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May 3, 2020 by Zachary Shahan
People got a little scared at the end of this week when Tesla CEO Elon Musk tweeted, “Tesla’s stock price is too high.” You should rephrase that: Tesla shareholders got a little scared.
I’m not offering information on whether the price is too high, too low, or correct, so don’t take anything here as a guide to the action. However, a few things caught my attention in his statement and response.
First of all, I immediately remembered Elon saying in an interview about CNBC essentially the same in August 2013. So, I wasn’t that surprised by his tweet. He has no problem recognizing when he feels the stock price has gotten a little ahead of the company. Unfortunately, it seems that CNBC you’ve removed that video (or at least the insert doesn’t work anymore), but here are your comments:
“In fact, I think Tesla’s value right now is … I mean, the market is being very generous, and they’re obviously giving us a lot of credit for future execution, so we’ll do everything we can to honor the faith. of the market has put in us … But I really feel that the assessment that we have received, that we have now, is more than, is more than what we have the right to deserve, honestly …
“We need to make sure we really get the ball out of the park for years to come. …
“Our share price is obviously too high based on historical finances, or even current finances, so the value is very much based on what the future cash [inaudible] will be like.”
It seems like that was Elon’s basic point this week as well, not that Tesla will eventually not achieve more and deserve an even higher share price (he has said it so many times), just that is what Tesla has accomplished to date, seems a little inflated
While that may be the case (who the hell knows?), One of the best arguments I’ve seen for the high stock price amid this global coronavirus pandemic and economic shutdown is that there is no good place to park. your money . Treasury bond? No thanks. Real estate? Maybe not. An NBA team? Maybe when you’re allowed to play basketball again. Airlines? Hotels? Amazon? Apple? Nothing is super convincing for many investors, but there is a feeling among many that Tesla has an exceptionally bright future and is a good medium and long-term place to save some cash. Well, I suppose it is obvious that this is what people have been deciding when they consider that Tesla’s market capitalization is currently double that of Volkswagen and Volkswagen is the second largest or even largest automaker on the planet in terms of volume.
I am not saying that it is not strange for a CEO to speak ill of the share price of his own company. I thought about tweeting, “Well, it looks like Elon has joined $ TSLAQ. Strange times. But aside from thinking that few people would see my tweet and it would be a waste of time, it’s important not to distinguish between people who somehow think Tesla is headed for bankruptcy ($ TSLAQ) and people who think the price of The shares have risen a little ahead of the company (Elon). Actually, there is a big difference between those two parts, something I’m sure you wouldn’t notice if I didn’t tell you.
Another thing that people have noticed and that Elon has apparently confirmed is that this tweet, as well as those for the sale of all physical possessions (including houses), was at least intended to discredit hostile claims that he just wants USA USA Reopen because you are a greedy and selfish bastard. Along with that is the statement that the only thing that matters to you is the price of the shares, since their compensation is closely linked to the rise in shares. I assumed it was part of the reason behind these amazing tweets. Anyone who knows anything about Elon Musk, in my opinion, knows that he is extremely concerned about the work he is doing and that he probably does not swim in gold coins like a certain duck; in fact, you may care little about your net worth. Who knows for sure how much he cares about his ranking among the world’s richest, but Tesla fans know that is not what is driving Elon in closing. There are many other theories that make much more sense. As a final note on this part of the story, Elon also doesn’t like to be perceived in what he considers to be an inaccurate (and negative) way.
It surely bothers him that many people think and claim that he is a greedy billionaire who does what he does in business basically just for the money. The idea is ridiculous to him.
Reading the responses to Elon’s tweet about the stock price, I was struck by the fact that I often forget that many Tesla fans and followers today did not follow Tesla and Elon Musk years ago, in this case 7 years ago. While that tweet this week immediately recalled his comments from 2013, a large portion of people had no idea that he had said all of that in public to one of the country’s largest media outlets. Perhaps it is wise to try to remember more often than even the moderate historical context regarding Tesla can be helpful to many readers.
When you take that historical comment into account, it’s easier to see that Elon’s honesty and openness sometimes override what is “normal” or expected of a CEO. While the social crisis and the arrival of a baby may be causing you some mental and emotional stress, the comment on the stock price aligns well with things you would say at other times as well.
Incidentally, at the end of August 2013, the share price ranged from $ 140 to $ 170 per share. It was $ 701.32 in the closing bell on Friday. Elon’s comments on the stock price in August 2013 are not really relevant today, and this week’s comments are unlikely to be very relevant (and may seem quite shocking) in 2027. Wow, it’s hard to even imagine where could be the company. 2027.
As before, the value of the company today compared to several years depends on whether Tesla “can really get the ball out of the park in the years to come.” Elon’s assessment this week on whether the stock price is tied enough to Tesla’s current and short-term finances doesn’t really matter.
(Personally, though, I wouldn’t mind a further drop in the share price of such tweets, as it would basically give me a chance to buy more shares at a lower price. But that’s just me.)
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About the Author
Zachary Shahan is trying to help society help itself word for word. He spends most of his time here at CleanTechnica as its director, chief editor, and CEO. Zach is recognized worldwide as an expert in electric vehicles, solar energy and energy storage. He has presented on clean technology at conferences in India, the United Arab Emirates, Ukraine, Poland, Germany, the Netherlands, the United States, Canada and Curaçao.
Zach has long-term investments in Tesla [TSLA] – After years of covering solar energy and electric vehicles, you simply have great faith in this company and feel that it is a good clean technology company to invest in. But it does not (explicitly or implicitly) offer investment advice of any kind in Tesla or any other company.
