So this guy was pretty active in the TeslaQ community. They believed Tesla to be (extremely) overvalued in 2017-2019 on the grounds that they would never become profitable.. or something.
They lost a lot of money shorting Tesla.
https://www.reddit.com/r/teslamotors/comments/91aha1/montana...
Anyways, seems like he's keeping the grudge alive.
They were right about a couple of things back then. But majorly wrong in aggregate and with respect to the outcome.
To be fair, they were overvalued in those days as well. Just because the on-paper value went up doesn’t make their statements false, it just means we’ve continued the charade.
When I followed TeslaQ, the valuation was around 60b.
Today Tesla has 39b in accumulated retained earning (pr latest 10k, not q).
If the thesis was that Tesla would be unable to create a system that would churn out cars that could be sold at scale with an economic surplus, then we have to reject it.
To be fair, few could have anticipated that Tesla and Musk would be unaffected by valid scrutiny and criticism.
This is also addressed in the article:
> E. DON’T TRY TO SHORT SPACEX!!
> Elon Musk is a cult figure. Moreover, he has again and again proven himself immune to any meaningful market, legal, or regulatory scrutiny.
> Musk’s detractors have been correct about Tesla’s terrible fundamentals, its Full Self-Driving lies, its robotaxi fantasies, its shaky accounting. But when they have imagined these things might affect the stock price, they have been wrong.
All that.
But also he makes products so compelling that people who dislike him drives in them. "Fuck Elon" gotta be an all time top seller among bumper stickers.
> few could have anticipated that Tesla and Musk would be unaffected by valid scrutiny and criticism.
This almost implies that the scrutiny itself, and not the economic reality, should be the reason of Teslas demise or otherwise lesser financial outcome.
Which seems a little self referential.
If Elon doesn't wash his hands after peeing, and we pointed it out, that would be valid criticism. Ewww pee-hands.
But the economic reality and aggregate outcome wouldn't change.
Like not even if the frontpage of WSJ, The Times or FT said "eww Elon pee-hands".
And that the thing - with enterprises of this scale, you could always nitpick and find some things that are suboptimal. But we gotta see it in proportion. 100mm accounting error in Tesla is not the same as a 100mm accounting error in the local McDonalds franchise. For one the error is magnitudes larger than their real economic footprint. For the other it's a rounding error.
TL;DR:
I hear you - yes there is valid criticism. We just gotta see it in proportion.
I like Teslas cars. But I don't like pee-hands.
It's hard to know if SpaceX will flop in a week or in a decade but what I'm pretty confident on is a lot of retail capital allocated in Tesla will be redistributed to SpaceX.
So my trade on IPO day will be long $X SpaceX, short $X Tesla. Wait 1 month. Wish me luck.
An S-1 full of fantasies, insiders who will pocket millions, index companies that have changed the rules: it's all a recipe for regular people to have their pockets picked.
The point-to-point travel with starship is the one that urks me the most. It is completely unrealistic and will never happen. They have Zürich, Switzerland as a destination. There is no place in all of Zürich to facility such a thing, you will blow out every window in the city at each launch. Absolutely ridiculous that anyone would take this serious.
Also don't get me started on data centers in space idea...
When the Chinese land on the moon sometime in 2030 and the US still doesn't have a way to get there, will Elon finally reap the consequences for his lies or just the interim NASA admin that gave Space X the contract?
> When the Chinese land on the moon sometime in 2030 and the US still doesn't have a way to get there, will Elon finally reap the consequences for his lies or just the interim NASA admin that gave Space X the contract?
I liked Matt Levine's take in his latest podcast. You buy an index because you want to own the market. If you want to own the market in 2026 you want to own SpaceX and Anthropic, and probably OpenAI too.
That said, if you think this is as bad as the article claims you'll obviously buy SpaceX at IPO, then sell it when Index funds are obligated to buy.
> That said, if you think this is as bad as the article claims you'll obviously buy SpaceX at IPO, then sell it when Index funds are obligated to buy.
The price at IPO will obviously be influenced by expectations of a future purchase by index funds... as an analogy, if it became public knowledge that next week, 1,000,000 people would all be required to buy gold, the price of gold would go up today, not next week
By making inclusion near-certain and fast, the rule changes may actually reduce the post-IPO inclusion pop (it gets priced in at IPO) while increasing the IPO price itself and the volatility on rebalance day due to the float constraint.
This IPO marks and inflection point where a fund that tracks whole market value shifts in definition, because of the forced rush value nature of the rule changes.
If the fast entry rule changes hadn’t happened I would agree with you entirely.
The rule change where nasdaq adds a weighting factor to spacex's float is what causes distortions - it artificially increases the size of spacex's cap weight without actually having more shares.
Fortunately, this only affects indices that follow nasdaq, and from what i know, no other index is following this. That means it's "safe" to purchase a globally diversified, cap weighted index fund (safe as in the float isn't manipulated).
People talk of the demise of passive investing due to this, but most of the commentary fail to mention it's a specific, nasdaq thing and not a general change.
Why do index funds follow the exact companies in the index itself? Is it simply a branding thing? I’m buying into S&P500 because S&P500 is a highly recognized term used to mean “The US Economy”?
I feel that what this article is telling me is that passive funds are becoming active funds by way of manipulating the index itself. Kind of like if you’re passively invested in Brazil winning the World Cup but you can’t adjust the team or tactics, so instead you move the goal posts to where they’re about to kick the ball?
Pension funds seem more selective on the other hand. It’s always been the case that you can adjust your palette based on personal preference eg green energy, no weapons, tech stocks, etc.
> Why do index funds follow the exact companies in the index itself?
The fund itself is a financial product with a fee attached. Regardless of an index's perceived "quality" funds will always be created as long as there is investor demand. In recent years there has been an explosion of exotic "thematic" ETFs with exaggerated returns & comparatively higher fees. These tend not to attract the most sophisticated crowd. You can be sure they won't perform well into the long term.
> Is it simply a branding thing? I’m buying into S&P500 because S&P500 is a highly recognized term used to mean “The US Economy”?
Absolutely, it is 100% branding. For better or for worse S&P500 is the barometer of US economic health. There's every incentive to manipulate it to score political points.
This is just the dude that's famous for getting Tesla wrong constantly? If he's convinced it's going south it's probably an easy 100% gain from the IPO.
Well, the entire stock market is a world of thievery. Are you saying do not invest in any stocks and let your money rot in a savings account due to inflation?
There is no good financial advice which works for everyone[1]. A lot of people may make enormous money on the short term and bail out before the crash. Or it may be exact opposite.
My only real issue with SpaceX is that Elon has mastered the art of hiding real jewels (in this case the Starlink business) behind a whole pile of shit, and then forcing you buy the whole thing as a package.
Having X and Grok be bundled with SpaceX (muh datacenters in space) is like SolarCity on steroids.
With regards to the index discussion, my over/under on an ETF that tracks the index minus SpaceX is like two months post IPO.
It is reasonable to predict TSLA stock will, someday, drop to something roughly reflective of the value of the company. It has a long way to fall to reach that point, but, there's no reason to think it won't happen eventually. The market can remain irrational for a long time, but the facts are what they are.
Well, if Tesla gets merged into SpaceX at a record valuation (as was rumored is the intention recently), people with short positions would end up shorting SpaceX.
There are a lot of high stakes bets wrapped up in that company at this point already. AI, orbital launch business, communications networks, a little bit of Twitter/X, etc. And soon robots, grid battery, solar panels, electrical vehicles, autonomous driving, etc. They don't all have to work out to justify the combined valuation. Of course the facts are that quite a few of these lines of businesses are generating many billions in revenue already. It's at least a more diversified bet if a merge happens. Which might be why some share holders might prefer this. I don't have shares but I think that's a pretty rational attitude.
Still a risky bet of course. But betting that it will all fail might be the riskier one. Maybe it will just end up somewhere in between and not quite live up to expectations but still be a business generating lots of revenue with some healthy growth.
Apple and Microsoft seem to be doing okay after many decades. Edison is 200 years old and is on the stock market. It is about finding the right product that will last. Tesla could be one of them if it can survive the next decade.
AAPL and MSFT have a P/E an order of magnitude lower than TSLA whilst both having revenue growth % yoy in the teens. They both make over a $100b in PROFIT a year. TSLA's? $4b and shrinking btw. Their highest P/E's since 2005 was under 50. AAPL reached 100 in June 2003 (around the time of the iTunes Store release.. mid iPod era but pre iPhone).
Comparing with MSFT and AAPL makes TSLA look even more insane.
Most have their pension automatically track index. Nasdaq changes rules so that the pension funds are forced to buy stock while very volatile and likely overpriced.
- many funds owned by the public will buy this, so people will be indirectly invested and could lose money
- if this affects the economy, it will affect everyone
How is that supposed to answer the question? It seems like you completely ignored it and decided to share unrelated complaints, the things you describe are not even vaguely theft-adjacent.
All investments in equities carry risk of losing money. You also have a choice how much, if any, you are in the stock market and which stocks. As the market conditions change or the economy changes, it is your responsibility to manage your own investments.
This is stupid bait intended for financially illiterate readers, designed to resonate with the very common and reasonable anti-Musk sentiments.
Observe that almost all the complaints about what the indices are doing originate from outside of finance. It's very telling that the people who are complaining are not the ones putting their money where their mouths are.
If market participants didn't like what the indices are doing, they would simply reject it. Market participants absolutely do want this.
> Index funds are for people who don't want to know about the details and put the work in. They go by general recommendations.
Oh yes, all those poor giant institutional money managers who don't care about the details would be so shocked if only someone told them about this "rug pull".
>Now the underlying rules got changed, undeniably in favor and through pressure of few individuals.
This is ridiculous. The entire purpose of index funds is to reflect the market, the rules are being changed to enable the funds to better reflect the market.
Basically everyone who wants broad index funds wants this. If you don't want this, you simply need to look for a different product.
So this guy was pretty active in the TeslaQ community. They believed Tesla to be (extremely) overvalued in 2017-2019 on the grounds that they would never become profitable.. or something. They lost a lot of money shorting Tesla. https://www.reddit.com/r/teslamotors/comments/91aha1/montana...
Anyways, seems like he's keeping the grudge alive.
They were right about a couple of things back then. But majorly wrong in aggregate and with respect to the outcome.
To be fair, they were overvalued in those days as well. Just because the on-paper value went up doesn’t make their statements false, it just means we’ve continued the charade.
When I followed TeslaQ, the valuation was around 60b. Today Tesla has 39b in accumulated retained earning (pr latest 10k, not q).
If the thesis was that Tesla would be unable to create a system that would churn out cars that could be sold at scale with an economic surplus, then we have to reject it.
Or maybe that's just what value is, what someone else would pay for something.
To be fair, few could have anticipated that Tesla and Musk would be unaffected by valid scrutiny and criticism.
This is also addressed in the article:
> E. DON’T TRY TO SHORT SPACEX!!
> Elon Musk is a cult figure. Moreover, he has again and again proven himself immune to any meaningful market, legal, or regulatory scrutiny.
> Musk’s detractors have been correct about Tesla’s terrible fundamentals, its Full Self-Driving lies, its robotaxi fantasies, its shaky accounting. But when they have imagined these things might affect the stock price, they have been wrong.
All that. But also he makes products so compelling that people who dislike him drives in them. "Fuck Elon" gotta be an all time top seller among bumper stickers.
> few could have anticipated that Tesla and Musk would be unaffected by valid scrutiny and criticism.
This almost implies that the scrutiny itself, and not the economic reality, should be the reason of Teslas demise or otherwise lesser financial outcome. Which seems a little self referential. If Elon doesn't wash his hands after peeing, and we pointed it out, that would be valid criticism. Ewww pee-hands. But the economic reality and aggregate outcome wouldn't change.
Like not even if the frontpage of WSJ, The Times or FT said "eww Elon pee-hands".
And that the thing - with enterprises of this scale, you could always nitpick and find some things that are suboptimal. But we gotta see it in proportion. 100mm accounting error in Tesla is not the same as a 100mm accounting error in the local McDonalds franchise. For one the error is magnitudes larger than their real economic footprint. For the other it's a rounding error.
TL;DR: I hear you - yes there is valid criticism. We just gotta see it in proportion. I like Teslas cars. But I don't like pee-hands.
Grudge? I would say he was spot on. And he still is.
How exactly do those numbers add up in your mind?
At around $60B valuation sometime in 2018, how was TeslaQ spot on?
Are you maybe claiming that Tesla is lying in their current disclosures?
It's hard to know if SpaceX will flop in a week or in a decade but what I'm pretty confident on is a lot of retail capital allocated in Tesla will be redistributed to SpaceX.
So my trade on IPO day will be long $X SpaceX, short $X Tesla. Wait 1 month. Wish me luck.
How do you know that this isn't already priced by quant firms?
More like: why would you think it's not already priced in. Answer: I'm super special!
Musk's plan is to merge Tesla and SpaceX into one company.
An S-1 full of fantasies, insiders who will pocket millions, index companies that have changed the rules: it's all a recipe for regular people to have their pockets picked.
The point-to-point travel with starship is the one that urks me the most. It is completely unrealistic and will never happen. They have Zürich, Switzerland as a destination. There is no place in all of Zürich to facility such a thing, you will blow out every window in the city at each launch. Absolutely ridiculous that anyone would take this serious.
Also don't get me started on data centers in space idea...
When the Chinese land on the moon sometime in 2030 and the US still doesn't have a way to get there, will Elon finally reap the consequences for his lies or just the interim NASA admin that gave Space X the contract?
> When the Chinese land on the moon sometime in 2030 and the US still doesn't have a way to get there, will Elon finally reap the consequences for his lies or just the interim NASA admin that gave Space X the contract?
In all likelihood, neither.
And even that pales in comparison to their estimate of a $22.7T (T!) market for their AI "enterprise applications".
As a point of reference, the GDP of the United States is roughly $30T.
[dead]
The other stuff is bad, but surely "insiders who will pocket millions" is normal for an IPO?
it'll be a small from our pockets individually. but it'll add up to what elon needs.
this is the new playbook.
> this is the new playbook.
Same as the old playbook, just scaled up. Tesla got billions from state subsidies and selling carbon credits.
I liked Matt Levine's take in his latest podcast. You buy an index because you want to own the market. If you want to own the market in 2026 you want to own SpaceX and Anthropic, and probably OpenAI too.
That said, if you think this is as bad as the article claims you'll obviously buy SpaceX at IPO, then sell it when Index funds are obligated to buy.
> That said, if you think this is as bad as the article claims you'll obviously buy SpaceX at IPO, then sell it when Index funds are obligated to buy.
The price at IPO will obviously be influenced by expectations of a future purchase by index funds... as an analogy, if it became public knowledge that next week, 1,000,000 people would all be required to buy gold, the price of gold would go up today, not next week
By making inclusion near-certain and fast, the rule changes may actually reduce the post-IPO inclusion pop (it gets priced in at IPO) while increasing the IPO price itself and the volatility on rebalance day due to the float constraint.
yes! Michael Munger expressed it beautifully: "anything that is going to happen has already happened"
This IPO marks and inflection point where a fund that tracks whole market value shifts in definition, because of the forced rush value nature of the rule changes.
If the fast entry rule changes hadn’t happened I would agree with you entirely.
The rule change where nasdaq adds a weighting factor to spacex's float is what causes distortions - it artificially increases the size of spacex's cap weight without actually having more shares.
Fortunately, this only affects indices that follow nasdaq, and from what i know, no other index is following this. That means it's "safe" to purchase a globally diversified, cap weighted index fund (safe as in the float isn't manipulated).
People talk of the demise of passive investing due to this, but most of the commentary fail to mention it's a specific, nasdaq thing and not a general change.
Why do index funds follow the exact companies in the index itself? Is it simply a branding thing? I’m buying into S&P500 because S&P500 is a highly recognized term used to mean “The US Economy”?
I feel that what this article is telling me is that passive funds are becoming active funds by way of manipulating the index itself. Kind of like if you’re passively invested in Brazil winning the World Cup but you can’t adjust the team or tactics, so instead you move the goal posts to where they’re about to kick the ball?
Pension funds seem more selective on the other hand. It’s always been the case that you can adjust your palette based on personal preference eg green energy, no weapons, tech stocks, etc.
> Why do index funds follow the exact companies in the index itself?
The fund itself is a financial product with a fee attached. Regardless of an index's perceived "quality" funds will always be created as long as there is investor demand. In recent years there has been an explosion of exotic "thematic" ETFs with exaggerated returns & comparatively higher fees. These tend not to attract the most sophisticated crowd. You can be sure they won't perform well into the long term.
> Is it simply a branding thing? I’m buying into S&P500 because S&P500 is a highly recognized term used to mean “The US Economy”?
Absolutely, it is 100% branding. For better or for worse S&P500 is the barometer of US economic health. There's every incentive to manipulate it to score political points.
This is just the dude that's famous for getting Tesla wrong constantly? If he's convinced it's going south it's probably an easy 100% gain from the IPO.
That's not an argument for. Maybe we don't want to live in a world of thievery, or be thieves ourselves.
Well, the entire stock market is a world of thievery. Are you saying do not invest in any stocks and let your money rot in a savings account due to inflation?
What thievery happens in the stock market?
There is no good financial advice which works for everyone[1]. A lot of people may make enormous money on the short term and bail out before the crash. Or it may be exact opposite.
[1] Psychology of money
Falcon 9 proved SpaceX can deliver on hard engineering promises. Why isn't that track record factored into the business case here?
Is the argument that SpaceX the business fails, or just that the IPO price is disconnected from reality?
How much of the index fund manipulation concern applies to any mega-cap IPO, vs. something unique to SpaceX?
My only real issue with SpaceX is that Elon has mastered the art of hiding real jewels (in this case the Starlink business) behind a whole pile of shit, and then forcing you buy the whole thing as a package.
Having X and Grok be bundled with SpaceX (muh datacenters in space) is like SolarCity on steroids.
With regards to the index discussion, my over/under on an ETF that tracks the index minus SpaceX is like two months post IPO.
SpaceX a failure at 83% of mass to orbit. Yoikes.
83% mass to orbit of a market of what size? The valuation should absolutely reflect the size of market company operates in.
The launch business is impressive relative to the launch industry, but in terms of company capital value, it is a very small part of the company.
I'm rooting for SpaceX, but even I can see that there's some extremely dicey work being done to mask the enormous sinkhole of XAi (and Twitter).
This is just eds. Same guy here: https://en.wikipedia.org/wiki/TSLAQ
He's got some kind of beef with Elon and has predicted TSLA stock will crash many times.
It is reasonable to predict TSLA stock will, someday, drop to something roughly reflective of the value of the company. It has a long way to fall to reach that point, but, there's no reason to think it won't happen eventually. The market can remain irrational for a long time, but the facts are what they are.
Well, if Tesla gets merged into SpaceX at a record valuation (as was rumored is the intention recently), people with short positions would end up shorting SpaceX.
There are a lot of high stakes bets wrapped up in that company at this point already. AI, orbital launch business, communications networks, a little bit of Twitter/X, etc. And soon robots, grid battery, solar panels, electrical vehicles, autonomous driving, etc. They don't all have to work out to justify the combined valuation. Of course the facts are that quite a few of these lines of businesses are generating many billions in revenue already. It's at least a more diversified bet if a merge happens. Which might be why some share holders might prefer this. I don't have shares but I think that's a pretty rational attitude.
Still a risky bet of course. But betting that it will all fail might be the riskier one. Maybe it will just end up somewhere in between and not quite live up to expectations but still be a business generating lots of revenue with some healthy growth.
SpaceX is an even bigger scam, if that's possible.
This is like ANY company. What company will last forever. Not many.
Not every company trades at 387 PE on 2%-3% growth. I can't name any that do.
F sells an order of magnitude more cars (~$190 billion in revenue), and has a market cap of $62.8 billion vs TSLA market cap of $1.59 trillion.
TSLA is ridiculous. Any sane investor would look at those numbers and run as far and as fast as they can.
Somehow people will read this fact and say it's not overvalued because it hasn't crashed yet.
Apple and Microsoft seem to be doing okay after many decades. Edison is 200 years old and is on the stock market. It is about finding the right product that will last. Tesla could be one of them if it can survive the next decade.
AAPL and MSFT have a P/E an order of magnitude lower than TSLA whilst both having revenue growth % yoy in the teens. They both make over a $100b in PROFIT a year. TSLA's? $4b and shrinking btw. Their highest P/E's since 2005 was under 50. AAPL reached 100 in June 2003 (around the time of the iTunes Store release.. mid iPod era but pre iPhone).
Comparing with MSFT and AAPL makes TSLA look even more insane.
What is EDS. It's mentioned in the Substack comments as well.
How can a public sale ever be a theft?
Most have their pension automatically track index. Nasdaq changes rules so that the pension funds are forced to buy stock while very volatile and likely overpriced.
Those poor pension funds, unable to make their own decisions. Forced to keep all of their money in $NDX forever.
It must be terrible to be so utterly powerless.
Pension funds use (you guessed it) index funds like your average passive investor.
Sure we can hate pension funds but fuck the management of those indexes.
Maybe you didn't know this but:
How is that supposed to answer the question? It seems like you completely ignored it and decided to share unrelated complaints, the things you describe are not even vaguely theft-adjacent.
All investments in equities carry risk of losing money. You also have a choice how much, if any, you are in the stock market and which stocks. As the market conditions change or the economy changes, it is your responsibility to manage your own investments.
This is stupid bait intended for financially illiterate readers, designed to resonate with the very common and reasonable anti-Musk sentiments.
Observe that almost all the complaints about what the indices are doing originate from outside of finance. It's very telling that the people who are complaining are not the ones putting their money where their mouths are.
If market participants didn't like what the indices are doing, they would simply reject it. Market participants absolutely do want this.
I doubt your sentiment. Index funds are for people who don't want to know about the details and put the work in. They go by general recommendations.
Now the underlying rules got changed, undeniably in favor and through pressure of few individuals.
Where I come from, we call that a rug pull
> Index funds are for people who don't want to know about the details and put the work in. They go by general recommendations.
Oh yes, all those poor giant institutional money managers who don't care about the details would be so shocked if only someone told them about this "rug pull".
>Now the underlying rules got changed, undeniably in favor and through pressure of few individuals.
This is ridiculous. The entire purpose of index funds is to reflect the market, the rules are being changed to enable the funds to better reflect the market.
Basically everyone who wants broad index funds wants this. If you don't want this, you simply need to look for a different product.
How does one simply reject it? You make it sound oh so easy. As if the taxman is a made up idea.
What are you even trying to say? Where does the taxman enter into this?