The Term 'Tesla Killers' Is Dead: OEM Struggles Prove Tesla's Worth
02-03-20, 12:20 PM
#47
Go re-read my prior post. I said If Apple were to buy Tesla, it would have to pay its market cap PLUS AN ACQUISITION PREMIUM. A company's value is based on market cap but when another company buys the public company it's assumed that there is a synergy for the buyer so the selling company negotiates a higher value so they too can benefit from the value of the synergy. A company never sells for less than the market cap! You are now reinforcing the fact that Tesla is worth more should it sell to another company 
Many M&A professionals (yes including me) do this for a living. Most shares are not owned by regular people. They are owned by giant mutual funds / hedge funds/ founders etc. you negotiate the price through mgmt and board of directors, and if they approve (they represent shareholders) there is a process get all shares sold. Again, you really seem to have no clue on how finance and M&As work.
Many M&A professionals (yes including me) do this for a living. Most shares are not owned by regular people. They are owned by giant mutual funds / hedge funds/ founders etc. you negotiate the price through mgmt and board of directors, and if they approve (they represent shareholders) there is a process get all shares sold. Again, you really seem to have no clue on how finance and M&As work.
https://www.ruleoneinvesting.com/blo...s-equal-value/
Analysts will tell you that market cap tells you what a business is really worth or the “true value”. That’s simply not true, because market cap only gives you a piece of the story. It’s very important to understand that the price of a stock is not necessarily the value of a company.
Price is what you pay for something, but VALUE is what you get.
Let’s say you go out and buy a new Maserati, we’ll say that the value of the car is $100,000. If I paid $200,000 dollars for the car, it doesn’t mean that it’s worth $200,000. That’s just what I paid for the car. I massively overpaid for it.
Now, on the other hand, if I paid $50,000 for it, it also doesn’t mean that it’s worth $50,000. That’s just what I paid.
What’s really important to understand about stock investing in the public market is that market cap is just what we pay. What we need to know, this is how it relates to Rule #1 Investing, is what the company is worth. What is the company’s value?
If we see that the company [equity] is worth more than the market cap has it priced at, then we know that we’re essentially buying a $10 bill, for $5 bucks.
The market cap is the big mistake that people and investors make in assuming that whatever the market is charging for a company, is what it’s worth.
A lot of people [like Ezz] say that market cap is the value of the business. In fact, that is so commonly done that professors at some of the best universities in the country have made this mistake over and over again by assuming that what the market price is of a business is what the business is worth.
Warren Buffett says that, “Nothing is further from the truth.”
When you understand that about market capitalization and value, you’ve just taken your first major step to becoming a really great investor.
Remember that market cap is a reflection of what we would pay today to own a piece of the company. But this price is not the true value of the business [it's just a stockmarket price]. If we make market cap the only metric to determine whether or not we invest, we are letting the market price of the business tell us what the business is worth, instead of using all of the data available to a Rule #1 investor.
.
Last edited by peteharvey; 02-03-20 at 12:24 PM.
02-03-20, 12:31 PM
#48
Lexus Fanatic
All I can say is 99% of the self professed experts have been radically wrong and I am confident they will continue their streak of dismal failure.
02-03-20, 12:58 PM
#49
Lexus Test Driver
Thread Starter
Some tips for you Ezz:
https://www.ruleoneinvesting.com/blo...s-equal-value/
Analysts will tell you that market cap tells you what a business is really worth or the “true value”. That’s simply not true, because market cap only gives you a piece of the story. It’s very important to understand that the price of a stock is not necessarily the value of a company.
Price is what you pay for something, but VALUE is what you get.
Let’s say you go out and buy a new Maserati, we’ll say that the value of the car is $100,000. If I paid $200,000 dollars for the car, it doesn’t mean that it’s worth $200,000. That’s just what I paid for the car. I massively overpaid for it.
Now, on the other hand, if I paid $50,000 for it, it also doesn’t mean that it’s worth $50,000. That’s just what I paid.
What’s really important to understand about stock investing in the public market is that market cap is just what we pay. What we need to know, this is how it relates to Rule #1 Investing, is what the company is worth. What is the company’s value?
If we see that the company [equity] is worth more than the market cap has it priced at, then we know that we’re essentially buying a $10 bill, for $5 bucks.
The market cap is the big mistake that people and investors make in assuming that whatever the market is charging for a company, is what it’s worth.
A lot of people [like Ezz] say that market cap is the value of the business. In fact, that is so commonly done that professors at some of the best universities in the country have made this mistake over and over again by assuming that what the market price is of a business is what the business is worth.
Warren Buffett says that, “Nothing is further from the truth.”
When you understand that about market capitalization and value, you’ve just taken your first major step to becoming a really great investor.
Remember that market cap is a reflection of what we would pay today to own a piece of the company. But this price is not the true value of the business [it's just a stockmarket price]. If we make market cap the only metric to determine whether or not we invest, we are letting the market price of the business tell us what the business is worth, instead of using all of the data available to a Rule #1 investor.
.
https://www.ruleoneinvesting.com/blo...s-equal-value/
Analysts will tell you that market cap tells you what a business is really worth or the “true value”. That’s simply not true, because market cap only gives you a piece of the story. It’s very important to understand that the price of a stock is not necessarily the value of a company.
Price is what you pay for something, but VALUE is what you get.
Let’s say you go out and buy a new Maserati, we’ll say that the value of the car is $100,000. If I paid $200,000 dollars for the car, it doesn’t mean that it’s worth $200,000. That’s just what I paid for the car. I massively overpaid for it.
Now, on the other hand, if I paid $50,000 for it, it also doesn’t mean that it’s worth $50,000. That’s just what I paid.
What’s really important to understand about stock investing in the public market is that market cap is just what we pay. What we need to know, this is how it relates to Rule #1 Investing, is what the company is worth. What is the company’s value?
If we see that the company [equity] is worth more than the market cap has it priced at, then we know that we’re essentially buying a $10 bill, for $5 bucks.
The market cap is the big mistake that people and investors make in assuming that whatever the market is charging for a company, is what it’s worth.
A lot of people [like Ezz] say that market cap is the value of the business. In fact, that is so commonly done that professors at some of the best universities in the country have made this mistake over and over again by assuming that what the market price is of a business is what the business is worth.
Warren Buffett says that, “Nothing is further from the truth.”
When you understand that about market capitalization and value, you’ve just taken your first major step to becoming a really great investor.
Remember that market cap is a reflection of what we would pay today to own a piece of the company. But this price is not the true value of the business [it's just a stockmarket price]. If we make market cap the only metric to determine whether or not we invest, we are letting the market price of the business tell us what the business is worth, instead of using all of the data available to a Rule #1 investor.
.
02-03-20, 01:27 PM
#51
I'm not talking about an individual investor valuing the stock. I'm saying, if you were a Trillionaire and wanted to buy all of Tesla, the purchase price of the company is the market cap PLUS the acquisition premium. YOU may not think its worth it but the price and VALUE has been set by the MARKET. If Apple really really really wanted to buy Tesla today, they would have to buy it at the current market value (which is set by stock price) PLUS an acquisition premium (which is negotiated by the mgmt and BoD). Its the way markets work.
Overvalued means that it is priced more than it is worth in a puny $6.61 Billion dollars in equity.
02-03-20, 01:35 PM
#52
Lexus Fanatic
Sep 18 2018
Tesla is ‘headed for the graveyard,’ predicts former GM exec Bob Lutz
"in two years we'll see a movie called "who killed Tesla"
Bob Lutz is the biggest clown I think I've ever seen in the auto sector he let jealously and emotion severely cloud his judgment. The most egregious thing he says is Tesla has no technological advantage he predicted the big auto makers will quickly swoop in and best Tesla in tech, especially range. I wonder what he'd have to say about Tesla now.
Tesla is ‘headed for the graveyard,’ predicts former GM exec Bob Lutz
"in two years we'll see a movie called "who killed Tesla"
Bob Lutz is the biggest clown I think I've ever seen in the auto sector he let jealously and emotion severely cloud his judgment. The most egregious thing he says is Tesla has no technological advantage he predicted the big auto makers will quickly swoop in and best Tesla in tech, especially range. I wonder what he'd have to say about Tesla now.
02-03-20, 02:21 PM
#53
Lexus Test Driver
Thread Starter
Originally Posted by peteharvey
And there's a 99.999% chance that will never happen, because Apple is smart enough to know that Tesla shares are overvalued in a bull market.
Overvalued means that it is priced more than it is worth in a puny $6.61 Billion dollars in equity.
Overvalued means that it is priced more than it is worth in a puny $6.61 Billion dollars in equity.
02-03-20, 07:35 PM
#54
Again, you bring up balance sheet equity! It has no basis on valuation. How many times do I have to reiterate this. I'm saying if any company bought Tesla that's the price they'd pay. Your prior explanation of company and enterprise value is completely wrong. I don't even know where you get that stuff. I'm clarifying how companies get valued in the market. That's all.
Market Capitalisation and Enterprise Value are stock market values determined by the value of shares.
The ratio between market caps & enterprise value to equity indicates if the stock is under/overvalued.
Toyota's equity is about $183 billion, while its market caps is about $200 billion.
Tesla's equity is only around $6.61 billion, while its market caps is over $100 billion; here Teslas shares are said to be overvalued.
Stockmarket analysts use these financial parameters to buy/sell shares.
.
Last edited by peteharvey; 02-03-20 at 07:48 PM.
02-03-20, 07:45 PM
#55
Lexus Fanatic
Sep 18 2018
Tesla is ‘headed for the graveyard,’ predicts former GM exec Bob Lutz
"in two years we'll see a movie called "who killed Tesla"
Bob Lutz is the biggest clown I think I've ever seen in the auto sector he let jealously and emotion severely cloud his judgment. The most egregious thing he says is Tesla has no technological advantage he predicted the big auto makers will quickly swoop in and best Tesla in tech, especially range. I wonder what he'd have to say about Tesla now.
Tesla is ‘headed for the graveyard,’ predicts former GM exec Bob Lutz
"in two years we'll see a movie called "who killed Tesla"
Bob Lutz is the biggest clown I think I've ever seen in the auto sector he let jealously and emotion severely cloud his judgment. The most egregious thing he says is Tesla has no technological advantage he predicted the big auto makers will quickly swoop in and best Tesla in tech, especially range. I wonder what he'd have to say about Tesla now.
The Model 3 is basically what made the company a success. If it wasn't for that, yes, Tesla would probably be today where Lutz said they were going to be.
02-03-20, 08:21 PM
#56
Lexus Test Driver
Thread Starter
Originally Posted by peteharvey
Come on now Ezz, I did not invent the term "equity" - it is the total value of land, building, plant, equipment, machinery, assets and cash etc, less liabilities.
Market Capitalisation and Enterprise Value are stock market values determined by the value of shares.
The ratio between market caps & enterprise value to equity indicates if the stock is under/overvalued.
Toyota's equity is about $183 billion, while its market caps is about $200 billion.
Tesla's equity is only around $6.61 billion, while its market caps is over $100 billion; here Teslas shares are said to be overvalued.
Stockmarket analysts use these financial parameters to buy/sell shares.
.
Market Capitalisation and Enterprise Value are stock market values determined by the value of shares.
The ratio between market caps & enterprise value to equity indicates if the stock is under/overvalued.
Toyota's equity is about $183 billion, while its market caps is about $200 billion.
Tesla's equity is only around $6.61 billion, while its market caps is over $100 billion; here Teslas shares are said to be overvalued.
Stockmarket analysts use these financial parameters to buy/sell shares.
.
02-03-20, 08:29 PM
#57
Lexus Fanatic
Are you suggesting Lutz thought the S and X would be Tesla's only models for eternity? If Bob Lutz thought that he's an even bigger idiot than I thought. I don't believe Lutz thought that at all his predictions that Tesla would fail was all about wish fulfillment similar to what we've seen from various media outlets and self professed financial experts.
02-03-20, 08:34 PM
#58
Lexus Test Driver
Thread Starter
Originally Posted by Lexus2000
Are you suggesting Lutz thought the S and X would be Tesla's only models for eternity? If Bob Lutz thought that he's an even bigger idiot than I thought. I don't believe Lutz thought that at all his predictions that Tesla would fail was all about wish fulfillment similar to what we've seen from various media outlets and self professed financial experts.
02-03-20, 08:47 PM
#59
Lexus Fanatic
02-04-20, 05:45 AM
#60
Another surge seems to be in store today. Is it trying to serve Toyota a warning and test their market capitalization?
Wow. $900 mark might get taken out today. Pigs may be getting slaughtered. What's stopping it from cracking $1000 while the trading volume is strong? (47 million shares exchanged yesterday).
Those 26 million shares short are getting exposed to major losses. Apple's short % is around 1% of shares available. Tesla? Short % of Shares Outstanding (Jan 15, 2020) 13.84%
The stock action is just drawing the global momentum players (not investors) who are in it for a buck, fifty or hundred if it keeps rising like this. It is the investors who were patiently in it for the past 3 years that are being rewarded, including the $1billion mega buy by Larry Ellison last summer.
Wow. $900 mark might get taken out today. Pigs may be getting slaughtered. What's stopping it from cracking $1000 while the trading volume is strong? (47 million shares exchanged yesterday).
Those 26 million shares short are getting exposed to major losses. Apple's short % is around 1% of shares available. Tesla? Short % of Shares Outstanding (Jan 15, 2020) 13.84%
The stock action is just drawing the global momentum players (not investors) who are in it for a buck, fifty or hundred if it keeps rising like this. It is the investors who were patiently in it for the past 3 years that are being rewarded, including the $1billion mega buy by Larry Ellison last summer.