Yes, that would be the punishment. It's also why Elon is irreplaceable. You might think the long-term health of Tesla would be well served by leadership that would build on the remarkable initial success of creating a viable mass market electric car company. As many on the thread pointed out, there are many plausible ways to formulate a product that would do exactly that.
But that would be a massacre of shareholder value. One more quarter of a ridonculous valuation is worth more than having a product that will keep Tesla viable as a car company. The idea that Grok could become a first tier AI product is more valuable than a mass market SUV, because that untested idea keeps the share price up.
Until it doesn't. If you can predict the day that happens, I want to subscribe to your newsletter.
There was an HN post recently about “startup anti-patterns” [0]. And the broad takeaway was that most failures stem from preventing facts on the ground from reaching you, i.e., the company plows ahead with a strategy that misses or actively ignores countervailing data.
I'm arguing that the fair value of boring companies making reliable things should be much higher. We don't do that, you have to promise hot air based growth to prevent your valuation from crashing.
> I'm arguing that the fair value of boring companies making reliable things should be much higher.
In theory (occasionally in practice) when you purchase a stock you are purchasing a piece of the future cash flow of that company. For a company which operates in a known environment and we can roughly predict how their revenue will grow (i.e. boring companies), the correct fair value of the stock can be easily computed.
So, no, those predictable companies should not be valued much higher, they are already valued correctly because the are no big surprises in their future, the profits and revenue are predictable.
This logic breaks down with companies where the growth can't be predicted to any reasonable accuracy. So in those you're just buying the hype, which sometimes turns out to be real, sometimes not.
Unfortunately this also incentivizes some companies to pump themselves purely on hype so they never get valued on actual revenue and profit. Tesla is a prime example of this. If you value them as a car company we can easily compute a fair value, but that number is very low. So, instead, robots! AI! self-driving! Space! That keeps the fair value an unknown, so it can ride the wave of hype for a long time.
Starship and Starlink are prerequisites for the silly Starmind, so I don't think they'll quite as badly destroy their core competency as they are doing at Tesla.
which is the philsophical/moral point of view which asks: If you had to randomly be born in anywhere in the world, how would you prefer the world work?
Very few people would choose the one where there's a slight chance they're in the wealth classes currently.
Not moving towards equality is just a selfish choicel.
What's funny is that nobody even believes the SpaceX/Tesla fever dream stuff - not even the fanboys. Data centers in space that violate the laws of logistics+thermodynamics? 30 trillion dollars worth of revenue?
No, they only believe that somebody else believes this shit. The entire valuation of Elon's companies is based on greater fool theory. But it notably is called greater fool, not infinite fool; we are going to run out of fools at some point...
Shorting it would only make sense if you believe the stock value is at all correlated to the technical feasibility of the long term vision. I think the entire point of the person you're responding to is that it's fairly obviously not.
I'd love to know what their actual plan is, the one they hope will allow them to manage a soft landing rather than a sudden crash when the music stops.
I mean, they must have one and it must be at least minimally plausible - otherwise the regulatory authorities would have stepped in long before things got to this stage... right?
They want to be valued as a ~~scifi~~ tech company.
Which is fair, given that the market (and by extension we) chose to brutally punish boring car companies that make reliable high volume cars.