SMM: recently, analysts have frequently pointed the finger at "Tesla's Bubble", and Michael Burry, the prototype of the movie "Big short" and a well-known hedge fund manager, is no exception. He seems to have captured a new "target" and joined the bearish group of Tesla.
Burry recently pointed out that Tesla's valuation is ridiculous compared with other companies in the industry. He posted a table on Twitter showing Tesla's valuations compared with other competitors. "Tesla's market-to-sales ratio has reached 18, while the industry average is only 0.35," he exclaimed. "
Global auto sales (excluding Tesla) are $2.3 trillion, EBIT (earnings before interest and tax) are $100 billion, and market capitalization is $807 billion, Burry wrote in the above tweet. Tesla has sales of $25 billion and a market capitalization of $438 billion without EBIT,. The global auto industry has a price-to-sales ratio of only 0.35 times, while Tesla is now an 18-fold Bubble.
Later, he pointed out in another tweet that Tesla needs to sell regulatory points in order to make a profit. In addition, as the tax credit policy gradually expires / delivery stagnates, Tesla's growth will be weak. Low-grade lithium-ion phosphate batteries will mean lower energy intensity and lower mileage. At the same time, he also tagged the Weibo as "Bubble".
Michael Burry is an American neurosurgeon, well-known value investor and hedge fund manager. He gained fame and fortune by shorting mortgage securities before the 2008 crisis and was hailed as a legend in the investment community. However, after the subprime crisis, he has rarely appeared in the media spotlight.
In fact, Tesla's share price has plummeted because the much-anticipated "Battery Day" has not left a deep impression on people to a large extent. Tesla shares tumbled 10.34% to $380.36 as of Wednesday's close. The company's shares have risen about 400 per cent this year, but have fallen 15 per cent since September.
Recently, many Wall Street bigwigs have joined the "Tesla short camp" one after another. In their view, Tesla is now one of the largest Bubble in the capital market, and its share price far exceeds a reasonable valuation. The unpromising profit outlook and the sustainability of business growth, especially the high debt ratio, make Tesla seem to be dancing on a cliff and may fall off a cliff at any time.
In addition, of the 33 securities companies that track the stock, only 8 have a buy rating on Tesla, 15 have a hold rating and 10 recommend selling.
Analysts at (Baird), an independent international investment bank, also listed Tesla as a new bearish target in their latest report on Wednesday, saying: "given that the battery day is over, we think (Tesla's share price) will fall into a situation where there is a lack of catalysts, and given the recession environment, we are cautious about demand."
Patrick Hummel, an analyst at UBS, expressed a similar view and gave Tesla a "neutral" rating. He pointed out in the research newspaper that Tesla's advantages in battery technology and cost have been fully reflected in the stock price. "given the high expectations for the event, we think the market will initially react negatively to the relatively long innovation time and lack of detail."