who care? it's a giant Meme st

5
Comment
Favorite

anyhow99
2023-03-03

who care? it's a giant Meme stock, which I called a fan stock. Just write options and ride the wave

Tesla: It's Just The Beginning

SummaryThe market didn't like Tesla, Inc.'s Investor Day - in this article I'm sorting out the reaso

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment

Top
Latest

No comments yet

Most Discussed

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"magic":2,"id":9940850191,"tweetId":"9940850191","gmtCreate":1677823454814,"gmtModify":1677823457833,"author":{"id":3573519995060976,"idStr":"3573519995060976","authorId":3573519995060976,"authorIdStr":"3573519995060976","name":"anyhow99","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":5,"crmLevelSwitch":1,"currentWearingBadge":{"badgeId":"a83d7582f45846ffbccbce770ce65d84-1","templateUuid":"a83d7582f45846ffbccbce770ce65d84","name":"Real Trader","description":"Completed a transaction","bigImgUrl":"https://static.tigerbbs.com/2e08a1cc2087a1de93402c2c290fa65b","smallImgUrl":"https://static.tigerbbs.com/4504a6397ce1137932d56e5f4ce27166","grayImgUrl":"https://static.tigerbbs.com/4b22c79415b4cd6e3d8ebc4a0fa32604","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.28","individualDisplayEnabled":0},"individualDisplayBadges":[],"fanSize":2,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"html":"<html><head></head><body><p>who care? it's a giant Meme stock, which I called a fan stock. Just write options and ride the wave</p></body></html>","htmlText":"<html><head></head><body><p>who care? it's a giant Meme stock, which I called a fan stock. Just write options and ride the wave</p></body></html>","text":"who care? it's a giant Meme stock, which I called a fan stock. Just write options and ride the wave","highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/9940850191","repostId":1123619392,"repostType":2,"repost":{"id":"1123619392","kind":"news","pubTimestamp":1677820190,"share":"https://www.laohu8.com/m/news/1123619392?lang=&edition=full","pubTime":"2023-03-03 13:09","market":"us","language":"en","title":"Tesla: It's Just The Beginning","url":"https://stock-news.laohu8.com/highlight/detail?id=1123619392","media":"Seeking Alpha","summary":"SummaryThe market didn't like Tesla, Inc.'s Investor Day - in this article I'm sorting out the reaso","content":"<html><head></head><body><h2>Summary</h2><ul><li>The market didn&#39;t like Tesla, Inc.&#39;s Investor Day - in this article I&#39;m sorting out the reasons why.</li><li>The new Mexican factory shows promise, but there are risks with additional CAPEX and construction during an economic slowdown and possible EV market saturation.</li><li>Tesla can now head towards its fair value, which is 30% lower vs. the current price based on my model.</li><li>Buyers must exercise caution and refrain from attempting to catch falling knives until signs of &#34;dip-buying conditions&#34; emerge again.</li></ul><p><img src=\"https://static.tigerbbs.com/d1e4942b3fa514191bf65dc2a4b5a42f\" tg-width=\"750\" tg-height=\"500\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><h2>Introduction</h2><p>On February 13, I wrote my 6th article on <b>Tesla, Inc.</b>(NASDAQ:TSLA) stock, warning investors and speculators that they need to prepare for another selloff. I based this on the overall overbought market and overlyoptimistic opinion about Tesla&#39;s prospects and the company&#39;s valuation problems.</p><p>However, the euphoria continued for a while - from the price at the publication of $194.64 per share, the stock reached a high of just over $217 [on February 16, 2023]. Such a strong move overshadowed the momentum of more defensive sectors - below, BloombergcomparesTSLA&#39;s price action to Buffett&#39;s Berkshire Hathaway Inc. (BRK.B) and Exxon Mobil Corporation (XOM):</p><p><img src=\"https://static.tigerbbs.com/9552493163515a2aaf2da05623cfd2da\" tg-width=\"640\" tg-height=\"363\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>Bloomberg [February 28, 2023]</p><p>However, now everything is going according to my scenario - Teslastock is downover 5% in after-hours trading to around $191-192 as I write this. But the overboughtcondition is by far not the main cause this time. Let&#39;s figure it out together.</p><h2>Disappointing Investor Day</h2><p>You have already noticed without me how quickly and to what extent the media reacted to the information from Tesla&#39;s recent Investor Day. This is not surprising - Elon Musk himselfannouncedthat he was working on a Master Plan pt.3 in March 2023. Therefore, expectations were very high - I could count about 20 articles onBloombergimmediately after the event.</p><p>One of the major announcements made by the company is its intention to construct a new gigafactory in Mexico, costing roughly $5 billion in CAPEX. Upon completion, it will be the fifth and the biggest gigafactory owned by the company. Tesla stated that this new plant, along with expansions to its current facilities, could increase the company&#39;s manufacturing capacity to approximately 3.5 million cars per year,Barron&#39;s reports. During the event, the management of the company announced that the new factory in Mexico would be producing their upcoming vehicle model, which is a lower-priced car that had been hinted at earlier. Tesla stated that additional details about this vehicle would be revealed at a later date.</p><p>In my opinion, this is a pretty right move for the company in terms of production efficiency. According tomexperience.com, as of 01 January 2023, the minimum wage is 207.44 pesos per workday, and for the &#34;Northern Border Zone&#34; it is 312.41 pesos per workday. Even though these figures are about 20% higher than last year, they are still $11.3 - $17.02 per day when one converts the pay into USD. For comparison, in China, the minimum wage per month is CNY 2480 according totake-profit.org- for 22 working days, that&#39;s about $16.34 per day.</p><p>So, I believe Tesla&#39;s decision to expand its production capacity in North America is a significant development, especially in light of the company&#39;s repeated announcements of lower prices for its products in China throughout 2022. Where one part of the market goes, another comes in. By focusing on North America, where the company has a strong moat, Tesla could gain a major advantage in pricing. Once the new facility is up and running, Tesla&#39;s substantial margin advantage could help it maintain its market share in the face of competition from other electric vehicle (&#34;EV&#34;) makers such as General Motors (GM) and Ford (F).</p><p>The issue is that gigafactories can&#39;t be built within a year. Based on thetimeline of the Berlin Factory, it took three years for the planning and location processes to be completed from 2015 to 2018. After that, it took an additional two years for the construction and opening [2019-2021], until Tesla held the Gigafactory Berlin-Brandenburg County Fair on October 9, 2021. Thegovernment of Brandenburggranted Giga Berlin-Brandenburg its final environmental approval in March 2022.</p><p>Now, even if we assume that the first phase is already completed andMusk&#39;s conversation with AMLO[the current Mexican President] indicates that there will be less bureaucracy, this is at least a 2-year job. In all that time, it will be necessary to invest quite a bit - and this is against a backdrop of uncomfortably high-interest rates for business and possible demand issues. Tesla is self-sufficient in terms of generating cash flow from operations - based on YCharts data, the company generated $14.72 billion in TTM CFO. Long-term debt on thebalance sheetis now about $2.05 billion, with $22.18 billion in cash and equivalents - Tesla will most likely build with its own money, but<i>investors will then have to shift their expectations of large buybacks.</i></p><p>But Tesla stock is falling in after-hours trading for a different reason -everyone has been waitingfor a new low-cost car that wasn&#39;t presented.</p><blockquote>He [Elon Musk] offered no details on timing, saying a &#34;proper product event&#34; will be held later. Lars Moravy, Tesla’s vice-president of vehicle engineering was similarly vague, answering an analyst’s question with only: &#34;We’re gonna go as fast as we can.&#34; The longer the event went on, the more investors appeared to lose heart. Tesla shares fell as much as 6.8% to $189 in after-hours trading.</blockquote><p>The company&#39;s narrow product range has both advantages and disadvantages. On the positive side,<i>this approach simplifies the production process, resulting in more efficient business operations</i>. This is particularly beneficial for Tesla because the company uses fewer components and manufacturing processes, leading to higher profitability compared to its competitors. However,<i>the downside is that the limited product range makes the company vulnerable to competition</i>. This has already been observed in the Chinese market, and it is uncertain whether the company will be able to maintain its market share in other parts of the world without introducing new models, despite the benefits of the new factory in Mexico.</p><p><img src=\"https://static.tigerbbs.com/4d65653961052f359f940b4df5e1da00\" tg-width=\"640\" tg-height=\"388\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>GLJ Research [February 21, 2023] - proprietary source</p><p>In the price range of Tesla, there are currently approximately 50 car models available for purchase in the European market. Furthermore, an increasing number of models are expected to be introduced in the future. The competition is even more intense in the Chinese market. Tesla&#39;s market share in China has recently decreased significantlyto only 5%, compared to a much higher mid-double-digit figure in the past. Therefore, the market&#39;s reaction to the absence of a new model is a pattern, not an overreaction. In my opinion, this is a logical demand of the shareholders in view of the new challenges of a fast-growing market, where the current market leaders can lose their position very quickly in the process of business maturity.</p><h2>Valuation</h2><p>First off, a few words about how one of the most famous Tesla bears, GLJ Research, values the company. I know their credibility raises questions for many, but I take a journalistic approach and try to cover as many different viewpoints as possible - especially in my neutral articles like the one you are reading. That seems fair to me.</p><p>Here&#39;s their reasoning and calculations [proprietary source]:</p><blockquote>We have developed a valuation framework for 2035 to derive our 2023 price objective for Tesla. In a neutral scenario, we assume that a) electric vehicles will constitute 50% of all auto production in 2035, b) Tesla will have a 15% market share of global EV unit sales, giving it an 8% global auto market share compared to Toyota&#39;s 10%, c) Tesla&#39;s net margin in 2035 will be 6%, d) people will still have a strong affinity for Tesla and will be willing to pay a P/E of 15x in 2035, and e) those same people will want to earn just 10% per year to hold Tesla&#39;s shares for the next 14 years. Based on this scenario, we value Tesla at $73/share, or $84.6B, exiting 2023. Among the risks to our call is Elon Musk&#39;s ability to sell and raise billions for things that do not exist and probably never will.</blockquote><blockquote>[February 21, 2023.]</blockquote><p>The problem with their model, in my opinion, is the rather conservative estimates of the company&#39;s profitability. Why would the profit margin drop from the current 15.54% [TTM] to 6% when executives are trying to cut costs year after year? These initiatives were even mentioned at the recent investor day. And history itself is on the company&#39;s side in this regard - competition has existed for some time, and even sudden disasters [such as COVID] have not been able to stop TSLA from increasing its profit margin year over year:</p><p><img src=\"https://static.tigerbbs.com/4ed7754b068ff37ecd97895cd69dda5f\" tg-width=\"635\" tg-height=\"417\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/>Data byYCharts</p><p>I still think that the assumptions frommy February article- &#34;<i>Tesla Stock: Get Ready For A Sell-Off</i>&#34; - are more reasonable:</p><p><img src=\"https://static.tigerbbs.com/f149df60879d8f85e4428a21a6b5aab3\" tg-width=\"560\" tg-height=\"774\" width=\"100%\" height=\"auto\"/></p><p>A 30% drop seems very likely to me - Tesla has moved too far away from the group of its competitors, and now, against the backdrop of negative news, the market can easily correct the &#34;injustice&#34; that has occurred.</p><p><img src=\"https://static.tigerbbs.com/be20f42160b5995c1e5d9802d78d9cc3\" tg-width=\"640\" tg-height=\"516\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>BofA&#39;s Automotive report [February 24, 2023] - proprietary source</p><h2>Technicals Meet Bad Reaction To Musk&#39;s Plans</h2><p>In regards to the technical analysis, it is worth noting that the company&#39;s exceptional outperformance that has been consistently observed since the inception of 2023 has gradually decreased on the day preceding Investor Day, as evidenced in the daily chart below. It&#39;s plausible that bulls were awaiting a fresh catalyst to further purchase the stock - their actions formed an up flag that usually heralds a strong move in the direction of a breakout:</p><p><img src=\"https://static.tigerbbs.com/3dc8f6809d706ec2a9438bf88991941d\" tg-width=\"640\" tg-height=\"512\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"/></p><p>TrendSpider, author&#39;s notes</p><p>Given the decline in TSLA stock in after-hours trading, the flag was broken, but not in favor of the bulls. With the short interest of 2.6% [YCharts data], the bears have room to rage without the risk of being short-squeezed - apparently, the cold reception of the day that everyone had been looking forward to became a turning point for TSLA and new local lows are in store for us.</p><h2>Quick Takeaway</h2><p>I find the new Tesla, Inc. Mexican factory quite promising, but there are risks involved with additional capital expenditure and a few years of construction during a period of economic slowdown and possible drawdowns in demand and EV market saturation. These risks are not yet being taken seriously by the bulls as far as I see.</p><p>Tesla&#39;s limited product line has been a persistent problem that the company has yet to resolve. Addressing this issue may require sacrificing cost reduction initiatives, as research and development and selling, general, and administrative expenses, in addition to capital expenditure, will likely rise, potentially reducing the company&#39;s profitability.</p><p>While I believe that Tesla will eventually overcome these difficulties, I must emphasize that the current valuation exceeds reality. Additionally, the technical picture indicates that the bullish trend may be reversing. Buyers must exercise caution and refrain from attempting to catch falling knives until signs of &#34;dip-buying conditions&#34; emerge again. For now, I reiterate the &#34;Hold&#34; rating and anticipate that Tesla, Inc. stock prices will keep moving down shortly.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla: It's Just The Beginning</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla: It's Just The Beginning\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-03-03 13:09 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4583803-tesla-its-just-the-beginning><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryThe market didn't like Tesla, Inc.'s Investor Day - in this article I'm sorting out the reasons why.The new Mexican factory shows promise, but there are risks with additional CAPEX and ...</p>\n\n<a href=\"https://seekingalpha.com/article/4583803-tesla-its-just-the-beginning\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSLA":"特斯拉"},"source_url":"https://seekingalpha.com/article/4583803-tesla-its-just-the-beginning","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1123619392","content_text":"SummaryThe market didn't like Tesla, Inc.'s Investor Day - in this article I'm sorting out the reasons why.The new Mexican factory shows promise, but there are risks with additional CAPEX and construction during an economic slowdown and possible EV market saturation.Tesla can now head towards its fair value, which is 30% lower vs. the current price based on my model.Buyers must exercise caution and refrain from attempting to catch falling knives until signs of \"dip-buying conditions\" emerge again.IntroductionOn February 13, I wrote my 6th article on Tesla, Inc.(NASDAQ:TSLA) stock, warning investors and speculators that they need to prepare for another selloff. I based this on the overall overbought market and overlyoptimistic opinion about Tesla's prospects and the company's valuation problems.However, the euphoria continued for a while - from the price at the publication of $194.64 per share, the stock reached a high of just over $217 [on February 16, 2023]. Such a strong move overshadowed the momentum of more defensive sectors - below, BloombergcomparesTSLA's price action to Buffett's Berkshire Hathaway Inc. (BRK.B) and Exxon Mobil Corporation (XOM):Bloomberg [February 28, 2023]However, now everything is going according to my scenario - Teslastock is downover 5% in after-hours trading to around $191-192 as I write this. But the overboughtcondition is by far not the main cause this time. Let's figure it out together.Disappointing Investor DayYou have already noticed without me how quickly and to what extent the media reacted to the information from Tesla's recent Investor Day. This is not surprising - Elon Musk himselfannouncedthat he was working on a Master Plan pt.3 in March 2023. Therefore, expectations were very high - I could count about 20 articles onBloombergimmediately after the event.One of the major announcements made by the company is its intention to construct a new gigafactory in Mexico, costing roughly $5 billion in CAPEX. Upon completion, it will be the fifth and the biggest gigafactory owned by the company. Tesla stated that this new plant, along with expansions to its current facilities, could increase the company's manufacturing capacity to approximately 3.5 million cars per year,Barron's reports. During the event, the management of the company announced that the new factory in Mexico would be producing their upcoming vehicle model, which is a lower-priced car that had been hinted at earlier. Tesla stated that additional details about this vehicle would be revealed at a later date.In my opinion, this is a pretty right move for the company in terms of production efficiency. According tomexperience.com, as of 01 January 2023, the minimum wage is 207.44 pesos per workday, and for the \"Northern Border Zone\" it is 312.41 pesos per workday. Even though these figures are about 20% higher than last year, they are still $11.3 - $17.02 per day when one converts the pay into USD. For comparison, in China, the minimum wage per month is CNY 2480 according totake-profit.org- for 22 working days, that's about $16.34 per day.So, I believe Tesla's decision to expand its production capacity in North America is a significant development, especially in light of the company's repeated announcements of lower prices for its products in China throughout 2022. Where one part of the market goes, another comes in. By focusing on North America, where the company has a strong moat, Tesla could gain a major advantage in pricing. Once the new facility is up and running, Tesla's substantial margin advantage could help it maintain its market share in the face of competition from other electric vehicle (\"EV\") makers such as General Motors (GM) and Ford (F).The issue is that gigafactories can't be built within a year. Based on thetimeline of the Berlin Factory, it took three years for the planning and location processes to be completed from 2015 to 2018. After that, it took an additional two years for the construction and opening [2019-2021], until Tesla held the Gigafactory Berlin-Brandenburg County Fair on October 9, 2021. Thegovernment of Brandenburggranted Giga Berlin-Brandenburg its final environmental approval in March 2022.Now, even if we assume that the first phase is already completed andMusk's conversation with AMLO[the current Mexican President] indicates that there will be less bureaucracy, this is at least a 2-year job. In all that time, it will be necessary to invest quite a bit - and this is against a backdrop of uncomfortably high-interest rates for business and possible demand issues. Tesla is self-sufficient in terms of generating cash flow from operations - based on YCharts data, the company generated $14.72 billion in TTM CFO. Long-term debt on thebalance sheetis now about $2.05 billion, with $22.18 billion in cash and equivalents - Tesla will most likely build with its own money, butinvestors will then have to shift their expectations of large buybacks.But Tesla stock is falling in after-hours trading for a different reason -everyone has been waitingfor a new low-cost car that wasn't presented.He [Elon Musk] offered no details on timing, saying a \"proper product event\" will be held later. Lars Moravy, Tesla’s vice-president of vehicle engineering was similarly vague, answering an analyst’s question with only: \"We’re gonna go as fast as we can.\" The longer the event went on, the more investors appeared to lose heart. Tesla shares fell as much as 6.8% to $189 in after-hours trading.The company's narrow product range has both advantages and disadvantages. On the positive side,this approach simplifies the production process, resulting in more efficient business operations. This is particularly beneficial for Tesla because the company uses fewer components and manufacturing processes, leading to higher profitability compared to its competitors. However,the downside is that the limited product range makes the company vulnerable to competition. This has already been observed in the Chinese market, and it is uncertain whether the company will be able to maintain its market share in other parts of the world without introducing new models, despite the benefits of the new factory in Mexico.GLJ Research [February 21, 2023] - proprietary sourceIn the price range of Tesla, there are currently approximately 50 car models available for purchase in the European market. Furthermore, an increasing number of models are expected to be introduced in the future. The competition is even more intense in the Chinese market. Tesla's market share in China has recently decreased significantlyto only 5%, compared to a much higher mid-double-digit figure in the past. Therefore, the market's reaction to the absence of a new model is a pattern, not an overreaction. In my opinion, this is a logical demand of the shareholders in view of the new challenges of a fast-growing market, where the current market leaders can lose their position very quickly in the process of business maturity.ValuationFirst off, a few words about how one of the most famous Tesla bears, GLJ Research, values the company. I know their credibility raises questions for many, but I take a journalistic approach and try to cover as many different viewpoints as possible - especially in my neutral articles like the one you are reading. That seems fair to me.Here's their reasoning and calculations [proprietary source]:We have developed a valuation framework for 2035 to derive our 2023 price objective for Tesla. In a neutral scenario, we assume that a) electric vehicles will constitute 50% of all auto production in 2035, b) Tesla will have a 15% market share of global EV unit sales, giving it an 8% global auto market share compared to Toyota's 10%, c) Tesla's net margin in 2035 will be 6%, d) people will still have a strong affinity for Tesla and will be willing to pay a P/E of 15x in 2035, and e) those same people will want to earn just 10% per year to hold Tesla's shares for the next 14 years. Based on this scenario, we value Tesla at $73/share, or $84.6B, exiting 2023. Among the risks to our call is Elon Musk's ability to sell and raise billions for things that do not exist and probably never will.[February 21, 2023.]The problem with their model, in my opinion, is the rather conservative estimates of the company's profitability. Why would the profit margin drop from the current 15.54% [TTM] to 6% when executives are trying to cut costs year after year? These initiatives were even mentioned at the recent investor day. And history itself is on the company's side in this regard - competition has existed for some time, and even sudden disasters [such as COVID] have not been able to stop TSLA from increasing its profit margin year over year:Data byYChartsI still think that the assumptions frommy February article- \"Tesla Stock: Get Ready For A Sell-Off\" - are more reasonable:A 30% drop seems very likely to me - Tesla has moved too far away from the group of its competitors, and now, against the backdrop of negative news, the market can easily correct the \"injustice\" that has occurred.BofA's Automotive report [February 24, 2023] - proprietary sourceTechnicals Meet Bad Reaction To Musk's PlansIn regards to the technical analysis, it is worth noting that the company's exceptional outperformance that has been consistently observed since the inception of 2023 has gradually decreased on the day preceding Investor Day, as evidenced in the daily chart below. It's plausible that bulls were awaiting a fresh catalyst to further purchase the stock - their actions formed an up flag that usually heralds a strong move in the direction of a breakout:TrendSpider, author's notesGiven the decline in TSLA stock in after-hours trading, the flag was broken, but not in favor of the bulls. With the short interest of 2.6% [YCharts data], the bears have room to rage without the risk of being short-squeezed - apparently, the cold reception of the day that everyone had been looking forward to became a turning point for TSLA and new local lows are in store for us.Quick TakeawayI find the new Tesla, Inc. Mexican factory quite promising, but there are risks involved with additional capital expenditure and a few years of construction during a period of economic slowdown and possible drawdowns in demand and EV market saturation. These risks are not yet being taken seriously by the bulls as far as I see.Tesla's limited product line has been a persistent problem that the company has yet to resolve. Addressing this issue may require sacrificing cost reduction initiatives, as research and development and selling, general, and administrative expenses, in addition to capital expenditure, will likely rise, potentially reducing the company's profitability.While I believe that Tesla will eventually overcome these difficulties, I must emphasize that the current valuation exceeds reality. Additionally, the technical picture indicates that the bullish trend may be reversing. Buyers must exercise caution and refrain from attempting to catch falling knives until signs of \"dip-buying conditions\" emerge again. For now, I reiterate the \"Hold\" rating and anticipate that Tesla, Inc. stock prices will keep moving down shortly.","news_type":1},"isVote":1,"tweetType":1,"viewCount":573,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":80,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}