Investing in Tesla’s stock is like building a high rise building on the San Andreas fault. You figure everything has worked out fine thus far so all the predictions of doom must be wrong. But both will eventually end in a spectacular collapse.
Proof that Tesla’s stock price is a bubble waiting to collapse is the fact that it rose sharply on news of a stock split. How is that proof you may ask? When the stock price was announced there should have been no impact on the stock price. It’s literally like asking a gas station cashier to break a $20 bill by giving you three fives and some ones. You have no more or less than you did before.
So if the stock price went up on news of a stock split, it’s due to current buyers thinking that gullible new buyers will think that they are getting a deal. But a stock split means that every single share of stock is entitled to smaller piece of the profits. Current investors are expecting a new influx of dumb money. That is what you call a bubble. A price increase unrelated to future plans but instead by fooling gullible investors.
It is also what you call a pyramid scheme. It’s dependent on bringing in new money. And as soon as those new buyers dry up, the lack of momentum will turn into a rapid downward fall. This is what Musk fears more than anything else in life. Don’t ever envy Elon Musk. His life must be a living hell trying to keep his bubbles ever inflated.
It is also what you call a pyramid scheme. It’s dependent on bringing in new money. And as soon as those new buyers dry up, the lack of momentum will turn into a rapid downward fall. This is what Musk fears more than anything else in life. Don’t ever envy Elon Musk. His life must be a living hell trying to keep his bubbles ever inflated.
At the very least, investors in Tesla should be concerned about what happens to their investment if the very unhealthy looking Musk was to die. Without Sisyphus to roll that boulder up the mountain every day, the stock will collapse. And have you noticed how terrible Musk looks these days?
Tesla is already valued more than the 20 largest automakers in the world. This means that if Tesla absorbed the sales of Toyota, General Motors, and Ford it would still be wildly over valued. And Tesla is nowhere even close to just Toyota or Volkswagen, let alone the top 3 – 20 combined. It can never deliver on the implied profit of it’s stock price. Betting against Tesla is a sure bet.
And like the San Andreas fault, the question isn’t if, but when.
And like the San Andreas fault, the question isn’t if, but when.
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