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

Posted by msmash on from the stormy-weather dept.

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.

7 of 251 comments (clear)

  1. Absurd by sjbe · · Score: 4, Insightful

    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.

    1. Re:Absurd by ChrisMaple · · Score: 3, Insightful

      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.

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    2. Re:Absurd by TWX · · Score: 5, Insightful

      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.

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    3. Re:Absurd by gman003 · · Score: 5, Insightful

      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.

    4. Re:Absurd by ShanghaiBill · · Score: 3, Insightful

      The same can be said for any automotive manufacturer.

      Ford has patents, but not many that matter. Tesla has crucial patents in self-driving tech, navigation, electric engines, and battery tech. Those are the future of cars. Anyone who wants to play will have to knock on Elon's door.

  2. Taunt by XXongo · · Score: 5, Insightful
    When did the word "taunt" mutate to the word "troll"?

    They're not the same.

    Musk taunted the short-sellers. He didn't "troll" them.

    1. Re: Taunt by Anonymous Coward · · Score: 2, Insightful

      No, you don't gotta. If you are trying to look cool, fine. But using proper language in an article is still acceptable. As a non millennial, you just sound uneducated. Cool, but uneducated.