Thread by @doctorow

Elon Musk is the richest man on Earth and $TSLA is worth more than a trillion dollars. What the fuck is going on? In @RobinWigg's phrase: it's the #TeslaFinancialComplex at work:

ft.com/content/17f0cd… 1/

If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2021/11/24/no-… 2/

What's a "Tesla-financial complex?" Well, Tesla is only tertiarily a car-maker (which may explain why the company is so indifferent to QA for its vehicles and the safety of its workers). 3/

Its primary product is financial instruments (its secondary product is an army of creepy cultists).

For example, Tesla mints an astounding number of carbon credits that are primarily consumed by car companies that make gas-guzzling SUVs. 4/

Without those SUVs, the company's financials would be much, much worse:

yahoo.com/now/tesla-gain… 5/

But that's just table-stakes. As Wigglesworth writes, the real secret to Tesla's valuation is "the swelling size and hyperactivity of Tesla 'options.'" 6/

These options create incredible volatility for Tesla and have reversed the traditional relationship between options and shares, with option prices driving up share-prices. 7/

Tesla is the original meme-stock, and it depends on meme investors, like the redditors who follow billionaire Leo KoGuan's massive position in the company. And as with any meme-driven phenomenon, there's a procession of companies riding the fad. 8/

For example, Nikola, a fraud company that pretends to make electric trucks, is still worth $5.4b even after it had to set aside $125m to settle its fraud fines. Rivian, a company that has barely made any vehicles, is valued at $110b. 9/

Over on @NakedCapitalism, @YvesSmith and her commentators do an excellent job of analyzing Wigglesworth's piece:

nakedcapitalism.com/2021/11/the-te… 10/

Here's the kicker: "It goes without saying that Tesla is overvalued, but a stock being overvalued is no barrier to it becoming even more overvalued...At some point the gig will be up and Tesla will be valued like a car company. But don’t ask me to make book as to when." 11/

Is Tesla really overvalued? Hell yes. Back in January, its valuation was 1600x its profitability:

pluralistic.net/2021/01/15/hoo…

Can Tesla increase its earnings 1600-fold and justify that valuation. Nope. The thing is, geometry has a well-known anti-Tesla bias. 12/

We can't save our cities by replacing individuals in fossil-fuel cars with individuals in EVs. 13/

When you multiply the space a car occupies by the number of cars that requires by the distance that commutes expand by when you build those roads, you end up needing even *more* cars. 14/

The answer is, of course, mass transit, something Elon Musk is violently allergic to ("there’s like a bunch of random strangers, one of who might be a serial killer" -E. Musk, 2017). 15/

This despite the fact that the greatest cities in the world are places "where the rich use public transportation."

metropolisjapan.com/why-tokyo-work… 16/

Musk's personal reality-distortion field might be able to gin up billions out of ethereal complex financial instruments. But cities are material things, governed by unforgiving, bullshit-resistant laws of physical space. 17/

No amount of Twitter shitposting will fit more cars into the same space.

I mean, if you're going to believe in any kind of overvalued, overhyped personal transport, it should probably be e-bikes. 18/

"City governments should purchase an electronic bicycle for every resident over the age of 15 who wants one [and] shut down a significant number of streets to be used only by bicycles."

nytimes.com/2021/11/22/opi… 19/

Image:
Heisenberg Media (modified)
commons.wikimedia.org/wiki/File:Elon…

Steve Jurvetson (modified)
commons.wikimedia.org/wiki/File:Tesl…

CC BY 2.0:
creativecommons.org/licenses/by/2.… 20/