SeekingAlpha is full of bearish or ‘ant-Tesla’ articles. The latests one:
Tesla’s Valuation: A Derivative Of Improbable Expectations
Another bear article dissociated from reality. I’m not going to address ‘Tesla is just a car company’ because that notion has been disabused many times already.
A minor point: “However, I am writing this article to address my concerns with Tesla and why I’m not optimistic that the company can’t hold up its massive valuation” is a double negative making a hash of the argument. The author might consider hiring a copy editor.
A less minor point: “Tesla has achieved lofty valuations purely derived from speculation and improbable expectations for the company.” Of course, delivering millions of cars had nothing to do with it. The author might consider fact checking.
I’m going to concentrate on just one topic, “Addressing misconceptions that associate Musk’s privately owned projects with Tesla stock.”
“The aforementioned companies are privately owned and operated by Elon Musk.” Correct!
“I hear again and again about the innovative technologies that Musk is associated with as justification for Tesla’s valuation. To clear any misconceptions, Musk’s private companies are not and will not yield equity for Tesla or its investors.”
The author, Dalton Hicks, clearly does not know how innovation happens. The saying ‘there is nothing new under the Sun’ is correct in the narrowest sense but history clearly show human progress. If there is nothing new, how does it happen? The other day I came across an article mentioning in how many ways a 52 card deck could be arranged, ‘in the range of 8x10^67.’ An 8 followed by 67 zeros. https://www.mcgill.ca/oss/article/did-you-know-infographics/…
Colonel John Boyd explained it his briefing ‘Analysis and Synthesis Loop’ https://www.breakingthewheel.com/destruction-creation-john-b…
How does this apply to the Musk companies? The multiple ideas of his companies are present in his mind and he is capable of doing the Analysis and Synthesis Loop. Just one simple example, the stainless steel used in xSpace rockets found its way into the CyberTruck. On a higher level, an ex-Tesla employee said that once you are certified for any one of the Musk companies you have access to all of them. This allows all these employees to also do the Analysis and Synthesis Loop. It’s for good reason that Sandy Munro is amazed by the engineering going into Tesla cars.
While equity might not flow between the Musk companies, innovation certainly does and it’s innovation that creates the high valuation and it keeps the pack of ICE incumbents and EV wannabes trying to catch up.