Sunday , October 17 2021

Investors are not discouraged by Musk's absurdity.



Despite all his troubles as the most ridiculed and penalized executive in the world (the Washington Post called it a "double fiasco" on Thanksgiving for "a wholly absurd tweet in August" that made the Stock Exchange and values ​​will remove the position of chairman and order a personal fine of $ 20 million), Elon Musk generated a 7% gain for shareholders in 2018.

Shares of automakers in China, France, Germany, India, Japan, South Korea and the United States fell to 36% in the worst year for stocks since 2011 amid slowing global growth. Only one of the 10 most valuable automotive companies in the world is setting sales records and outperforming the stock market. That would be Tesla Inc., which shows that the future with zero emissions works.

Despite all his troubles as the most ridiculed and penalized executive in the world (the Washington Post called it a "double fiasco" on Thanksgiving for "a wholly absurd tweet in August" that made the Stock Exchange and values ​​will take the position of chairman of the board and order payment of a personal fine of $ 20 million), Elon Musk generated a 7 percent profit for shareholders in 2018. Meanwhile, is the top-selling car in the US in terms of income, and the six-year Model S BEV is still number one in customer loyalty. The company even released a profitable third quarter in October, the third period with positive numbers in its history.

How is the rest of the industry still extremely committed to fossil fuels? Daimler AG, the parent company of Mercedes, lost a third of its value. Porsche Automobil Holding SE decreased by 23%. BMW AG, which promotes its product as "the best machine to drive", impoverished its shareholders by 17%. Even Toyota Motor Corp., the No. 1 global, which leaves the popular Prius hybrid for the Lexus luxury line, fell 3%. All the giants, including General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles SA, posted a small increase in sales over the last five years, one of the main reasons they are also losers to investors.

Hardly a day passes without a lean appreciation of Tesla's actions. Except no one's done it yet. That's why Tesla became the # 3 market capitalization among the top 20 automakers, with a total return (income plus appreciation) that leaves the few that increased in the year when the industry average was a loss of 13 %. According to data compiled by Bloomberg, Tesla also generated the highest risk-adjusted return, which is how the market says Tesla investors received the most compensation for price fluctuations.

Over the past five years, Tesla's market capitalization has almost quadrupled, comfortably outperforming Fiat Chrysler (2.2 times), GM (down 13%) and Ford (down 44%), while Tesla's sales exploded (6 times). According to Bloomberg data, Fiat Chrysler and Ford revenues increased 9% and 7%, respectively, and GM's revenues decreased 6%. Tesla's 82% growth in sales made it the # 1 of 40 companies in the Bloomberg Intelligence assessment group in 2018, and 26 analysts surveyed by Bloomberg predict Tesla will lead the industry again in 2019 (38 percent) and 2020 (20 percent).

Tesla's relationship with its shareholders is equally exceptional in the light of endless press reports that the company "burns money." The $ 11 billion invested by Tesla's mutual funds represents 1.2% of its assets. That commitment is substantially greater than 0.7 percent of the assets of 298 funds that invest $ 7.7 billion in GMOs, according to data compiled by Bloomberg. The same 159 funds investing in Tesla generated a risk-adjusted return of 1.9% in the last three years, easily surpassing the 1.5% of the 472 mutual funds that have a stake in other US automakers. ., according to the data.

For some of these mutual funds, Tesla has been the gift that continues to bear fruit. The $ 5 billion global tech fund, T. Rowe Price, has produced a total return of 120% over the last five years, the best of a group of 367 funds. Since fund manager Joshua Spencer took over in 2012, Tesla's weight in the fund has risen from zero to 8.5%, according to public data for September.

Tesla remains the favorite target of short sellers led by Jim Chanos, who use stock sales that they do not have to capitalize on expected price declines. Tesla's share in shares outstanding in relation to total tradable shares was 22% higher than any of the S & P 500 companies. But short sellers remain frustrated with the company's current resilience and relationship . The short-term interest rate is a 70% shadow that welcomed the company when it opened the capital eight years ago.

"Elon Musk has made such a huge character of himself that people, myself included, have begun to forget about the underlying business," said Andrew Left, one of Citron Research's top sellers on Bloomberg TV in October. "It's a revolution that I really underestimated, the way people are buying these cars."

On the left, who predicted that Tesla would fall to $ 100 per share by the end of the year, from the current $ 332, became an enthusiast two months ago. It was then that he wrote: "Although the media focused on Elon Musk's eccentric, extravagant and sometimes offensive behavior, they did not notice the legitimate disruption in the auto industry." While all focus on smoking Elon grass, it has silently smoked the entire automotive industry. "

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