Elon Musk takes over Twitter

The stock trades at 33, 34 times earning still. What galls me about the company most is that it wouldn't have gotten to today where it can earn what it actually does without an insane amount of subsidization, that we have all paid for (and most people don't realize), which also has come at the expense of the rest of the car industry (which has driven up the price of cars generally, another thing people don't realize).

At 34 times earnings. ... consider by contrast that Ford trades at 7 times earnings. GM trades at less than 6 times earnings. Toyota trades at 9 times earnings. BMW trades at less than 3 times earning. Give Tesla a multiple more in line with an um car company (not a multiple based on ridiculous hype that doesn't translate to earnings), and Tesla stock should go much lower than this. At 10 times earnings (which is still slightly expensive) it's maybe a $40 stock.

I don't know what people expect, though. ... There was a thread on here about EVs that turned into a Tesla thread, and I kept pointing out that during an insane monetary bubble that was engineered over more than a decade, it was creating distortions all around us. Tesla went something like 13 years in which it lost a huge amount of money and was burning through billions upon billions of dollars. The company should have never made it to today, except in that manipulated environment it was carried along at others' expense. One of the places those billions of dollars that he burned through came from was from him using his overhyped, mania-like stock as a piggy bank to raise money. So he kept diluting equity in the company, by issuing MORE stock. When a company does that, it should devalue the stock -- there are more shares out there, so each share should be worth less. But in the artificial, cheap money environment he rode, it had the exact opposite effect. The stock price kept going up, even as he kept diluting the stock.

What is happening today is that artificiality coming out of the stock. ... and it still has a long way to go. There is still a lot of the effects of monetary inflation still sloshing around, which is propping up the stock. Even as they have removed some of the liquidity (with higher rates and stopping of buying debt with quantitative easing), but financial conditions are still very loose. If they continue, Tesla's stock should go down way more than it has. If they reverse (because of the economic pain we are all going to feel soon), maybe they can create more distortions that rewards failure (like he has been rewarded).