not, just that its
  • by account_deleted ( 4530225 ) on Monday April 03, 2017 @04:23PM (#54166957)
    Comment removed based on user account deletion

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