Grotesque stock valuations for companies.

[dirtywick]

their personal fortunes are tied pretty heavily to stock performance. probably a primary driver of the ridiculous valuations

 

[acbytesla]

their personal fortunes are tied pretty heavily to stock performance. probably a primary driver of the ridiculous valuations

It has little to do with building a productive profitable company as long as the stock price goes up. How effed up is that?

 

[dirtywick]

It has little to do with building a productive profitable company as long as the stock price goes up. How effed up is that?

unsustainably bad

imo it goes back to how index funds work with passive investing and dumb money. why build a productive company? nobody is even checking, just grab as much market cap as you can and enjoy the cash inflows. borrow against it, even.

 

[dirtywick]

think about meta losing $90b on the metaverse, a vr headset world where they sold fake real estate and they couldn’t figure out how to do legs so nobody had legs.

how does an ad platform have an extra $90b to lose with no fallout? that doesn’t make sense

 

[acbytesla]

unsustainably bad

imo it goes back to how index funds work with passive investing and dumb money. why build a productive company? nobody is even checking, just grab as much market cap as you can and enjoy the cash inflows. borrow against it, even.

I have to ask. Do we know what percentage of Tesla stock has been purchased through index funds? I'm of the opinion that much of America's issues are systemic and structural. The system we built rewards perception over almost everything.

 

[dirtywick]

I have to ask. Do we know what percentage of Tesla stock has been purchased through index funds? I'm of the opinion that much of America's issues are systemic and structural. The system we built rewards perception over almost everything.

i don’t have an answer to that. index funds make up a little more than half of investments today. just look at what musk is doing with the spacex ipo. rolls all his bad debt in, gives it a ridiculous valuation, special rules so he retains control of the company and pushes major indexes to bend the rules for early inclusion. it’s all right there, hold his bags

anyway i agree the problems are systemic. they control the market, they control politics, they make the rules. there’s no consequences, no reason not to.

and what are you going to do? not have a retirement? you can’t get a pension, you have to have money in the market. if you have a life and a job, it’s through a 401k, and guess what those are? passively handled index funds

oh is elon musk going to steal your retirement? maybe we should think about this a little more than oh we just hate rich people and don’t but if you don’t like it. or who cares? he’s going to space!

 

[acbytesla]

i don’t have an answer to that. index funds make up a little more than half of investments today. just look at what musk is doing with the spacex ipo. rolls all his bad debt in, gives it a ridiculous valuation, special rules so he retains control of the company and pushes major indexes to bend the rules for early inclusion. it’s all right there, hold his bags

anyway i agree the problems are systemic. they control the market, they control politics, they make the rules. there’s no consequences, no reason not to.

and what are you going to do? not have a retirement? you can’t get a pension, you have to have money in the market. if you have a life and a job, it’s through a 401k, and guess what those are? passively handled index funds

oh is elon musk going to steal your retirement? maybe we should think about this a little more than oh we just hate rich people and don’t but if you don’t like it. or who cares? he’s going to space!

Exactly. The wealthy in America own the politicians. They along with corrupt courts make the rules to appease their corporate masters. I tend to vote for Democrats. Not because the Dems are great. They are only marginally better.

 

[dirtywick]

Exactly. The wealthy in America own the politicians. They along with corrupt courts make the rules to appease their corporate masters. I tend to vote for Democrats. Not because the Dems are great. They are only marginally better.

i mean, they’re not white supremacist grifters but there’s always that one or two votes they can’t seem to get to ever get anything meaningful done. and i can guess why that is

it costs too much to win a federal campaign and campaign finance laws are as much of a joke as the rest of this is

 

[jeremyp]

It's not your money. Do you feel that Tesla's money somehow belongs to you? If Tesla wants do to that, why do you get to interfere? Who are you? If Tesla's compensation of its CEO bothers you, then don't buy a Tesla. Don't buy Tesla stock. Musk didn't take anything from you, dude.

When Musk sells stock, it's not Tesla's money, it's the money of external investors buying into Tesla. They are buying that stock off Musk at a vastly inflated price considering what the company is really worth on any rational scale. Not only that, many of the people buying it are not making a conscious decision to buy the stock because they are invested in index funds.

Also, when Tesla gives Musk shares as part of his compensation package, there are two ways they can do it. They can buy the shares on the open market (expensive) or they can issue new shares which dilutes the holdings of everybody else. Either way, it allows Musk to avoid paying taxes on his vast income.

 

[Gulliver Foyle]

I clearly look at this differently than Roger and Trausti. I have no problem with bosses making more than their employees. Even a lot more. That is; If that system produces a better living for us all.

You have to give the people at Tesla credit for solving the chicken and egg problem with EVs. EVs were never going to get off the ground without the charging stations. If Tesla hadn't done that, EVs would never have taken off. The lack of long distance travel would always be it's Achilles heel. They build a solid EV.

But the truth of that matter, their story today is more about protectionism than anything else. CATL, BYD, etc are kicking Tesla's ass on a global stage. It's only here in North America where they are frozen out. You can buy two quality Chinese EVs in Australia for the price of a Tesla. The average American makes more than most of the rest of the world. But the cost of living is also much, much more than elsewhere.

I look at China and I see a country building infrastructure that will serve it well for a century. I see the US building data centers that serves who exactly?

When I look at the US today, I see a nation that has lost its way. It squandered the prosperity of the masses to create a prosperity for a tiny few. The 1950s saw America build millions of homes, the interstate highway system and a bright economic future. We sent millions of GIs to college.
Many states provided free college tuition.

Today, we're re not building, or even maintaining our infrastructure. Instead, it's crumbling. And instead of a better America. It's a worse America. A dystopian mess led by a fascist and billionaires that could give a ◊◊◊◊ about the middle class.

I am of the opinion that the absolute maximum a boardroom level employee should make is twenty times the lowest level employee, contractor or employee of a contractor makes in relation to their work for the company. And that scale should slide depending on how many hours a month they work. And frankly, even at that rate, the vast majority of C-Suite bods will be grossly overpaid.

The only exception to this rule I'd allow is if the board member owns the company and built it from scratch.

PS on a lot of what the US built in the 50's, most of it was unsustainable and built not for the prosperity of all but to favour the ruling classes. Hence why infrastructually the country is in so much trouble now.

 

[jeremyp]

Exactly. And if Tesla crashes, who does it hurt? Certainly not Musk who has already walked away with 40 billion dollars.

It will hurt Musk. If Tesla's shares get anywhere near a sane valuation, the banks will start calling in Musk's loans. Tesla crashing has a good chance of bankrupting Musk.

 

[dirtywick]

Exactly. The wealthy in America own the politicians. They along with corrupt courts make the rules to appease their corporate masters. I tend to vote for Democrats. Not because the Dems are great. They are only marginally better.

Trump will bring 5 billionaires worth a combined US$870 billion on his China trip

President Trump invited a group of billionaires—worth a combined $870 billion, according to our estimates—to join him on his trip to China.

www.forbes.com.au

just as an example, trump bringing 5 billionaires with him to meet xi in china

 

[Darat]

And they will be worth over a trillion after the trip...

 

[acbytesla]

It will hurt Musk. If Tesla's shares get anywhere near a sane valuation, the banks will start calling in Musk's loans. Tesla crashing has a good chance of bankrupting Musk.

So? Ten to one Musk didn't personally guarantee a damn thing. His standard of living won't change one bit.

 

[Gulliver Foyle]

It has little to do with building a productive profitable company as long as the stock price goes up. How effed up is that?

Any economic system predicated on the idea of "line goes up" is doomed to failure.

Hence why capitalistic systems collapse on the regular, with an expected shelf life of 30 years.

 

[jeremyp]

So? Ten to one Musk didn't personally guarantee a damn thing. His standard of living won't change one bit.

Apparently, about half of his Tesla shares are pledged as collateral on personal loans. So yes, he is personally guaranteeing those loans.

You are probably right about his standard of living not changing, but he would lose control of his companies in that scenario.

 

[jeremyp]

Any economic system predicated on the idea of "line goes up" is doomed to failure.

Hence why capitalistic systems collapse on the regular, with an expected shelf life of 30 years.

The current Western capitalist system has been going for centuries. It's had booms and busts but it has proved remarkably resilient.

 

[TragicMonkey]

The current Western capitalist system has been going for centuries. It's had booms and busts but it has proved remarkably resilient.

Yeah...but for most of those centuries the wealth was real, backed by real things: land, gold, goods. These days so much wealth is purely imaginary: bits in a computer, promises on paper, fake money that doesn't actually exist, IOUs between companies that aren't worth what they say they are. The robber barons of 150 years ago actually had railroads, the actual barons of 300 years ago had farmlands and forests. If someone called their bluff and demanded they actually pay their bills they could do it. Too many of these "billionaires" we have today only have theoretical wealth.

 

[acbytesla]

Yeah...but for most of those centuries the wealth was real, backed by real things: land, gold, goods. These days so much wealth is purely imaginary: bits in a computer, promises on paper, fake money that doesn't actually exist, IOUs between companies that aren't worth what they say they are. The robber barons of 150 years ago actually had railroads, the actual barons of 300 years ago had farmlands and forests. If someone called their bluff and demanded they actually pay their bills they could do it. Too many of these "billionaires" we have today only have theoretical wealth.

Actually, not quite. Go read about the tulip bubble. Go look at the roaring twenties. There were sham after sham after sham. It was FDR that changed a lot of that. Sadly, since the 1980s they have been weakening the laws and regulations that put a bridle to unfettered capitalism.

 

[dirtywick]

i haven't seen anything near the amount of scamming that's happening in my lifetime. big and small, from facebook marketplace scams to pig butchering to crypto rug pulls to gambling apps to ponzi schemes to pump and dumps and frauds i don't even know the name of. plus, trump and his multimillionaire and billionaire buddies dismantled every consumer protection and financial investigative agency and ended white collar crime, then the riches guy on earth headed up doge and then stole everyone's social security information. what do you think is going to happen here? how do you think this ends?

there is no historical comparison imo