Tesla Worth More Than Facebook

Market cap

After hours trading in Tesla (TSLA) shares ended at $752.90. So now Tesla is worth more than Facebook (FB), including the effect of employee options. But Facebook is earning a lot of money, is still growing and its numbers show high earnings quality. It is a wide moat business. So very much unlike a car manufacturer who is losing market share in Europe and soon also in the US and China.

Allegedly games with short-term out of the money call options have pushed the stock further up.

Deliveries

Tesla just missed its delivery target of 500,000 cars for 2020. Usually Tesla releases such numbers during week days but now the filing was on a Saturday.

Couldn't they deliver 450 cars more? That is a legitimate question also because Tesla registered so many cars on its own name in Norway and Sweden. See here and here. I suppose the auditor did not approve counting these cars as deliveries. However I am not sure because the auditor has also accepted Tesla's ultralow warranty reservations.

Several people claim model 3 sales declined with a large percentage in 2020, maybe even 40%, in the US. These numbers are based on information from reliable or official sources: see here and here.

Signs of financial distress

Here is a tweet about Tesla not paying for electrical equipment it allegedly damaged in 2017. Here is a tweet about Tesla refusing to pay bills in South Korea. Here is a story about a car that might have been sold twice.

Why is the company doing this with so much cash on its balance sheet?

Quality issues

Again a post about a sudden unintended acceleration event in the US. See also here. Allegedly Tesla took the car back and exported it to the Ukraine. Here is a tweet about a spontaneously shattered window. And here is a tweet about a Tesla driver claiming to have been locked out of his car with the front wheel spinning.

Bottom line

Tesla shares are a bubble. The company manufacturers low quality cars and provides poor service. The repeating signs of financial distress are a red flag. The company faces lots of competition in Europe and very soon also in the US and China. After the model Y I do not think the company has any tricks left to increase deliveries.

There is no reason why this company should be worth so much more than Toyota (TM), General Motors (GM) or Ford (F). There is no reason why the company should be worth more than a wide moat business such as Facebook (FB).

This will not end well. My opinion is still: strong sell.

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