Tesla Crashes and TSLA Crashes
Welcome to the Schmoozeletter Blog. Your source for weekly water cooler wisecracks from the world of finance. If you have an opinion different than mine or a topic you want to hear about, let me know!
This week, the market rips higher on solid unemployment numbers from Friday morning. Low unemployment is good for the economy, but it does mean we’re less likely to see interest rates come down.
That is bad news for the Covfefe-In-Chief who is pushing for a big, beautiful increase to the budget deficit. The public isn’t happy and you know what happens when his policy does something the people don’t like:
It’s presidential blame game time!
Trump once again fired the culpability cannons at the chairman of the Federal Reserve, Jerome Powell, desperately pleading in all caps for the interest “RATE” to be CUT.
But if there are two people you absolutely cannot force to perform their jobs against how they see fit, it’s Daddy Powell and NBA analyst Charles Barkley.
Trump had more bad PR this week as he very publicly broke up with his personal piggy bank, Elon Musk.
Musk told everyone Trump’s on the Epstein list and froze a $100M donation to a pro-Trump PAC. Trump threatened to cancel Elon’s companies’ government contracts and said Elon has totally lost it. Just your classic back and forth between the world’s richest man and the leader of the free world.
Who would have thought these two incredibly thin-skinned narcissists who constantly get in spats on social media would get into such an embarrassing online breakup?
Oh, everyone. That’s right.
But the wreck of a relationship between the couple formerly known as Mrump isn’t the only crash Elon needs to worry about. This is:
Tesla Crashes and TSLA Crashes
A self-driving Tesla killed a pedestrian in 2023. The blinding sun caused the human drivers to stop and get out of their cars, but the Tesla kept screaming forward and fatally struck an Arizona woman.
Tesla investors will be quick to say that this was 2023 and it wasn’t the most updated software and blah blah blah. But the bad PR of the newly public vehicular roboslaughter video and the Trump tiff sent TSLA stock tumbling down 15% on the week to $295.
Now, down 15% sounds bad.
But what should the stock price of TSLA be?
What is a reasonable price for the world’s number one cyber cab company that doesn’t have any cyber cabs on the road?
I was racking my brain and finally thought to myself, “What would a high schooler with math homework do?”
Use AI for the answers!
Of course. The youth of today don’t need to think or problem-solve anymore. They let the corporate-owned, data-starved, morally ambiguous chatbots of the internet do that for them!
So I turned to Elon Musk’s very own AI chatbot, Grok:
Grok says if priced like an average company based on its fundamentals, the stock price range is $50 to $55.
But it’s got those high growth expectations!
Let’s say TSLA can grow twice as fast.
Grok says if priced at double the valuation of an average company based on its fundamentals, the stock price range is $96 to $109.
But that is just any old average company. Or double any old average company.
How does TSLA compare to big tech?
Grok says if priced like other big tech companies, the stock price range is $57 to $68.
Once again, Grok is sure to point out those high growth expectations.
How is TSLA expected to grow again?
Grok is so modest.
Bare minimum, TSLA will grow earnings at 24% annually. No way it doesn’t.
Say an autonomous driver mows down a few more pedestrians. No way that’ll deter demand.
Alright, let’s take the bare minimum case here of 24% annual growth and say TSLA gets valued like the other leading tech companies.
Grok says if TSLA sees five years of 24% annual earnings growth and is priced like other big tech companies, the range in five years is $148 to $233. The current price is $295.
Not great, Elon.
I wonder if there are any better options out there.
I wonder if there are any companies who own cyber cabs that haven’t murdered anyone and that do have cabs on the road. Maybe that are even trading at reasonable valuations.
Interesting…
Final Thought
Don’t feel bad for Elon. If this whole paying-to-run-America thing doesn’t work out, he can just try Russia next.
