To The Moon

Summary

Once the market investment sentiment bottoms out and reverses, the stock price will also have high chance to repair the rebound.

tesla is seriously undervalued...Here's the details ....

Tesla, $Tesla Motors(TSLA)$ which once had a total market value of more than $1 trillion. US, now the total market value has fallen below $400 billion and is controlled by $ Tencent.$TENCENT(00700)$  HK catches up. In the past year, there has been a round of reshuffle of global technology companies.

As of December 23, Tesla's total market value was $38.887 billion, and Tesla's stock price has fallen by 65.03% since this year. Tencent ADR's total market value is 380.739 billion US dollars, and the stock price has fallen by 28.73% since this year.

If calculated according to the decline in 2022, Tencent's decline is much smaller than that of Tesla, but judging from the single-year decline in 2021, Tencent's decline is significantly greater than Tesla's decline. Taking 2021 as an example, Tencent ADR fell by 23.74% in 2021, but Tesla increased by 49.70% in 2021. However, from the cumulative decline since 2021, Tencent ADR has fallen by 59.49% in the past two years, but the cumulative maximum decline has reached 75%. Tesla's cumulative decline in the past two years reached 70.78%. It can be seen that from the analysis of the cumulative largest decline, the decline between the two is similar, but from the perspective of the decline since this year, Tesla's decline is significantly greater than that of Tencent.

Tesla's stock price has fallen sharply, both for its own reasons, but also the factors affecting the overall market environment. In 2022, in addition to Tesla, well-known technology giants such as Meta platforms, Google and Amazon experienced a decline to varying degrees, and the stock price of technology giants was cut into a normal phenomenon.

Behind the sharp decline in Tesla's stock price, there is a lot of linkage with the trend of technology stocks. 2022 can be called the year of bubble squeeze of global technology stocks, but the bubble squeeze of A-share Hong Kong stocks is one year earlier than that of U.S. stocks. In the end, U.S. technology giants still can't escape the result of bubble squeeze. However, behind the bursting of the U.S. stock technology stock bubble, it is largely related to the factors that the Federal Reserve raised interest rates significantly. Behind the Federal Reserve's sharp increase in interest rates, the market interest rates have increased rapidly, and the risk appetite in the global market has changed to a large extent.

Throughout this round of global technology stock bubble bursting, there are often some common characteristics. For example, the higher the valuation of technology stocks, the faster the valuation squeeze. For example, the more incomprehensible the concept of Internet technology stocks, the greater the stock price decline. In addition, the higher the pledge rate of large shareholders and the greater the leverage risk, the greater the pressure of bubble squeeze.

Tesla's stock price fell sharply from $414.5 to $121.02, with a cumulative decline of 70%. In terms of market capitalization, from $1.1 trillion fell sharply to $38.8 billion. It turned out that the three Tencent companies could reach Tesla, but now the market value of one Tesla is not as high as Tencent's market value.

Tesla's stock price plummeted, in addition to the accelerated debubble of technology stocks, but also related to Musk's series of operations since this year.

After Musk became the richest man in the world, his business ambitions expanded rapidly and spent a lot of money to buy Twitter shares. However, Musk has a wide range of funds to raise funds to acquire Twitter, but in addition to bank loans, it is mainly inseparable from share pledge, selling shares and other behaviors.

If he sells cash out directly from the capital market, Musk does not have to take the leverage risk and easily make a profit to meet the funds needed for Twitter's acquisition. If Musk raises funds through equity pledge or selling bearish options, he will face greater risks.

For example, selling bearish options can get a certain profit for Musk's rights. However, the trading price setting of selling bearish options directly affects the risk of the whole transaction. If Musk sets the trading price to $300, then the stock price will continue to be stable at more than $300. Musk can easily obtain the profit from the right, and the transaction will be automatically completed when it expires. However, if Tesla's stock price continues to fall and fall below the price of $300 on exercise day, Musk needs to prepare a fund to meet the $300 exercise right. If it cannot be made up, it will face a greater exercise risk and test Musk's capital status.

If it involves the operation of equity pledge, then you need to look at Musk's clearance early warning line and clearance line at this time. When the stock price touches the clearance line, Musk needs to raise funds or supplementary pledges, which also tests Musk's financial situation. If Musk is unable to replenish the pledge or does not have enough funds to meet the demand for the position, he will face the risk of forcibly closeing the position.

At present, Tesla still has a certain competitive advantage in production and sales. Against the background that the fundamentals have not deteriorated, perhaps the company's stock price has been affected by the sniping of some capital agencies. In addition, Musk's series of operations were voted by market funds, which became the fuse for the accelerated decline of stock prices.

From the perspective of Tesla, the biggest problem currently facing is to solve the pressure of centralized selling in the market. Against the background of unbalanced buyer and seller strength, Tesla needs to have sufficient buyer funds to hedge the risk of centralized selling of funds. Of course, Musk and the consortium behind it also need to do something to achieve the purpose of stabilizing market investment confidence and stabilizing market investment sentiment.

Musk promised not to reduce his holdings within 2 years, or it was only the first step to stabilize the stock price. Next, Tesla also needs more substantive measures to stabilize the stock price, such as the measures to increase holdings of the behind the consortium, the repurchase and annotation of shares, etc., at least to give the market confidence to see the company's protection, which may be an important measure for the gradual stabili  zation of the stock price.

After Tencent's stock price fell by 75%, the stock price rebounded sharply by 50%, which is also a reflection of market investment sentiment. For Tesla, as one of the global technology giants, the stock price has fallen by 70%, which is not an abnormal market phenomenon. Against the background that the fundamentals have not deteriorated substantially, it is more likely to be related to factors such as market fear and concentrated selling of funds. From the perspective of price speculation, it may not be a bad thing for Tesla to continue to decline irrationally. 

Once the market investment sentiment bottoms out and reverses, the stock price will also have a need to repair the rebound.

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