Tesla Has No Clothes
Tesla is at a ridiculous valuation compared to its peers. Elon Musk is a genius self-promoter, but as the market starts to see the lack of profit and the failed promises coming from Elon and his Tesla, the dumping of Tesla will be something to behold. Here is my reasoning.
Tesla sold 1,789,229 vehicles worldwide in 2024, and made a profit of $7.1B. Meanwhile, the #2 auto maker by market cap, Toyota, sold 10,159,336, and made a profit of $30.7B in 2024.
Toyota sold 6-times more vehicles and made 4-times more profit than Tesla, but Tesla’s market cap is 5-times higher than Toyota’s.
I believe this discrepancy in value has developed because of the cult of personality that Elon Musk has built around himself. Elon Musk is a genius at promoting himself as ‘the smartest man in the world’, and at receiving money from the Government — environmental grants and contracts for NASA. Elon was not a founder of Tesla; Martin Eberhard and Marc Tarpenning were the engineers who started Tesla.
Using his cult soapbox, “X”, Elon has bought his way his way into the White House — Tesla doubled in price in the days following the election (blue-arrow below) — but that may turn out to be a Faustian overreach.
stockcharts, ANG Traders
Now that his proclamations for future — fully self-driving cars (without LIDAR), Geoengineering Mars (instead of preserving the Earth itself), Humanoid robots in our homes, neural signularities — are not panning out, and as his legally-dubious involvement in the DOGE takeover of the Treasury’s payment system comes to light, many cult members are having second-thoughts about Elon’s intentions and even doubts about his intelligence. Most of Tesla’s valuation is “good will” from the investing public, but now even important insiders are selling Tesla shares. According to you.com:
- Robyn Denholm (Chair of Tesla’s Board):
Robyn Denholm has adopted a trading plan to sell a portion of her Tesla shares. Along with other directors, she plans to sell up to 1.13 million shares of Tesla stock, amounting to approximately $300 million
- Kimbal Musk (Elon Musk’s Brother and Tesla Director):
Kimbal Musk is also part of the group adopting trading plans to sell shares as part of the same $300 million total.
- Kathleen Wilson-Thompson (Tesla Director):
Kathleen Wilson-Thompson is another director involved in the planned sale of shares, contributing to the 1.13 million shares being sold.
When one’s own brother is getting out, trouble can’t be far behind. And when it comes to Tesla, there is good reason to consider it ridiculously over-valued compared to its peers; Tesla is valued at twice the combined market cap of the next 9 top car makers.
The technical chart above shows that the price of Tesla stock has now broken below the first gap-support (pink highlight) and is on its way down to the next support zone at the $275-$300 gap. Eventually, the price should return to the pre-election level of $250, followed by the $200 level.
I am short TSLA via the etf TSLS.
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