Elon Musk just lost $4.6 billion on Tesla and SolarCity

[member_xyz]

http://www.theage.com.au/business/elon-musk-just-lost-46billion-on-tesla-and-solarcity-20160210-gmqyjv.html

Tesla shares down 37% for the year (less than 6 weeks).

[Muxr]

Ouch. They may have been overvalued though. Also the market hasn't been kind lately.

[rx8pilot]

He is in an endurance race, the current stock price probably does not scare him. I am confident saying it was over-valued, but they have the right ingredients to become profitable in a reasonable amount of time. At the moment, they are scary to investors since they are burning cash and the revenue has a long lag time.

[Brumby]

Share prices around the world are twitchy at the moment and while there may be an additional concern with those companies, I wouldn't be jumping off the top of the Empire State any time soon.

[mamalala]

http://www.theage.com.au/business/elon-musk-just-lost-46billion-on-tesla-and-solarcity-20160210-gmqyjv.html

Tesla shares down 37% for the year (less than 6 weeks).

Surely you mean "Some arbitrary fantasy number got down by 4.6 somethings", right?

Greetings,

Chris

[coppice]

http://www.theage.com.au/business/elon-musk-just-lost-46billion-on-tesla-and-solarcity-20160210-gmqyjv.html

Tesla shares down 37% for the year (less than 6 weeks).

Surely you mean "Some arbitrary fantasy number got down by 4.6 somethings", right?

Those numbers aren't fantasy for investors with a small holding in a company. They are only a fantasy for those who hold enough that if they start to sell a significant amount, the value of the rest will plummet.

[mamalala]

http://www.theage.com.au/business/elon-musk-just-lost-46billion-on-tesla-and-solarcity-20160210-gmqyjv.html

Tesla shares down 37% for the year (less than 6 weeks).

Surely you mean "Some arbitrary fantasy number got down by 4.6 somethings", right?

Those numbers aren't fantasy for investors with a small holding in a company. They are only a fantasy for those who hold enough that if they start to sell a significant amount, the value of the rest will plummet.

If the numbers would reflect the actual value of physical stuff, then i would agree with your first premise. But that's not how it seems to work. I can open up a shop, put 100k into it, and then issue 1000 shares at 100 bucks each.  Overnight some drug addled wallstreet bozo goes on a frenzy, and suddenly each share is "worth" 200 bucks. But i still have the same stuff, nothing changed. The extra 100k are virtual, non-existant in the real world.

I'd like to see where Musk has lost real 4.6 billion. What is the actual worth of the physical stuff in his fabs? From that substract the profits already made. What is left?

Greetings,

Chris

[coppice]

http://www.theage.com.au/business/elon-musk-just-lost-46billion-on-tesla-and-solarcity-20160210-gmqyjv.html

Tesla shares down 37% for the year (less than 6 weeks).

Surely you mean "Some arbitrary fantasy number got down by 4.6 somethings", right?

Those numbers aren't fantasy for investors with a small holding in a company. They are only a fantasy for those who hold enough that if they start to sell a significant amount, the value of the rest will plummet.

If the numbers would reflect the actual value of physical stuff, then i would agree with your first premise. But that's not how it seems to work. I can open up a shop, put 100k into it, and then issue 1000 shares at 100 bucks each.  Overnight some drug addled wallstreet bozo goes on a frenzy, and suddenly each share is "worth" 200 bucks. But i still have the same stuff, nothing changed. The extra 100k are virtual, non-existant in the real world.

I'd like to see where Musk has lost real 4.6 billion. What is the actual worth of the physical stuff in his fabs? From that substract the profits already made. What is left?

Greetings,

Chris

So you don't think the intangible has value? If so, I guess you think R&D is a waste of money.

[mamalala]

So you don't think the intangible has value? If so, I guess you think R&D is a waste of money.

Uh, of course it has a value. R&D is not a waste. But let's be realistic here. The way it is done currently is way out of proportion. Especially if a lot of leeches (shareholders) have to benefit. Usually people that know nil about the stuf, and are only in for the money. And whats worse, those people can decide the fate of the company. Like, uh, making it go down in 4.6 billion just so.

Greetings,

Chris

[Brumby]

At this point, it's a PAPER loss.  It will only become real if he sells his shares - or the company dies - and that's not going to happen any time soon.

The media will take any opportunity to get eyes on their material and big numbers like this are just ripe for exploitation.

From what I understand, emotional reaction to share market fluctuations cause more troubles for investors than real problems.

[Muxr]

So you don't think the intangible has value? If so, I guess you think R&D is a waste of money.

Uh, of course it has a value. R&D is not a waste. But let's be realistic here. The way it is done currently is way out of proportion. Especially if a lot of leeches (shareholders) have to benefit. Usually people that know nil about the stuf, and are only in for the money. And whats worse, those people can decide the fate of the company. Like, uh, making it go down in 4.6 billion just so.

Greetings,

Chris

The price of stock doesn't really affect the company directly (unless it's IPO). It affects employees who might receive bonuses in stock. And it can also affect the ability of a company to get financing. But for the most part it isn't a huge blow for the company to have its stock plummet like that. Especially not if it's short term.

[Brumby]

Especially not if it's short term.

That's the bit I missed!

[miguelvp]

It's simpler than that.

There is a market worth X, your market share increases to 40 percent of the whole market, you get valued at 40% of the whole market share.

Well this is a over simplified approach, but I hope you get what I mean.

Edit: and yes, long term speculation is part of the valuation as well.

[coppice]

So you don't think the intangible has value? If so, I guess you think R&D is a waste of money.

Uh, of course it has a value. R&D is not a waste. But let's be realistic here. The way it is done currently is way out of proportion. Especially if a lot of leeches (shareholders) have to benefit. Usually people that know nil about the stuf, and are only in for the money. And whats worse, those people can decide the fate of the company. Like, uh, making it go down in 4.6 billion just so.

Intangible things are really really hard to measure. Once you accept that some intangible things have substantial value you are in world where valuations are really hard, and you should expect them to bounce around quite a lot.
Unfortunately, that also means they can be gamed. Does anyone have a way around that? I haven't seen one.

[mamalala]

So you don't think the intangible has value? If so, I guess you think R&D is a waste of money.

Uh, of course it has a value. R&D is not a waste. But let's be realistic here. The way it is done currently is way out of proportion. Especially if a lot of leeches (shareholders) have to benefit. Usually people that know nil about the stuf, and are only in for the money. And whats worse, those people can decide the fate of the company. Like, uh, making it go down in 4.6 billion just so.

Intangible things are really really hard to measure. Once you accept that some intangible things have substantial value you are in world where valuations are really hard, and you should expect them to bounce around quite a lot.
Unfortunately, that also means they can be gamed. Does anyone have a way around that? I haven't seen one.

That's the thing i have a problem with. All that "IP". Given the fact that we have billions of people on this planet, the chance that a _single_ individual comes up with some nifty idea is basically non-existant. Usually a lot of people come up with the same thing. It's just that the idiotically messed up patent system grants stuff to only one. Yes, i know, patents can be challanged. But in reality, Joe Inventor has basically no chance to stand up against Billy Corporate.

Which is to say: Yes, your idea may be worth something. But basing that worth on the assumption that you have been the only one to come with it is just idiotic. You can be sure that many more people came up with the same thing, but either decided it's not worth a patent, or simply couldn't afford it.

So, in some way i don't really recognize the alleged IP value of some company, because the way it is handled is rather stupid. Yes, developing stuff costs money. Having that development done is worth something. However, the fundamental idea of such a development usually is not worth what some drug addled stock brokers make it out to be.

Greetings,

Chris

[Muxr]

I can see why some might call certain share holders leaches. A lot of the investment comes from 401k mutual funds etc and I don't have a problem with that.. but the high frequency traders and day traders do exploit the market for their gain. They don't really care about companies they invest in, their only play is to game the market.

Like microsecond trade machines which react on stocks before anyone is even able to see the change.

[coppice]

That's the thing i have a problem with. All that "IP". Given the fact that we have billions of people on this planet, the chance that a _single_ individual comes up with some nifty idea is basically non-existant. Usually a lot of people come up with the same thing. It's just that the idiotically messed up patent system grants stuff to only one. Yes, i know, patents can be challanged. But in reality, Joe Inventor has basically no chance to stand up against Billy Corporate.

IP that is nothing more than a mere idea that has been patented always gets the headlines. However, most IP is the result of a large team of people, paid for a considerable period, using lots of expensive equipment, who come up with a design that they hope will be competitive in the marketplace. Most of it is not protected by patents, but by copyright, trade secrets, and other means. In an age where many of the most successful electronics companies have no factories, and make nothing themselves, this kind of IP is the basic value of the company.

[Galenbo]

Surely you mean "Some arbitrary fantasy number got down by 4.6 somethings", right?

If the numbers would reflect the actual value of physical stuff, then i would agree with your first premise. But that's not how it seems to work. I can open up a shop, put 100k into it, and then issue 1000 shares at 100 bucks each.  Overnight some drug addled wallstreet bozo goes on a frenzy, and suddenly each share is "worth" 200 bucks. But i still have the same stuff, nothing changed. The extra 100k are virtual, non-existant in the real world.

It's true, that number is fantasy and highly emotional, it's all a greed-panic mechanism behind it.
It doesn't affect the backend of a company directly, but in highly mediatised companies/products like this it's mainly about the frontend.

If for whatever reason the stock value goes to his "real" value, the product will be seen for it's "real" value also, witch means, a 2-tonne vehicle on batteries, like we also had in the sixties. And some batteries acting as storage or UPS, that also existed with vacuum tubes.

Investors, media, goverment money will all go away, that's what's all about, this is their highest concern.

[miguelvp]

And it turns political once again 

[StuUK]

At this point, it's a PAPER loss.  It will only become real if he sells his shares - or the company dies - and that's not going to happen any time soon.

The media will take any opportunity to get eyes on their material and big numbers like this are just ripe for exploitation.

From what I understand, emotional reaction to share market fluctuations cause more troubles for investors than real problems.

Thats a fair statement...

[HAL-42b]

The only thing I see is a buyer's market.

[German_EE]

I invest in the stock market but it is not my full time occupation. My 'system' is easy to understand:

1) If I buy a product and I like it then I buy stock in the company

2) If, later on, they screw up in one form or another then I sell the stock and move on.

So, a long time ago I purchased an Apple //e and decided that it was a great machine. They even published schematic diagrams and ROM dumps so that folk like me could hack into the machine. I bought some shares in APPL and, a few stock splits later, I'm a happy camper. I still have that //e and, if I could find some 5.25 inch media, it would probably still run.

In 2003 I purchased a Sony Viao notebook. For a while it was a great machine and that hi-res display was a thing of beauty so for the first time I invested in the Japanese stock market and purchased some Sony shares. Over the next 12 months the letters on the notebook keyboard started to rub off, the DVD writer failed and the network adapter got flaky so I contacted Sony Technical Support and asked them for a repair ticket. Because I had wiped the hard drive and installed Linux they voided the warranty (I was unable to run their diagnostics) so my machine was junk. The Sony shares were sold and I suggest that you look at the fall in the stock price over the last ten years.

My current stock list
Apple
Hyundai
Samsung
Lenovo
Virgin Airlines
Singapore Airlines
Kone
Merck

[dannyf]

You should flip the coin and think of it this way: he has at least 4bn+ to lose.

How much do you have to lose?

After that, you may not think too bad for him.

[mamalala]

How exactly are shareholders like leeches? It is their company! 100% of a company is owned by shareholders.

Nope. Shareholders didn't build the comapny. if the did, they all would be $EO's. But they are not. They are people that pretend to throw money at some company, while usually having no clue what it is about, only lookng at what profit they can make with their shares.

At least over here, most companies are owned by, well, what do you know, the person who actually created that company. Only after all that shares-crap started to gain a foothold things are constantly going in one direction only: down the drain.

Greetings,

Chris

[Galenbo]

I invest in the stock market but it is not my full time occupation. My 'system' is easy to understand:...

My current stock list
Apple
Hyundai
Samsung
Lenovo
Virgin Airlines
Singapore Airlines
Kone
Merck

Thanks for your interesting insights.

Do you invest in natural resources too? Gold, Silver, Oil, Thorium,... ?