Tesla! Wait, let me rephrase: TESLA!!
People are gullible, and I’m thankful for that every, single day. If they aren’t good for much else (and they really aren’t), people are reliably credulous. And where there’s credulity, there’s opportunity.
On April 23, I wrote that Elon Musk would “figure it out.” I didn’t even know what I meant by that, but I knew that one way or another, Musk would find a way to get Tesla’s shares back up, even if he had to resort to gimmicks, pie-in-the-sky promises or, failing that, outright bullsh-t.
At the time, Tesla was trading around $143, down more than 40% for the still-young year. “And when he does [figure it out], the usual army of credulous loyalists and acolytes will be right there shouting, ‘Shut up and take my money!'” I went on, in the same linked article.
Within a week, Musk managed to cajole the shares around 30% higher by, among other things, making an impromptu trip to China. That quick surge added ~$150 billion to the company’s market cap. Fast forward six months (nearly to the day) and Tesla added that much again in just a single session.
For Nvidia, that’d just be another day at the office. For Tesla, it counted as a barnburner.
To what do Tesla shareholders like myself owe their good fortune? Some of the rally — half, maybe — was predicated on the company’s Q3 results, which were “good.” But it was Musk’s nebulous promise to deliver “something like 20% to 30% growth next year” which really charged things up.
He called that projection “my best guess,” and hilariously, that was good enough. Good enough for the above-mentioned credulous loyalists and acolytes, anyway. In a name like Tesla, that’s all you need.
I assume there were at least a few nominally rational investors buying on Thursday too. There’s a fundamental case for the stock, although probably not at these levels, and it’s possible to convince yourself of the merits if you try.
Let’s be honest, though: There wasn’t anything in Tesla’s results, nor in Musk’s remarks, nor in any of the incremental information made available Thursday, to justify a 22% rally in a $700 billion company.
Silly? Sure. But as a shareholder who bought at $148.63 on April 19, I’ll take it. And so will Elon. He made $34 billion on paper Thursday, according to Bloomberg’s “best guess,” and “something like” $27 billion according to Forbes.
With money like that, you could plan a trip to Mars. Or buy the US presidency.
We should refer to changes in his paper wealth in terms of Twitter purchases (one twitter = $44B), so he made 0.77 Twitters today. As much as brings me joy to watch Twitter flounder, it’s days like these that show Twitter is just a play thing for someone of his wealth and even losing billions on it doesn’t mean any more to him than me having to replace the HVAC system in my house. I am surprised Tesla hasn’t been impacted more by his politics, but even if it did, he’d probably be just as happy to play the “canceled” card.
Sales of cars were up 1%. Sales of regulatory credits were up 33%.
Stop the madness.
If Trump wins Musk becomes the God King he sees himself as. If Trump loses Musk becomes the poster boy for the fight against Democratic persecution, real or imagined (and we all know it will be imagined, because the democrats are a bunch of wimps.) Checkmate Libs!
“…and we all know it will be imagined, because the democrats are a bunch of wimps.”
This is an under-appreciated point. Every time I read about vast Democratic conspiracies and nefarious “libs” angling to oppress the populace and persecute Donald Trump, I think, “Clearly, you haven’t met any Democrats.”