So, A Bad Thing Happened
Last night, after market close, Tesla did its earnings call. It was, by any standard, a disaster. Not only was it not good, but it was a miss across the board.
Earnings fell 55% in the first quarter, and quarterly sales declined year-over-year for the first time in nearly four years. -- Wall Street Journal
The earnings themselves were atrocious. Tesla, which as recently as the beginning of last year was predicting 50% growth as far as the eye could see, sold fewer cars during the previous three months than during the same period in 2023. Tesla demand seems to have reached its limit; it’s now making far more vehicles than it can sell. --Bloomberg
And That's FANTASTIC!
But Elon casually, and rather vaguely, did a class Muskism and announced that Tesla was not, in fact, CANCELLING the cheap Tesla program, but "accelerating" it.
And, what happened? The stock popped about 20 points.
Wait, what? Yes, after a dismal earnings report including misses across the board and against the backdrop of a market drying up, TSLA actually rose double-digit percent. Billions of dollars of market cap.
We Might Release Them Tomorrow or Never
The problem is that demand has "reached its limit." So, Musk, contrary to a credible report from Reuters that Tesla had actually canceled the Model 2 (Cheap Tesla) program, made only a vague comment about:
new vehicles, including more affordable models
Oh, tell us more! That's interesting!
We've said all we will on that front.
So, no. And also, AI. And robotics. Stop talking, or I'll leave.
Well, when?
by early 2025, if not late this year
Says guy who said you could summon your car from New York to LA from your phone in two years, about eight years ago now.
A Whole Market of Them Born Every Minute
The price rose and barely moved. Now, the reality is that the stock is still down over 30 days and YTD. By a lot. But the sheer absurdity of this reaction says one of two things to me:
- Investors are the most gullible lemmings to ever wander over a cliff edge. Humans are just incredibly stupid.
- The stock market is so manipulated (primarily by options interests) that logical certainty is the prime target of the financial crime family that controls our markets.
I'm going for that second thing. Musk is like Trump (in a lot of ways), but primarily for this discussion in that he acts as a magnet for passionate people on both sides of an argument. Interest means trades. Trades means money flowing. Money flowing means options premiums and commissions and the ability to do the opposite of what makes sense by manipulating the market.
The Lesson
Don't know. It's sad to me that this is the state of American business. As our wealth disparity increases, the leverage accumulates in the hands of people like Musk. No one wants to contradict an obscenely rich man in case he lets them pick up any gold doubloons that fall out of his pockets.
Long ago, I learned never to go in against a Sicilian when death in on the line. The sociological and economic implications of such inconceivable events fascinate me, though.