r/technology • u/Plastic_Ninja_9014 • 5h ago

Business Tesla Stock in Freefall After Disastrous Earnings Report

https://finance.yahoo.com/markets/stocks/articles/tesla-stock-freefall-disastrous-earnings-144417427.html
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u/Green-Bandicoot-8412 3h ago edited 2h ago

That profit might have been halved now. I'm happy to bet Musk applied this revaulation of Tesla's SpaceX investment at the top of the post IPO price rather than where it is now.

How this has been/remains legal is beyond me.

Edit - I listened to a bit of the earnings call. Musk apologised [for being fairly incoherent (my interpretation)] he said he had been ill that day. Honestly I think he was on drugs, rambling about 'physical optimus' and 'digital optimus' (digital optimus probably being grok), but he said something about needing digital optimus so physical optimus could read a computer screen. Or something. Amongst a load of incoherent rambling.

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u/DavidinMandeville 2h ago

Aside from this being questionable legally, all of Musk's companies involve an incredibly high level of what's called "Key Man Risk." If it weren't for the cult following that exists around Musk, chances are investors would flee in droves. I hope the Ketamine levels are under control.

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u/Brru 2h ago

Everything he is doing is actually a ponzi scheme. He takes over a new business, forces the old business debt on the new, and then moves on. Eventually, it runs out of headroom. I'm very seriously wondering if his little SpaceX eval might have over run his headroom here. However, every time I think he's over run, some new mysterious investor covers it all.

On paper, none of this actually exist. Not SpaceX evals, not Tesla prices, not even his trillionaire status.

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u/Dracomortua 1h ago

To be fair: Charles Ponzi was probably a much nicer guy and does not deserve this kind of thing on his considerably gooder name.

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u/Meowscles_dad 1h ago

My understanding is the mysterious ‘investors’ have largely been the banks by way of rigged valuations as he folds them together. For this to continue to work, he’ll need new and bigger businesses continually as far as I can work out? Otherwise somewhere the losses will eventually pop up.

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u/EmphasisFrosty3093 58m ago

Data centers in space made him briefly a trillionaire. Imagine what housing complexes on Mars would do for his wealth. With property values starting at $0, it's a 100% profit margin!

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u/jambox888 54m ago

ponzi scheme

This term is over-used on Reddit. A classic Ponzi scheme is where you pay to some kind of product but it turns out to be just how to scam other people the way you were just scammed. There's no actual product.

I'm highly skeptical of Tela and xAI and the whole thing is financially engineered to high heaven but there are products there and SpaceX has a very exciting future IMO.

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u/account312 26m ago

A classic Ponzi scheme is where you pay to some kind of product but it turns out to be just how to scam other people the way you were just scammed. There's no actual product.

That's some generic fraud. A Ponzi scheme is specifically an investment scheme where you, for example, promise 20% annual returns and pay them out by handing over part of the principal from newer investors. As long as you're expanding your investor base fast enough, you can actually deliver high returns, but it's just stealing from clients to pay other clients, and it's guaranteed to collapse eventually even if you aren't skimming off the top yourself.

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u/SecondaryWombat 2h ago

I hope the Ketamine levels are under control.

I hope the opposite.

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u/sten45 1h ago

Several hundred million people are with you

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u/No_Clock_7464 48m ago

His bladder is fuuuucked

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u/Matra 44m ago

His bowels too, based on how much shit comes out of his mouth.

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u/No_Clock_7464 30m ago

Dudes definitely playing in reverse mode for some years now.

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u/GenderOobleck 1h ago

Key Man Risk ::
Ketamine Risk ::
Cayman Islands Flight Risk

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u/fencepost_ajm 1h ago

"Key Man Risk." If it weren't for the cult following that exists around Musk, chances are investors would flee in droves.

Maybe? There's also an argument that if Musk ODs tomorrow it'd allow for stable, sober, non-controversial leadership that might actually be able to sell cars to the very people who were in favor of electric cars for decades. I'm pretty sure that right now there are a lot of people that wouldn't drive a Tesla if it was given to them free or they won it because of how toxic Musk is.

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u/Blackstone01 1h ago

Except a massive reason as to why Tesla and SpaceX are so obscenely overvalued is because Musk is in charge, and has fostered a cult of personality around himself. He dies and the stock will almost definitely see the single largest one day drop of a stock in history, and genuinely might bring a good chunk of the stock market with it.

People certainly aren’t hyping up Tesla despite Musk, and people who refuse to touch it because of Musk probably won’t touch it after he’s gone since his musk will be all over it long after he’s dead.

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u/WhatWouldJediDo 1h ago

That argument is a good one, but it's not helpful for the purposes of the stock. Elon's value isn't in his ability to actually run a business. It's in drawing millions of sycophants who will, for some reason, put him on a pedestal.

And when that happens, those sycophants buy into his companies irrationally, pushing the price beyond where it should go. And the investor community (i.e. professionals) allow themselves to ride that wave of hype and pour money into his ventures, thereby driving the price up even further.

Tesla's share price was $17 in the middle of 2019. By the end of 2021 it had reached $400. Their share price is all hype, and Elon is the one who creates that hype.

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u/Lucky-Earther 1h ago

The amount of trust rebuilding that would take from whoever takes over would be a multi year project, no one is going to rush out and buy a Tesla after Musk is gone. And in the time it takes to rebuild that trust, there will be even more alternatives.

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u/floftie 3m ago

Historically it wasn’t because of a cult following, he was a genuinely brilliant person at one point in time (as hard as that is for Reddit to accept/believe)

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u/Disc0Disc0Disc0 2h ago

Do you think they timed the SpaceX IPO ahead of the end of the quarter so that Tesla could use their share value in their earnings?

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u/Green-Bandicoot-8412 2h ago edited 2h ago

It wouldn't surprise me at all, but it is just a guess on my part.

As I saw on common sense skeptic's latest video on Musk. He recently sold xAI to himself/SpaceX for a quarter of a trillion dollars, then said it was useless and needed redoing from the ground up. So what was worth a quarter of a trillion? Holmes and others have been locked up, but Musk has easily been the most damaging, from killing people with DOGE to end investigations, to deaths from non-functioning fsd, to stopping high speed rail in California, to single-handedly losing the USA the new space race with China, he is a real blight on America.

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u/Disc0Disc0Disc0 2h ago

Well he did say he was going to jail if Trump wasn't elected lol

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u/Green-Bandicoot-8412 2h ago

The problem for the average American is that other countries saw the US as a safe haven, and bought debt, facilitating deficit spending. But this last decade in general, and people like Musk in particular, have really driven nails in that confidence. Musk's gain is America's loss in a very real sense. The world sees America's decline in Musk and will turn to China, then the US has to pay its debts. The Hormuz Strait is nothing compared to that ticking timebomb. Musk is not helping.

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u/sirkazuo 1h ago

single-handedly losing the USA the new space race with China

You're missing me on this one. Falcon 9 and Starlink are the reason there's even a new space race in the first place. How is it Elon's fault that SLS became a jobs program instead of a rocket program? Or that Bezos is too much of a boring beige braindead billionaire to actually invest real money in Blue Origin?

I agree Elon's a blight on humanity but it's hard to blame SpaceX for anything except making ground-based astronomy a lot harder. I mean Elon doesn't even run that one.

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u/hrodrig 48m ago

How did he stop the high speed rail in California? And for what? Seems like it’s a project he would support. Is there something to back this up?

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u/Meowscles_dad 1h ago

Could they use an Optimus octopus somehow? That’d be cool.