Skip to main content

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


Comments

Post a Comment

Popular posts from this blog

When will the Tesla bubble burst?

December 11, 2024 When will the Tesla bubble burst?  We don't know Fools rush in. It's impossible to know exactly when the Tesla bubble will finally burst. Unfortunately for us at Creatix, we began shorting Tesla too soon. We are down almost 40% on our position as of today. We are not fooling ourselves thinking that we were ever make money on the short position. We truly doubt that Tesla can go down 40% any time soon.  We would love to add to the short position, but it would exceed our $3,000 limit on the stupid bets that we do for fun. We're not Mr. Beast. We have a very limited budget for ridiculousness. We would love to short Tesla tomorrow morning at the ridiculous share price of $424. Tesla is trading at an incredible 116 times earnings, which gives Tesla a market capitalization of $1.32 Trillion. Elon Musk added today $13.4 billion to his fortune. Yes, $13 billion in one day. Yesterday, he had added $11 billion. Yes, that's $24 billion in 2 days.  Six months ago, ...
Post a Comment
Read more

Are we closer to World War III after Assad's' fall in Syria?

December 8, 2024 Are we closer to World War III after Assad's fall in Syria?    Well, yes because World War III will be in the future and we are always closer to the future. Now, that future has not been created yet so it's impossible to predict it with full accuracy. Whether the world moves into WWIII after Assad's fall will greatly depend on what Putin decides to do. After all, Assad is hiding in Russia from where he could try to organize a come back. We should all prepare for WWIII. Sooner or later WWIII will be real. Perhaps we are already at the initial stages and have not realized it. a WWIII will most likely bring significant human suffering and significant technological advances. Who will win, how will WWIII play out? No one knows yet. The future has not been created yet.  In this post we take a quick look into Syria's history including who is Bashar al-Assad, and what may happen in Syria and the region now that Assad's regime collapsed and the dictator is i...
Post a Comment
Read more

What is the best deal for Panama?

February 1, 2025 What is the best deal for Panama? Trump wants the American Canal in Panama back. What should Panama do?  Panama should lease the canal to the United States. Panama can then hope that a future president can end the lease or renegotiate it in the future. Panama earns about $5 billion a year operating the canal. Panama should negotiate a lease with the United States that allows Panama to either earn or save about that amount per year. The lease may call for improvements to the canal paid by the United States. The lease may call for other economic concessions to Panama such as a special trade agreement, tariff exemptions, direct U.S. investments in Panama, fintech and cryptocurrency deals, etc.  Panama should see Trump's interest in the canal as a blessing in disguise and as an opportunity to enter into a strategic money-making deal. Panama should not see itself as a victim. The truth is that the United States built the canal and that the United States freed Panam...
Post a Comment
Read more