In one of the posts, I mention that we need to write memoirs before we get too old since old men often don't differentiate between the important and the trivial. And I'm not getting any younger. This blog is mostly for my kids, to understand a bit about the world I came from and lived through. Welcome to anyone else, but this is not profound and it is very personal.
Wednesday, January 13, 2016
TESLA, Third time
TESLA FOR THE THIRD TIME
First, September 2014, second August 2015 and now, January 2016. Although I write about the past a lot, this is the only longitudinal series.
Today, January 13, 2016, the stock of Tesla is about $210 per share, again pretty volatile but with a total market value of nearly $28 billion.
It is hanging in there, the bubble has still not burst. But we will keep track. General Motors still has a bit of an edge in total market value (market cap) at $48 billion.
We will continue to keep track.
post below was
written 11 months ago. I don't think it was ever posted, which is no
surprise as I write a lot of stuff that never sees the light of
day...fortunately!! But the date was September 4, 2014 and the
observations were made below. Just wanted to update.
The stock was at $290 and the sky was the limit. By
April, the stock dropped to $180; yesterday it was $270 and this morning it is
opening in the $240 range, or down 10% plus. That’s volatility.
The previous article
pointed out the small production and it is still a problem as 2015 was the year
that they would achieve a pace of 100,000 units per year. Well, folks, it ain’t
gonna happen—they changed “guidance” by -15% and still think 100,000 is going
to happen…next year.
company loses $16,000 per car, up from a loss of $11,000 per car last December.
The $2.3 billion raised in the market last year is essentially gone, burned up.
Are we starting to
see a trend here? It is still valued at $34 billion (which is less than Apple,
valued at $650 billion) but I can’t reconcile that with the current GM value of
Is anybody else
thinking tulip bulbs? Google “tulip bulb craze.”
Soooo, the logical
thing to do is short the stock, right? Not so fast, there, Baba Looey. It is
already close to being “fully shorted” meaning a lot of short interest which is
also dedicated buying interest since the shorts have to be covered eventually.
The bigger influence, in my mind, is the power of Wall Street. Don’t discount
the ability of the brokers who are going to pick up hundreds of millions when
they place the $2 billion or $3 billion in the next financing round.
Let us just sit back
and keep track and determine if the markets are, indeed, efficient.
I have not been an
electric car fan, principally because I think it requires too much government
support to make them even marginally competitive in the marketplace. Now, Tesla
is getting about $3 billion or more in tax breaks to put a factory in Nevada.
The second reason I
don't think electric cars should have a place on the planet involves the
ecological damage created by the batteries. The awful ecological disaster in
Canada where the raw material is mined has been used by NASA because it resembles
a moonscape. The factories where the lithium is processed in China are
polluters on a cosmic scale.
But...since the cars
run part of the time on batteries (Tesla's are all electric, not hybrid as I
understand it), they are "green." Now, the power plants that supply
the electricity to power the batteries are deemed to be enemies of the
environment by the politicians, but that doesn't appear to matter.
Now, get this:
Excitement over Tesla’s future has
caused Wall Street to give this momentum stock a $35 billion market
capitalization, versus General Motors’ $55 billion. Tesla sold 39,149 cars
through June 30, while GM sold north of 9.7 million vehicles last year alone.
Tesla has posted net losses of $581.93 million from January 2012 through June
2014, while GM has posted net income of $13.84 billion over the same period...
Not in this article,
but in another it was noted that Mountain View, California saw a lot of Tesla
purchases. I guess you can afford one when your house is worth $1 million, $773
per square foot.