Shorting Tesla is Pure Stupidity: Don't Bet Against the Cult of Elon

Why betting against $TSLA & Elon Musk rarely pays off

Tesla is in the upper echelon of elite, innovative companies and spearheaded by arguably the most effective CEO of all-time (Elon Musk).

Most investors place bets on Tesla as a result of: (1) future growth potential (e.g. FSD, Dojo, Optimus, Powerwall & Megapack growth), etc. and (2) Elon Musk (G.O.A.T. CEO).

For these reasons, Tesla (TSLA) always trades at a premium (ranging from moderate to insane) relative to its actual revenue, profits, and core business operations.

As of November 18, 2024 - Tesla’s market cap is ~$1.07T, which is higher than the market cap of all U.S. car companies combined.

Tesla is also worth more than the next 15 largest global car companies combined - including Toyota, BYD, Ferrari, GM, Xiaomi, Mercedes-Benz, Porsche, Volkswagen, BMW, Ford, Honda, et al.

Based on recent data from Tesla’s 2024 Q3 10Q and simple valuation metrics in early November 2024, Tesla shows signs of clear overvaluation relative to both automakers and big tech companies - reflected in the following:

• P/E ratio: 92.42 (auto avg: 10-15, big tech: 30-35)

• P/S ratio: 11.49 (auto avg: ~1.5, big tech: 8-10)

• P/B ratio: 16.05 (auto avg: 1-3)

• PEG ratio: 9.78 (auto avg: 0.3-5, big tech: 1.5-3)

• EV/EBITDA: 83.32 (auto avg: 5-10, big tech: 15-30)

Note: These figures were collected post-2024 election.

Even if we assume things like FSD, Dojo, Optimus, etc. will become wildly successful in terms of TAM expansion for Tesla - much of Tesla’s future growth across these segments is already priced in (can estimate sales, profits, etc.).

That said, it still remains a completely braindead idea to short Tesla stock.