Tesla Earnings Bombshell Reminds Us That Tesla Is a Tech Company
Tesla isn't a car company. It's a tech company that makes carsRead full story
It seems easy for Wall Street and analysts alike to get sucked into the "Tesla is a car company" paradigm. Don't get me wrong, Tesla needs its cars to pan out in order to stay afloat - but when people get frustrated seeing Tesla's market cap near that of established car companies like Ford because they
It seems easy for Wall Street and analysts alike to get sucked into the "Tesla is a car company" paradigm. Don't get me wrong, Tesla needs its cars to pan out in order to stay afloat - but when people get frustrated seeing Tesla's market cap near that of established car companies like Ford because they can't wrap their heads around how a company that struggles to manufacture a sedan profitably can possibly compare to a proud stalwart of the American auto industry, they're missing the point. Tesla as a tech and as an energy company has the ability to totally change how cars are used in our society. That's not something an equity analyst or a short seller can realistically bake into a model at this point. That is, however, a serious consideration that should be additive to any view on the stock's terminal value. If, and that's a big if, Tesla can survive these next few quarters and begin turning reliable profits, their strengths in tech have a real chance of slingshotting the company into the stratosphere. A profitable Model 3 with advanced self driving AI renders Uber obsolete. It renders individual car ownership obsolete. Combine that with the headway Tesla is making in distributed energy generation and storage tech and suddenly you have a company capable of making waves on par with disruptors like Amazon.
So I'd forgive short sellers to an extent for betting on the company's short term struggles. But it seems like enough people buy into the terminal value story that sticking to the fundamentals will burn bears time and again. To the tune of $1B paper losses, no less...
Seems like Tesla continues to bite off a lot more than it can chew and should focus to master the Model 3 first.
Crazy technology, and important stuff to keep in mind when talking about Tesla's performance as a business
Apple wasn't a phone company. It started as a computer company and it changed the world. I don't know whether to shutter or applaud when Tesla makes a pronouncement.
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