Elon Musk has been there before with Tesla, which is why betting against him is like betting against Mike Tyson in his prime.
But plenty of investors are, despite the dangers of counting out someone as battle-hardened in the trench warfare of exceeding Wall Street expectations.
One reason to back Musk is that Wall Street types who know him say he will soon be spending more time on Tesla and less DOGE-ing in the White House.
Another reason, he isn’t as crazy as he sounds.
All you have to do is follow Musk’s X feed a bit to know why his moniker on Wall Street, “Crazy Elon” has some salience.
Yes, he’s a little off, and also brilliant.
Tesla, even its critics concede, makes a great electric vehicle.
It’s Tesla stock (which Musk’s massive net worth is tied to) that is giving him — and longtime investors — headaches.
For starters, it’s expensive.
The average PE ratio of stocks in the S&P is about 20 to 25 times earnings. Tesla trades at 122 times.
Price-earnings ratios don’t tell the whole story about valuation, but they do provide a gauge of irrational exuberance.
That means there are always traders looking for reasons to sell. It doesn’t help that if you watch TV news, it seems like just about every other hour there’s a Tesla being set ablaze in yet another act of woke domestic terrorism over Musk’s DOGE-ing the federal budget.
Lefty tree-hugging customers, meanwhile, are not buying his EVs for the same reasons they’re firebombing his cars: The former liberal-turned-MAGA is an apostate to the progressive cause.
The most pressing problem for the stock: Investors who still love Musk and his product hate that despite running Tesla, SpaceX, Starlink, and X, he appears to be spending day and night in the White House as President Trump’s “first buddy.”
Yet there’s a good case to be made that you would be crazy throwing in the towel on “Crazy Elon.”
I covered his infamous “funding secured” misstep back in 2018 when the stock was also in the doldrums. He claimed he had a buyer for Tesla at $420 a share, a significant premium.
No ‘secured’ deal
Then the you-know-what started hitting the fan.
Securities regulators said he didn’t have a “secured” deal, the sly pot reference notwithstanding. Regulatory problems ensued.
All of this overshadowed Tesla’s bigger issues: Smart short sellers were betting against the company’s survival over massive troubles with the production of his EVs.
Musk himself conceded Tesla was flirting with bankruptcy.
Those days are long gone, no matter what the company faces today.
Sure, the stock is down 34% year to date, about the same period of time Musk has been DOGE-ing.
But it’s up by about 45% over the past year.
Since those dark days of 2018, it’s up more than 1,000%.
Prominent Tesla analyst Dan Ives, a bull on the stock, says Musk will soon cut back on his DOGE-ing to focus back on his baby.
Ives also likes Tesla’s future. More automated factories producing cars faster, the Cybercab coming next year and a semi-truck factory on schedule to be completed this year.
If you followed Musk for long enough, that might be tough to bet against.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
