Can we just stop pretending to analyze Tesla (TSLA) ? Can we just decide once and for all it is a total fool's game?
Throughout this period of this company being public it's made a car people love and done so through orthodox means, gaming the system of tax credits, using grandiose statements to raise money and ultimately delivering far less than what is expected both on financial results and on promises for the future.
The mere fact that a very respectable analyst at JPMorgan had to cut his numbers from the beginning of the year from about $5 a share in profit to a loss of 30 cents -- and we are only in August -- tells you that the company simply can't be analyzed by any means we have all learned to go by, especially because Tesla's stock is only down about 3% since those projections. I think we would all agree that most stocks would be cut in half at that pace of disappointment.
But Tesla is not like most stocks. In fact it's not like any stock. People want to compare it to Amazon (AMZN) , but that's very unfair to Jeff Bezos. To his credit, Bezos never bothered to give you estimates of what would occur and never tried to tell you that a loss was a gain or that he would be doing well if people would simply back out the cost of warehouses. Bezos would NEVER say Amazon would be making money when it was losing money if it weren't for the need to have capital expenditures. In fact, it was the opposite. He made it very glaring he would spend and lose money and you either believed or you didn't.
In other words, Bezos wasn't a braggart of a con man, he was just a visionary. And you either went with his vision or you don't. I believed and believe in Bezos and am totally comfortable recommending the stock because Bezos is an entirely rigorous businessman. Others are envious in his industry because he isn't graded by the constraints of same-store sales numbers and he gets a pass on losses taken that they can't. Nevertheless, he is idolized for having built a fulfillment system that is so good that his competitors have to use it and he co-opts his clients endlessly. But they have no alternatives.
Tesla's the opposite. Elon Musk routinely promises and always fails to deliver. He says things that are totally rooted in fantasy when it comes to the capital process and people either believe him because they are unsophisticated or because they sense that there's no choice because the big customers, the T Rowe's and the Fidelitys and the Vanguards believe. In other words, the institutions don't mind that he blindsides and boosts and fails because in the end they think that the car wins.
Their failure to sell on disappointments allows the stock to go higher like it did yesterday on a ridiculously bad quarter.
So, I say, we have to stop kidding ourselves. Tesla is about two things. The shorts who know that stocks go down when a company disappoints because sellers materialize. And the buyers -- the retail people who love the car and think that Musk is Steve Jobs and the institutions who are unshaken in their belief that Musk will make 500,000 cars some day and they drive one and love them.
The shorts need the owners to turn into sellers to win. They're not. They're not because they are not viewing the company based on the fundamentals. It is a sui generis situation.
I have never seen this in all my life. So forgive me if I throw up my hands and say it's a cult.
What the hell else is it?