Did Tesla (TSLA) change the entire investing world? The more I ponder Lucid or Fisker (FSR) or all the SPACs involving electric vehicles, the more I think about the notion of what I thought was high-risk technology spending, the more I realize that Tesla made everything more magical, or more like alchemy, with either one producing a positive result for the believer.
It's so difficult now to imagine several years ago when very smart people would come on air and point blank just say that Tesla was a bankrupt company, a fraud, one that would eventually be revealed if you just waited long enough.
If you said something positive about Elon Musk you were regarded as someone who had no right to discuss the concept of investing. At every auto milestone -- it's bigger than Ford (F) , it's bigger than General Motors (GM) , It's bigger than GM and Ford, it's bigger than, whatever -- those brave souls like Cathie Wood from ARK (ARKK) and Ron Baron, a frequent Squawk Box contributor, faced criticism from the most rigorous of investing minds.
I don't talk to hedge fund managers if I can ever avoid it, but I know that if I said something good about Musk I could expect a big blowback about what a clown and a fool I was and that I simply couldn't accept the fact that my inability to read a balance sheet well enough made it so I should not be allowed to opine on stocks.
What can I say? Once it was clear that he could make money on cars, even if tax credits made it possible, and, more important, he could raise all the money he wanted to, then the deal was sealed and Tesla was off to the races.
We forget, of course, that during this period, the goal posts were changed. They were made SHORTER, in that Tesla went from being a car company, where the goal posts are far, to a technology company where, periodically, the goal posts are much closer so what looked like a ridiculous market cap was actually a reasonable one versus other tech companies.
After that, whole non-tech companies that could never be worth much at all, became tech companies that were crushing it without any profits. If DoorDash (DASH) is a group of delivery people it's worth very little, but if it is a tech company it's worth $45 billion, probably ten times what you thought. If Airbnb (ABNB) is a hotel company, maybe it's a struggling, profitless innkeeper; if it is a tech company, you have a $120 billion market cap. If Uber (UBER) is a cab company, it's on death's door, but if it is a tech company, it's certainly worth $111 billion. You think that's each company speaking? Or is that Tesla speaking through the prism of one kind of company being considered another, just like Lordstown (RIDE) , just like Lion Electric or EVgo or Blink Charging (BLNK) and ChargePoint Holdings (CHPT) and of course, Lucid and Fisker.
Throughout this period the old-fashioned investors rushed to compare what amounted to be apples to oranges. The newer investors couldn't believe that anyone would see it any other way. Isn't that, for example, how GameStop (GME) could go from a failing video game store to a potentially fast-growing digital retailer of something of which we don't know yet? Of course. Why? Because Chewy (CHWY) is the Tesla of dog food; it's not a seller of canine treats, it's a digitizer of the pet food industry.
I know that one day we might revert to thinking less magically and view all of these companies as what they might have set out to be before the stunning success of Tesla, but right now the newfound prevailing wisdom is clobbering the old kind and those who cling to the latter are destined to be run over by a Lucid or a Fisker or the original, Tesla, itself.