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People wonder why there are sector crashes, and this is a good reason why.
Ever since Tesla became a successful, and highly valued(by market cap vs other auto makers) company recently, we see an increase in EV auto start ups IPO with insane run ups. Everyone wants you to think that they are the next Tesla, so better get in now before it's too late.
Fundamentally, nothing really changed. Tesla was the most shorted stock on the Nasdaq because on the surface it was a good short. There has never been a successful new auto company in the U.S in the past 100 years. If you look at the auto company grave yard, only two companies before Tesla remains, Ford and GM. (Chrysler was sold to Italians before bankruptcy). Right now due to this pandemic, even Ford and GM will be fighting for their survival since their loss Q2 was incredible. Elon Musk was fully prepared to lose all his investment. His only purpose for Tesla to exist is to show auto makers and the general public that EVs can be the superior propulsion system. It can also be cleaner and heathier for civilization even if it's powered by coal because the gas emitted is not at the tail pipe but away from city center where pedestrians are not around.
As Tesla is making a stock run because they made it through the other end by the skin of their teeth, many new EV companies are trying to capture the phenomenon. This reminds me of all the crypto coins that came out since BTC went nuts to 18k. Many of my colleagues went into the coin craze and lost money.
People need to understand, there's no other Tesla. Tesla is the only Tesla. They had all the stars aligned for them (such as zero EV competitors in the past decade) and only managed not to face bankruptcy because Elon Musk has a lot of credibility and ability to raise capital because of his success with SpaceX. No other CEO start ups can come even close to Musk, so the chance for their companies going bankrupt is in the high 95% range because it was "stupid squared" to start a new auto company before, it's still "stupid squared" today.
So when you hear these CEOs of other start ups (like Nikola) talking about how their stock is super cheap today (except it's not) because if they just make 5000 cars, their stocks would x10 and x20, they are just lying and taking your money so they can buy that 33 million dollar mansion. It frustrates me to see these retail investors throwing their hard earned cash at nothing but a hope and a prayer because some other entity became successful and they felt like they missed out. People need to stop and think. There's no such thing as free lunch so don't get duped.
This is another episode of why retail investors lose money.
EDIT **Was suppose to post this in the investor thread so if Mods want it moved.
Ever since Tesla became a successful, and highly valued(by market cap vs other auto makers) company recently, we see an increase in EV auto start ups IPO with insane run ups. Everyone wants you to think that they are the next Tesla, so better get in now before it's too late.
Fundamentally, nothing really changed. Tesla was the most shorted stock on the Nasdaq because on the surface it was a good short. There has never been a successful new auto company in the U.S in the past 100 years. If you look at the auto company grave yard, only two companies before Tesla remains, Ford and GM. (Chrysler was sold to Italians before bankruptcy). Right now due to this pandemic, even Ford and GM will be fighting for their survival since their loss Q2 was incredible. Elon Musk was fully prepared to lose all his investment. His only purpose for Tesla to exist is to show auto makers and the general public that EVs can be the superior propulsion system. It can also be cleaner and heathier for civilization even if it's powered by coal because the gas emitted is not at the tail pipe but away from city center where pedestrians are not around.
As Tesla is making a stock run because they made it through the other end by the skin of their teeth, many new EV companies are trying to capture the phenomenon. This reminds me of all the crypto coins that came out since BTC went nuts to 18k. Many of my colleagues went into the coin craze and lost money.
People need to understand, there's no other Tesla. Tesla is the only Tesla. They had all the stars aligned for them (such as zero EV competitors in the past decade) and only managed not to face bankruptcy because Elon Musk has a lot of credibility and ability to raise capital because of his success with SpaceX. No other CEO start ups can come even close to Musk, so the chance for their companies going bankrupt is in the high 95% range because it was "stupid squared" to start a new auto company before, it's still "stupid squared" today.
So when you hear these CEOs of other start ups (like Nikola) talking about how their stock is super cheap today (except it's not) because if they just make 5000 cars, their stocks would x10 and x20, they are just lying and taking your money so they can buy that 33 million dollar mansion. It frustrates me to see these retail investors throwing their hard earned cash at nothing but a hope and a prayer because some other entity became successful and they felt like they missed out. People need to stop and think. There's no such thing as free lunch so don't get duped.
This is another episode of why retail investors lose money.
EDIT **Was suppose to post this in the investor thread so if Mods want it moved.
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