The TSLA bubble has finally popped
Good morning fellow Daddy Musk fans, it's time we talk about what's happening with TSLA and why it's happening.
As many of you are by now aware TSLA has been in free fall for the past month blasting through multiple "support levels" and leaving a trail of loss porn behind. Now you may be wondering why your OTM weekly calls are going to zero week after week and I'm here to tell you it's not going to get better.
Let's take a journey aboard the modern day EV Titanic known as TSLA.
Disclaimer: This is fan fiction I write at night after I drop off my wife at her boyfriends place, not financial advice.
Before you blast my ass how TSLA shorts have been fucked every single time during the past years I'll explain to you why this time it's different. I'll start with a late 2019 quote from our autistic uncle Dr. Michael Burry.
"Passive investing has removed price discovery from the equity markets."
What does this mean? Well, the quote applies to the overall market but in the case of TSLA it means actively managed mutual funds with TSLA long positions have been replaced by passive index funds and ETFs. Passive funds have overtaken active mutual funds market share in the past 2 years. How the fuck does this relate to price discovery? It means for the past 2 years retards and degenerates like us have been piling money onto ETFs like Mommy Cathie's ARKK without actually doing any DD on what turds the ETF is actually holding. I know, the gains have been impressive with CNBC and Bloomberg praising Cathie's ETFs to the fucking moon. Fair enough, however let's take our lips off Cathie's tits for a second and look at what ARKK is actually holding.
Here's the punch line (taken from a random tweet yesterday):
Top 10 ARKK companies have a combined market cap of $1200B with revenues of $76B and earnings of $2.5B. If it was a single company it would be trading at 480x earnings, 16x sales with a profit margin of 3,3%.
Let that shit sink in before we move on.
Now back to the situation at hand. ARKK is down 25% in the past month and so are the other simp funds trying to ride Mommy Cathie's ass to the moon. Outflows from the ETF have accelerated in the recent month, which will cause Cathie to sell off her overvalued babies and dump them onto the street with TSLA being the biggest and most overvalued stock she's holding with a weight of 9,99% of ARKK. The outflows may cause overall liquidity issues for her fund, /u/seldomsage wrote a great post about this shit on r/stocks . Go read that shit to understand what's about to happen.
Let's leave the certified GILF alone and jump into a hot tub time machine back to December 2020. Our gay uncle Burry came out of the closet early December last year and stated he's shorting TSLA. Why? Well he recognized active players on TSLA had gotten out and short interest was extremely low (limiting any short squeeze risks, I believe it was around 5% of float). I believe after reading the 🌈🐻 erotica uncle Burry has been tweeting for the past months, the cocaine nosed HF suits on Wall Street started to pile onto his TSLA short. You can clearly see this in TSLA options chain, the put/call ratio and spiking short volume. It seems right now everyone and their retarded cousin is shorting TSLA. This will lead to a cycle where TSLA goes down, ETFs holding TSLA will go down, outflows from ETFs will continue and TSLA will go down even more. Thus, there's a chance TSLA will drag down the overall market with it.
In addition here's a list of smooth brained arguments why I think TSLA is still going down.
- The P/E is still 938. No fund manager with an IQ above 80 will touch this stock at these prices.
- The stock is at $597 a piece. Most of us work at Wendy's and don't have the cash to buy a single share.
- Call options are expensive as fuck, again, Wendy's.
- TSLA stopped taking orders for entry level Model Y. Together Model 3 and Model Y account for 90% of TSLA sales.
- Lithium shortage, probably related to point 4.
- Ford and Volkswagen. Particularly Ford Mustang Mach-E, which started eating away TSLA market share.
- The jig is up. Selling flamethrowers and tweeting memes wont make TSLA profitable any time soon, eventually the market will go back to the fundamentals and realize that TSLA is actually just a car company with low profit margins.
Lastly I'm not saying TSLA is a bad company or that the products are bad. In fact I think they're making great products, the company is just BIGLY overvalued at this point.
Related positions:
🌈🐻 TSLA puts ranging from $300P to $20P.
Have a great weekend and good luck next week!