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Why Tesla keeps going down?

January 24, 2025

Why Tesla keeps going down?

Tesla lost another 1.4% today. Tesla is already down 16% from its intraday all time high on December 18, 2024. Tesla's stock keeps deflating because the company is grossly overpriced. Tesla doubled in value after Trump won the elections because investors were caught up in a bubble spiral predicated on the wrong notion that Trump will help Musk continue to be the world's richest primate. Trump is not anybody's "bitch" and that's how he feels after seeing Musk's fortune double in less than 50 days just because Musk played the MAGA card and donated to the Trump campaign. The Trump Musk bromance will end in flames. The market is seeing the signs. Tesla will continue deflating. 

That's how we see it at Creatix, the business intelligence (BI) matrix. At Creatix, the vision is clear: after AI comes BI. The mission is more difficult: to transform AI into BI. Intelligence is problem-solving ability. BI is commercial problem-solving ability. The "problem" that we are working on the most these days is making money off Tesla's inevitable fall and predictable stock price correction. 

Tesla is a deflating political bubble. 

Tesla is the biggest political bubble in history. Tesla Inc. (TSLA) closed today at $406.58, representing a highly unwarranted market value or capitalization of $1.31 trillion under a whooping price to earnings ratio of 111. That is, investors are still paying $111 for every $1 in profit made by Tesla. We think that Tesla's market capitalization should be less than half. We expect to see Tesla share prices deflate to about $199 per share in less than a year. 

On November 4, 2024, the day before the elections, Tesla's stock closed at $242.84. It was overpriced then. On December 18, 2024, the stock reached an incredible all-time intraday high of $488.54. Tesla doubled in value (a 100% increase) in less than 50 days. Why? Because Elon Musk became "Dark MAGA" and donated $277 million to the Trump campaign. Following Trump's victory, the market assumed that Trump would pay Musk back with regulatory and financial concessions that would allow the South African entrepreneur continue to milk the United States government for subsidies and rosy entitlements. 

Make no mistake. Even before the elections, at $243 per share, Tesla was significantly overpriced. It had a market capitalization of $1.1 trillion and Price-to-Earnings (P/E) ratio of 69. That is, investors were "dumb" enough to be willing to pay $69 for every $1 in profit. That sounds super dumb, but it's how the investing game is played. Investors do not pay too much attention to the P/E ratio when they believe that the value of a stock will continue increasing over time. 

Elon Musk is a Trumpian Salesperson

Elon Musk is a brilliant salesperson that got the market to believe that Tesla is not only an electric vehicle (EV) car maker past its innovation prime, but some sort of super AI technology company that will dominate the world with robotaxis and Star Wars-like AI robots everywhere. That's BS. Tesla has no way of realizing the AI hype that Musk has been promising. It's not going to happen. There's no magic wand for Musk to wave and turn Tesla electric cars into real life Hollywood Transformers. Tesla doesn't hold any intellectual property advantage in the AI industry. Tesla's biggest asset is the persona of Elon Musk who will be now busy playing government bureaucrat for Trump. 

Tesla's doubling in price miracle came, not from business fundamentals, but from Elon Musk's political activism and milking of the Trump presidential campaign. Musk became Dark MAGA in Trump rallies and donated $277 million to the campaign, becoming the single biggest donor of the campaign and in U.S. history. The political investment paid super well for Musk. In just 7 weeks after the election, Tesla shares had doubled in price, reaching an all-time intraday high of $488 per share on December 18, 2024. 

Tesla's bubble stock has been deflating since December 18, 2025. The correction is just beginning and will continue. In a little over a month, Tesla has already lost 16% in value. Tesla will continue going down. At least that is our prediction. Investors are realizing that Musk is a bluff and that Trump will not pay back Musk with any special favors or concessions. 

Musk Milked Trump

Between November 4, 2024, and December 18, 2024, Elon Musk's net worth experienced a historic increase completely unprecedented in human history. It was all thanks to Trump, or to Elon playing or milking the MAGA world.  

On November 4, 2024, the night before the elections, Musk's net worth was approximately $262 billion. By December 18, 2024, Musk's net worth had risen to around $486 billion. This represents an increase of about $224 billion, or approximately 86%, in less than 50 days. Musk milked Trump at an average rate of $4,666 million a day or $3.25M per minute! 

Trump Will Trump Tesla's Trump Bubble 

Knowing Trump as well as we all do, he must be livid seeing how much money Musk has made from milking his campaign contribution. Elon turned $277 million into $224 billion! Trump is not happy to see Musk profiting on his name and stepping so badly and boldly on his shoulders. 

Trump already began to pull the plug and pull the rug under Musk's feet. On his inaugural speech, Trump already backstabbed Musk stating that he will end the subsidies and preferential treatment for electric cars to let Americans buy the cars they want. Trump is big on fossil fuel and the drill baby drill doctrine that will not benefit the EV industry. 

The worst is yet to come for Musk in the ill-fated Trump Musk bromance. Musk is supposed to work for Trump now coordinating savings for the government. The savings will not materialize and everything will backfire. Trump will blame Musk. Musk will be upset feeling as Trump's immigrant scapegoat. The Trump Musk bromance will end in flames. 

Now you know it. Now you have superior business intelligence. Use it.

www.creatix.one


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