This is ugly. I do not know where this ends but I would wait till the knife hits the ground and starts turning up.
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I, for one, believes that Musk should be voted out as CEO. He keeps demonstrating very bad decisions with X and now with his new position. I don’t believe he pays attention to Tesla anymore. His behavior has severely damaged Tesla.
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I agree…the stock is pretty bad right now. I have been only trying to amateur-trade it recently (by recently I mean the last several months) because, even prior to all the other stuff going on (the govt stuff with him) I’ve come to the conclusion Tesla might be better off being led by someone else. Even SpaceX at this point. I say this with complete objective honesty…not trying to be critical, I just mean it when I say I don’t know why the companies would be better with him at this point. Maybe he does bring something to the table, but I have trouble detecting it. Not sure I ever did. I used to own TSLA for the long term, but I stopped when I realized a lot of the timelines he gives out seem to be capriciously stated (robotaxi, launch to Mars, etc.).
I know this is wrong to ask, but I currently am not signed up with Stock Advisor (will return hopefully soon, I think it is a great service, especially during times of volatility). Just curious if the service is still sticking with the stock, or if it has any concerns about leadership. I hate asking, but truthfully, I am just so curious if the Fool stands by leadership in this case, because things have gotten really weird. If I am wrong to ask, a moderator can delete and I can re-post without this part. (Alternatively, is there a free article link that answers my question perhaps?)
I’ve said this before, but it seems like Musk is a big science-fiction fan who wants mostly to be involved with stuff like Mars and brain-chips because he remembers the artwork from those old sci-fi paperbacks of the 60s and 70s. He really should take Twitter and use it as a core asset to create a movie studio that makes shows and blockbuster sci-fi material. I mean this when I say I think he would be happiest doing that, being a Hollywood mogul. I think all those tech guys really want that more than anything else. It’s too bad, because I really hoped he would launch a mission to Mars. We’ll never colonize it, might not even be able to land and take off on it, but an orbit around the planet would have been something to behold. I was looking forward to that. Now, I can only hope NASA will finally do it.
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I would like to point out that your post is almost entirely about your opinion to which you are most certainly entitled to.
A different point of view: The US is going through drastic changes which create uncertainty which markets hate. When you look at TSLA in isolation you might think it’s all about Musk. If you look at stocks similar to TSLA you’ll see that the uncertainty is market wide.
One major recent non political development was the rise and acceptance of neural network based AI which drove stocks like PLTR to crazy heights. Then the Chinese DeepSeek announcement cratered AI stocks. In the following chart you can see that TSLA is where it was six months ago while ARM and NVDA are below where they were six month ago.
My advice would be to put your emotions on ice and concentrate on the realities of markets which are driven by the kind of emotions on display in this thread. Understanding individual stocks is not enough, one needs a feel for the market as a whole.
About my portfolio, I’m heavily invested in TSLA and use covered calls to generate income. I don’t usually do covered calls with stocks held for the long haul such as TSLA. In December, seeing the crazy rise in TSLA I was expecting and waiting for a break in the trend. A falling stock held for the long run is a great covered call candidate in falling markets as most deep OTM calls will expire worthless. Between December 18 and February 5 I made 7% based on the TSLA high of around $480. It would have been 8% had I not made a serious mistake with the last call of the series. The other half of the portfolio generated another 7% in the three months December through February all based on understanding the market as well as the individual stocks.
I still have the stock and lots of additional cash, about ten additional months worth of living expenses. The additional cash is important because one cannot know how long the market will be depressed, it could months. cash is a warm cuddly safety blanket like Linus has.
This is not bragging, it’s advice to put your emotions on ice and to think like investors. How to survive the inevitable and unexpected downdrafts.
If you still think that Musk is a liability for Tesla then TSLA is not the stock for you but selling today you get half the price you would have gotten three months ago which highlights the importance of understanding markets. Back in December Musk was already deep in politics, actually ever since he bought Twitter. Do I like it? I have mixed feelings about it.
The Captain
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Ah, the “it’ll come back” theory. Didn’t seem to work for Lucent, AOL, @Home, Cisco, WorldCom, Global Crossing, AltaVista, Excite, GeoCities, Netscape, and lots more. (I was going to include QualCom, but I looked it up and it did come back. Only took 19 years.)
Tesla was so far out over its skis that this was bound to happen once the scales fell from the eyes of big investors, leaving only the fanbois contingent behind.
Here’s an interesting statistic: if Tesla falls another 50% , its market cap will still be bigger than GM. Now maybe that’s deserved, because Robotaxis will take over the world (doubtful) and nobody else will have a Robotaxi except them (doubtful) and everybody will be buying 6-packs of cars to drive around ferrying people back and forth (doubtful) and there won’t be any maintenance or cleanliness problems (doubtful) or liability issues with FSD (doubtful), or maybe “driving” AI transfers seamlessly to “medical” AI or some other field (possibly, but speculative), or Solar City will suddenly bloom (unlikely), or …
Anyway, it has further to fall. Maybe it won’t, but I don’t think Elon is minting fanbois anymore, there’s a recession coming, and believers are jumping ship.
You’re welcome.
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Captain, very fair post. I agree with just about all of it, and it is good advice.
Wish I could do all that covered-call stuff, but unfortunately I am limited. But yes, that would be the thing to do.
I guess my post is opinion-oriented, but when you think about it, talking about long-term investing is based on opinion/belief, because no one can predict the future, not even short-term…so I do find it tough to continue backing TSLA considering the way the CEO’s mind seems to work. An example: if he really wants to send someone to Mars (and I don’t think he really is that big on it besides the sci-fi-paperback mindset I mentioned before), why buy Twitter when, if he could raise that kind of consortium-funding, he wouldn’t do it for Mars itself? That troubles me insofar as how I relate it to how he thinks about TSLA. With all the sales issues (which I think is not all related to politics) I would think he would have been more closely attentive of the situation. But, objectively, he doesn’t seem to be.
However, technically speaking, you are correct about the market in more ways than one. It’s all emotion. If a stock goes up because there are more buyers than sellers, or down for the opposite reason, and not because intrinsic value is set by an objective third-party force that is always correct, then the beauty-judge-contest model of investing/trading comes into play, and that is all emotional. And yes, I think we discussed DeepSeek’s effect before too, you are right on that as well.
I am not selling my underwater TSLA right now, I will sit on it as you mention to do. Came close to. May dollar-cost the basis as well to get out of it. There will be the inevitable bounce and then eventual end of the correction/bear market. I foresee rate cuts and possible stimulus coming to the rescue. But I cannot predict for sure.
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Goofy, you bring up a lot of good points. And on your (doubtful) issue with Robotaxi…
Here’s my honest question about that. I have seen Musk talk about it and other CEOs…I have seen hedge-fund people talk about their having demos of the product and being blown away. Here’s what I, in good faith, want to know:
Would Musk, or any high-level CEO/executive, use a Robo-limo to get around?
I think I can safely say no.
When all the robo-vehicles start to cause traffic jams, will they take alternate routes and helicopters to get around? Probably yes.
Would they ever use exclusively Robo-security guards powered by AI? They would not.
Funny, too, because I give credit to Bezos and I think Branson for actually going to space (surprised Bezos has because for someone who wants to live forever, I think the first rule is to reduce risk like that)…Musk never has, I don’t think.
I will say if robo-cars do actually develop somewhat, I do see a lot of individuals buying them and starting businesses out of them, with companies that supply loans for them doing well on the stock market as IPOs. But I see a lot of bankruptcies there too and a lot of failed stocks…
None of us can. The best we can do is to shift the odds in our favor.
The Captain
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Oh don’t get me wrong, I do think there will be a Robo-taxi business, I just doubt it will be powered in large part by “individuals”. After all, there’s a taxi business now, and most of the cabs are individual driven but fleet owned . There are car rental businesses now, lots of them, but they are major corporations, with the exception of a few Rent-A-Wreck Jonnies bottom feeding around the edges.
My doubt comes in two flavors: I doubt a lot of people will make a business out of renting their own personal car, unattended, to strangers all day long - and that if they do they will find it depreciated much faster than they expect. (Some will try, of course, and variations like “only rent to friends” will happen, but are inherently limiting.) And buying a fleet of them will take some serious investment, that’s a lot of metal to pay off - not to mention maintenance, cleaning, charging, and all the other responsibilities that come with “car rental.” There’s a reason Hertz et. al. wash and vacuum the car between every rental (yes, it’s a longer period, but still…) and there are still the issues of charging a fleet, maintaining multiples, etc. Even if Tesla (or someone else) takes care of the booking and reservations for a fee, there’s still a lot of stuff to do. That implies a fairly large business, with the scale to do these things efficiently.
That said, yes, there will be a business. I just believe the hype is far out ahead of the realistic prospects, that’s all.
It’s also worth noting that there are always things unanticipated in a “never-before” business. Tesla (and others) didn’t consider the idea of leaving charging stations unattended 24/7, with thieves chopping the wires for copper, or vandals torching the stations for fun - things that don’t happen with manned gas stations, for example. Sure, all this can be overcome, just that it’s not as easy as is being fantasied.
Oh. And if there is a Robo-taxi business, it’s not clear to me that the automatic winner in it is Tesla. Maybe it will be, but there are multiple others in the game, including the Chinese. You spin the wheel and hope for the best. In this case you can’t just “buy the group” (a la gorilla game) because the other entrants are so big (Amazon, Google, BYD, etc) that the investment will be insignificant for some time to come on their performance.
Given that the target market is the general public, how is this relevant?
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The taxi business uses expensive medallions to keep down the competition. Many would be taxicab drivers cannot afford the medallions. They are forced to work for the capitalists that can.
The Captain
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That’s my point. The medallions aren’t used to keep competition down. They’re used to limit the size of the market entirely. (Small difference, I admit.)
But if you want to buy a six pack of Robotaxi’s, it would require significant capital - (including a parking lot to house them, multiple chargers probably requiring a sizable electrical facilities upgrade, a maintenance worker or two, a way to clean them efficiently, and so on.) Not saying it can’t or won’t be done, just that this will not be a business for the average joe.
The medallions are not worth as much since uber. The model I suspect will look more like Uber than Taxi’s. You will be working for Uber or Lyft rather than for yourself.
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No doubt. With medallions being required and licensed, it was a closed system. No competition, no nothing. (In some ways it’s like unions, more below). Once Uber (and others) smashed the requirement that you be appropriately “licensed”, the medallions were for all practical purposes, useless. Why spend 100,000 or more on a medallion when you can just put a little neon flag in the window and do it anyway?
Well, Uber & Lyft only take a piece, you get the rest. Presumably Tesla would take a percentage for building the connective tissue: putting rides and riders together, and the rest would flow to the owners of the metal. Some say Tesla would own it all, but that would require a lot of company hardware; the reason Uber is so successful is that it’s capital light (almost capital non-existent). Everybody else provides the metal and manpower, they get play gatekeeper and take a piece. (Same with AirBnB, eBay, etc.)
Without the need for drivers, the Robotaxi could work 18 hours a day (except for recharging time) and the labor costs would be reduced, presuming no vandalism or slobs dumping milkshakes on the seats. But it’s still a lot of upfront investment, maybe a bank would loan on it, but with EVs depreciating like Diddy’s reputation, maybe not.
Unions: when the US was a closed system and unions were the big jobs, it was really swell (for them.) Once “foreign labor” was allowed (via trade) that closed system evaporated, and we have seen the results in the abandoned factories and offshored jobs, the perfect result of the capitalist CEO’s job.
Tamhas, you ask about the relevance of my question (about Musk using his own product for security and transportation) to the consumer market (a fair question on your part):
To me, that would be the best advertisement of safety. Besides being an ad meant to foster a certain perception, it also might indicate that the tech truly is safe.
However, I know CEOs and other officials etc. would never use AI over humans for any of that. They would never trust it that far.
Which makes one wonder, perhaps…