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

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.

Comments

Absurd

[sjbe]

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.

Re:Absurd

[ChrisMaple]

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

[blackomegax]

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.

Re:Absurd

[TWX]

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.

Re:Absurd

[Anonymous Coward]

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.

Re:Absurd

[gman003]

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.

Re:Absurd

[Luthair]

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.

Re:Absurd

[OverlordQ]

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

Re:Absurd

[PCM2]

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.

Re:Absurd

[ShanghaiBill]

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.

Re:Absurd

[JustNiz]

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 remember when you posted that about Google

[XXongo]

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"??

Re:I remember when you posted that about Google

[93 Escort Wagon]

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...

Re:I remember when you posted that about Google

[XXongo]

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

http://www.lightreading.com/ethernet-ip/google-is-overvalued/a/d-id/622304
http://captaincapitalism.blogspot.com/2005/12/google-is-overvalued-period.html
http://forums.seochat.com/search-engine-optimization-28/google-stock-overvalued-14884.html
https://www.fool.com/investing/general/2005/11/23/buy-google-no-thanks.aspx
https://www.fool.com/investing/value/2005/12/06/much-ado-about-google.aspx

No, no, no...

[__aaclcg7560]

I doubt "troll shorts" will ever become a popular fashion item.

Taunt

[XXongo]

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.