Stocks soar
Another record high for US stocks overnight, with the S&P 500 up by a rip-snorting 17 per cent so far this year in notching the best start to a calendar year in more than three decades.
The Dow Jones and NASDAQ indices are also back to record highs.
Wild times.
Wild times.
These have certainly been interesting moves, with valuations often running very high for tech companies in particular.
Tesla lacking charge
In recent years increasingly wide-eyed observers have noted the swings and arrows of outrageous fortune experienced by cash furnaces such as Netflix (NFLX) with its enormous debt pile yet an outlandish market cap of US$164 billion.
There's been no story quite as entertaining as Tesla (TSLA), though, with its pot-smoking CEO duelling it out with the sceptics in real time on social media; truly a stock market story for our times.
Although the gap has closed Tesla had run its total net income from negative US$78 billion in 2007 all the way to nearly negative US$2 billion by 2017, a cash furnace nonpareil.
The stock price has been volatile some time now but things finally appear to be unravelling, with TSLA sinking below $235 today, to now be down 38 per cent since its most recent peak in December.
Markets at last appear to be wearying of the grandiose promises, flamboyant claims, and dire 'earnings' reports.
Even after the crash the market is still valuing Tesla at around US$40 billion, which is pretty darned optimistic given the parlous state of its cashflows.
Last year Tesla sold 200,000 vehicles, versus 2.5 million for Ford.
Even after the 38 per cent correction the market is valuing both companies at a similar market cap.
Recent moves in bond markets appear to suggest that a Tesla capital raising may be in the pipeline for the not-too-distant future, so the shorts may have had their fun for now, even after accounting for a potentially material dilution.
Never a dull moment here.
What a yarn!
