“Because of shorting Tesla stocks, Wall Street billionaires have become millionaires.” This reality, which sounds like a paragraph, is happening to Tesla’s famous short-seller David Einhorn.In the past two weeks, Tesla’s stock price has risen and fallen sharply. From January 31 to the present, Tesla’s stock price has risen from $ 650 to $ 800, once hitting $ 1,000. There is no doubt that this company has become the largest on Wall Street.Casino.The price has risen and fallen, and even Charlie Munger has begun to stand at the table and comment cautiously: “I will never buy but I will not short.” “Musk is a special person and he may be overestimatingHimself, but he can’t always be wrong. “Is Tesla overrated?Even if the company’s performance is satisfactory, it cannot maintain such a high stock price, which seems to be the consensus of the mainstream media.”Even Musk is a fund manager, he will short this stock.” Citron Research, a short-selling agency, once said.But others firmly believe that Tesla will become the next Apple to support the stock price by serving.If Apple’s trillion-dollar market value cannot be explained by mobile phone companies, then Tesla cannot be valued by manufacturing.No matter who laughs to the end, the other side of the bet will see the huge wealth turn into a bubble, making the outcome of this game still worth looking forward to.Who triggered the signal that Tesla’s stock price soared began with the Four Seasons report issued by Tesla on January 31: the actual delivery of electric vehicles in the quarter was 112,000, the annual delivery was 367,000, and the annual delivery was 360,000.To the goal of 400,000 vehicles.In addition, Tesla’s free cash flow in the fourth quarter was US $ 1.01 billion, far exceeding market expectations of US $ 429.5 million, showing an amazing growth rate.If it was just a beautiful financial report, it would obviously not be enough for Tesla to climb from $ 600 to $ 1,000 in “irrational” stock prices within a few days.You know, before that, from $ 200 to $ 800, it took Tesla half a year.The turning point occurred on February 3, the next trading day after the release of the Four Seasons Report, announcing that the annual delivery target was reached.The sharp rise in the stock price forced the shorts to close their positions, and they had to buy the stocks to return to the bank, and their buying behavior in turn pushed up the stock price, causing more shorts to be forced to close their positions and to cycle.This is called shorting or short selling and is the main reason for Tesla’s stock price soaring.According to S3 Partners statistics, on February 3, the shorts lost $ 2.5 billion in one day, and the cumulative loss since the beginning of the year was $ 8.31 billion, which is three times the full year of 2019.In the US stock market, Tesla is the stock with the most short positions.Among them is David Einhorn, the founder of Greenlight Capital, who was famous for shorting Lehman Brothers and Bear Stearns.He told investors that people’s demand for Tesla has been greatly exaggerated, Tesla’s safety is questionable, and autonomous driving systems are not perfect.Most importantly, he expects that Tesla, like in previous years, will not be able to fulfill its delivery commitments.The trend of Tesla’s stock price and short-sold shares has changed. The picture comes from S3 Partners, but Tesla’s actual delivery volume hit him hard.Eindhorn is considered one of the most costly people.At the end of 2019, Musk had tweeted provocations, saying that the size of Einhorn’s assets under management had fallen from $ 15 billion in 2017 to $ 5 billion. “We sympathize with you.” Another short seller,Wall Street billionaire Michael Novogratz, founder of asset management company Galaxy Digital, believes that Tesla’s market value is inconsistent with its asset situation, and “Tesla’s assets cannot rise to the sky.”But it wasn’t the misjudgement that prompted him to close it, but the pressure to counter market sentiment.”I’m too arrogant. I want to grab the top of the bubble, and I’m beaten up.” He still thinks Tesla’s stock price is too high, but he is no longer short.In front of the bullish Tesla, investors who were already erratic were also forced to stand in line and continue to strengthen the rally.Ross Gerber, president and CEO of California asset management company Gerber Kawasaki, said, “If Tesla’s stock price reaches $ 1,000 and the organization does not hold stock, how can they explain to customers?” On February 13, Tesla releasedAnnual report: China’s market revenue increased by 69.55% year-on-year, and the US market fell slightly by 14.92%. For this reason, Tesla’s stock price rose by 4.78%.Nonetheless, according to the Wall Street Journal, FaceSet data shows that 45% of analysts suggest selling or reducing holdings, and the recommended target price is 35% lower than the current one.But no one wants to bet on when it starts to fall.”This is a battle of honour between a rich man (Musk) and a group of rich people (short). No one can afford to lose,” said a Wall Street hedge fund manager.How far away is the next Apple? One view explains the soaring stock price: Tesla is transforming from auto stocks to tech stocks.People don’t even think it will be the next Apple.Undoubtedly, it is unrealistic to look at Tesla with car stocks.Tesla’s deliveries in 2019 are 3% of Toyota’s, but the market value is in the same order of magnitude as Toyota’s, which is twice that of General Motors + Ford.Even if it is also a new energy vehicle, Tesla’s delivery volume has been comparable to BYD from 2014 to Q1 2019, but its stock price is 6 times that of BYD.But the rebutters believe that Tesla is significantly different from traditional car companies: first, the gross margin is 18% significantly higher than Ford’s 1.8% and GM’s 9.3%, closer to technology companies rather than manufacturing; secondly, Tesla has a largeTechnology accumulation, battery management patents account for about 60% of the total patent, and battery life is the first consideration for consumers to switch to electric vehicles; finally, Tesla ’s Firmware Over-The-Air (FOTA) modeDynamic update software makes Tesla’s depreciation rate much lower than traditional cars.And if Tesla is a technology company, its market value is considered growth, not just the price-earnings ratio.Investors even believe that Tesla has a chance to become the next Apple.Just as Apple is only a mobile phone manufacturer, it will never have a trillion dollar market value.At present, many of Tesla’s profit models are moving closer to service: as of the end of 2019, 1,804 supercharging stations and 15,911 supercharging piles around the world are shifting from the free mode to the charging mode, and using the electricity generated by Tesla Solar SolarRoofThis makes Tesla more like operating a gas station.Tesla has digital value-added services, and can pay real-time traffic data, video and audio and video entertainment for $ 10 a month.This makes it possible for Tesla to provide both itunes on the car and the app store.Tesla has stated that it hopes to launch 1 million self-driving taxis by the end of 2020, and will stop selling cars in the future and switch to leasing and shared mobility services.Although this timetable may be delayed, Tesla is the most advantageous of all car companies, and each of its cars is ready for hardware until software upgrades.Services depend on electric vehicle hardware, and the advantages of electric vehicles depend on technology reserves.Tesla’s R & D expenses accounted for 18% of revenue in 2015, and will gradually decrease to 4.7% by Q4 in 2019, but it has sufficient technical reserves in battery management, energy storage, materials and automated production, and is furtherIndustrialized cost sharing, such as Tesla began to produce cylindrical battery cells.Tesla is one of the opportunities for technology companies to counter rapid growth.But despite much recognition in the model, how Tesla can grow to the scale of Apple is another issue worth considering.As of the end of 2019, Tesla’s free cash flow was $ 1.01 billion.According to statistics from Joseph Spark, an analyst at RBC Capital Markets, among the stocks on the S & P 500 index list, there are only three companies that can grow by 30% for 10 consecutive years, namely Apple, Amazon.And google parent alphabet.In other words, maintaining the current growth rate will be a miracle in itself.According to New York University professor Aswas Damodaran, who is known as the “principal of valuation”, Tesla should have Volkswagen’s revenue scale + Apple’s profit margin if it wants to maintain its $ 900 share price.How long is Tesla from this seemingly impossible miracle?The picture is from unsplash.com.
Focus Analysis | If Musk is a fund manager, will he short Tesla?
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