Tesla Stock

 I skimmed this Motley Fool article about the potential for Tesla's stock price to rebound. The basic argument seems to be that, historically, stocks that fluctuate like this usually bounce back.

Now, I'm NOT a finance guy. Stonk picking ain't my thing. However, I've spent some time studying economics from a non-mathematics perspective; I look at the people and ideas that underlay all the very fancy math that finance people use. I'm not a quant, I'm a qualitative guy.

So, with that caveat out of the way let's look at Tesla. The Price/Earnings ratio basically compares how much revenue the company has to the price of its stock. As I write this, it's Price/Earnings ratio is around 130. Generally speaking, the P/E ration is preferred to be about 20-25. If it's under that, chances are that stock is undervalued. If it's above that, the stock is either in a bubble or - sometimes - it represents hopes for future growth.

It's not really unusual for a tech company to have some insane P/E. Apple's P/E is around 34, I don't think that means Apple is overvalued. Even a high growth, speculative stock like Nvidia is at 37. How in the holy hell can you look at 130 and think the stock is anything but wildly overvalued.

I concede that looking at P/E is very old fashioned, and you would have missed out on some real buy low/sell high opportunities if that's all you looked at. On the other hand, it's very real.

So at one point, Tesla was selling for 488 and now it's at 260, AND STILL THE P/E IS TOO HIGH. The assumption has always been that Musk some sort of Tony Stark Supergenius who is going to write the future, like Henry Ford and Edison/Tesla combined. It is difficult to look at DOGE and conclude that this guy has a handle on competence. How do you look at him swinging a chainsaw around at CPAC and think, "yeah, this guy is the future."

The real question is not why the price of Tesla has fallen. In my mind, the question is why hasn't in fallen further?

This is yet another way in which Musk overlaps with Trump. He is likely another example of the Golden Age of Fraud we are in. My question is to what degree are foreign entities, but especially governments, propping up this stock? His sales are tanking. He's clearly distracted. He's likely addicted to ketamine. He's showing his ass daily. 

Tesla has always made somewhat crappy cars with really awesome batteries. The assumption was that Tesla would replace legacy automakers. Instead, we are seeing legacy automakers begin to capture more and more of the EV market. Tesla as a brand is increasingly associated with a guy who makes Nazi salutes while campaigning for AfD. 

The stock price should be lower.

But, if I'm China, wouldn't it be worth propping up the stock in return for whatever information Musk could give us? For access to Starlink? This is Musk the Overmighty Subject being a massive security risk. 

Here's the other thing. Musk's purchase of Twitter was kind of pegged to the health of that Tesla stock. He financed so much of the purchase off the back of the elevated price of Tesla that if it dips too low, all of that debt - which was backed by Tesla stock - becomes a massive problem. At this point, who are what is propping up Tesla stock is preventing banks from doing something they REALLY don't want to do, which is repossess Twitter, which is itself a largely money-losing venture.

Here's my concern and my question. Tesla's stock price is absolutely critical for the rest of Musk's empire, but especially Twitter, which is massively important for his fragile little ego. Musk has carved a really important role for himself with Starlink and SpaceX that has dire implications for national security. Is anyone looking at foreign governments striking deals with Musk to prop up his overvalued stock price?

Since this is Trumpistan and the Golden Age of Fraud, I have to assume that no one is. However, markets ultimately figure this stuff out.