It bails out Elon and means his Tesla shares (borrowed against to purchase Twitter) won’t be liquidated as Tesla’s share price continues to decline, using xAI investor funds. He uses hype and sentiment (inflating valuations) in the capital markets to always stay slightly ahead of consequences.
Sure, but it's becoming increasingly obvious to everyone that the American car industry is in major trouble. In a decade, I'm confident in saying a lot of American car companies will not exist.
We see it in our day-to-day lives. People aren't buying new cars. Cars on the road are getting older and older. Views of Tesla continue to dwindle. Anything Stellantis is on life support. I mean, Chrysler has literally one car. GM is clawing for any sort of relevancy. And Ford is only afloat because of toxic masculinity. We all know that it's bad in the US, and we know outside of the US it's 100x times worse for these companies. We also know the US car market as a market is getting overshadowed.
It doesn't matter what stupid investors think. We can see the writing on the wall. These investors are delusional, period.
Tesla shares are higher than when Twitter was acquired. 'Continues to decline' sounds like weasel wording that the media likes to use to push a narrative that doesn't exist.
Edit: Comment flagged for pointing out inconvenient facts, it's wild out there
You forgot to mention that China, Vietnam, Thailand, and Indonesia are all betting big on EV production. China is of course the main competition, but it's telling just how stiff the competition is getting across the board. BYD is currently making more cars than Tesla, with more advanced battery technology and comparable build quality, for a fraction of the price of any Tesla.
Meanwhile Elon is too busy rage-tweeting and K-holing to work on any of the things Tesla promised it would do this year, like release a model 2 or something with robots
The auto tariffs are a present for Elon. Teslas are the most American of American cars, and while they do still use foreign parts they use the least out of everyone.
On top of that, in the EV category, Tesla is pretty much the only one made in the US.
Why would they continue to decline? If all that information is already known, why isn't it priced in and why isn't the best estimate of Tesla's price in 6 months equal to today's price plus the return of Treasuries?
Tesla's current P/E ratio is 134. To be a rational Tesla investor, you'd have to think it has almost 600% profit growth potential to reach the long-term American blue-chip average P/E of ~20.
That kind of growth would be difficult for a new entrant, but for an incumbent that's been around a while and already seeing sales decline, it's a pipe dream. Of course, it's not all about cars for Tesla. They're betting big on humanoid robots and "full self-driving", although they've been stuck at Level-2 self-driving for years and the robots, well... Let's just say we don't hear much about them for a reason.
Of course, Tesla has never been a company for rational investors. I used to hold a lot of Tesla stock back in 2017-19 when they had plenty of doubters. I remember seeing how Tesla owners would organize themselves grass-roots-style to show off their cars and convince others to go electric. The company was getting a ton of free marketing and had a very devoted customer base. My, how things have changed. Now, they have to shut down showrooms across the country due to "terrorism".
So where is the upside? Well, protectionism could help them in the US market, but they're a global company with stagnant sales in the US, so it's hard to see tariffs helping more than they'd hurt. And that's pretty much it for upside AFAICT.
It's true that Tesla shares recently declined, but the context is important: during 2022-2024 Tesla shares were trading between $100 and $300 (with high volatility), in October 2024 they were at $200-$250, then after elections they skyrocketed to the all time high of $488 (for no fundamental reason), and since then the stock is falling. It's $263 right now - after the latest declines the stock only returned to the price that's still higher than before the elections, and is higher than the 2022-2024 average (which was already unreasonably high and totally disconnected from earnings). So these declines are nothing, at least not yet.
FWIW there was a fundamental reason for shares to spike after the election: The elected regime was one that is very corrupt and self-serving, and was likely to do everything in its power to make money flow towards the companies it owns.
By now, though, it's seeming more like they're too incompetent to do that. They'll probably still do it, but they'll crash the whole economy at the same time so the money that's flowing to Tesla won't be worth a whole lot. But it was a reasonable prediction at the time.
That's fine if that is the argument (11/5/2024 vs today) vs all the gains since that period lost, I'm not willing to argue the point to death, the brand value destruction will continue. The fundamentals will catch up to the price eventually with enough pressure.
NVDA? Not yet, but certainly CoreWeave based on their IPO outcome [1]. TSLA made me very wealthy from IPO to when I exited, my "crocodile tears" are "Elon is a terrible human attempting to destroy democracy and something should be done about that." If you disagree, we have nothing to discuss, there is nowhere to meet in the middle on that. I have no strong preference how he is disempowered and prevented from using his wealth and power to harm.
"Are you just mad he is a powerful bully?" Yeah my dude, that is the problem. If it is a crime to not like people who hurt others with their power, guilty as charged, unapologetically. Am I supposed to feel bad about that position? I do not.
“Continues to decline” is a cushion for the next sentence “downgrade to sell” which cushions you from the ultimate, “new marketing leadership with Barron Trump and someone named Alien Brainrot”.
After the unprecedented move of the President of the United States anointing Musk as a made man and member of Donalds swamp, all from the White House. In additional multiple other highest members of Trump's government went on TV and said 'invest in Tesla'. That is not a healthy stock surge. It is a pure DC swamp play.
What do you mean by this? Do you not agree these events happened in an attempt to bring the stock back up? That government officials gave stock advice on TV that would cost financial advisors their licenses, for the benefit/as a favor to Musk (a billionaire), the very definition of DC swamp behavior, government officials doing illegal/immoral favors for their rich sponsors.
Not to be pedantic, but you’ve confused acceleration with velocity. How far you’ve traveled will depend on how long you’ve been falling, and what your starting velocity was.
Still, you have to give it to him, it works, and this has allowed him to do some incredible things beyond just hype.
What he's pulled off with xAI more recently is really quite incredible. And obviously this isn't first time Elon proved he can execute better almost anyone else.
I don't really have opinions on him as a person, but as a an entrepreneur you cant flaw him imo. He always finds a way to beat the odds.
>"He's a terrible human, but look at the model benchmarks!"
That's basically the response to deepseek? Aside from a few people pearl clutching about "chinese propaganda" or whatever, most people praised its efficiency and performance on benchmarks. Credit where credit is due. Also note that China is an authoritarian regime where there's no separation between the state and private enterprise. Every company of non-negligible size has a CCP committee inside of it.
You don't have to meet someone to know they're awful. I've never met Adolf Hitler - but I'm pretty confident he's an awful person.
Elon Musk uses his immense wealth to cheat. He's infiltrated the government and uses his power to directly harm Americans, in order to further enrich himself. In addition, almost everyone who has worked for him has corroborated that he is an awful boss.
He is also prone to dishonesty. When confronted with something that requires accountability, his strategy is to protect his lies with newer lies. FSD, the state of twitter, DOGE, and on and on. He is so dishonest that it's almost always safer to assume he is lying than to give the benefit of the doubt.
But, even on a personal level, he struggles to stay afloat. He has impregnated multiple woman and is practically forming an army of illegitimate children. Those who were close to him either speak of him with extreme disdain or not at all. The only child he has any connection to is used as nothing more than a political pawn.
The only reason anyone even thinks he might be okay is because he's rich. We tend to have an extreme bias in favor of the wealthy, almost akin to a brainwashing. The reality is being rich does not correlate with being moral or decent. It doesn't correlate with being intelligent either, but that's a separate conversation.
I know I'm late to reply, but to explain since many people seemed to be confused by what I said –– I think the speed at which xAI has caught up with the competition from nothing is quite impressive, and the lengths they had to go to to do this, even more so.
Grok is now competitive with the other big players in the foundation model space. To do this they had to recruit some of the top AI talent, speed run the building of massive AI data centers and of course execute well to bring it all together.
All of their competition have either had a time and/or financial advantage over xAI so it's quite impressive what they've managed to achieve given this. Deepseek's achievement in this sense is more impressive so I'm not delusional, but I was still very surprised to see how good Grok 2 was.
Weren't they already doing that? I recall before I bailed from X/Twitter they already added an AI training consent toggle, which silently defaulted to "I consent" for all existing users of course.
> I recall before I bailed from X/Twitter they already added an AI training consent toggle, which silently defaulted to "I consent" for all existing users of course.
There's a solution for that: build a Twitter bot that posts strange things.
I don’t really see how X data, being riddled with spam and bots, is all that uniquely useful to an AI company. Even if it was, it’s not all that clear that access to data is a defensible moat.
So he can use the funds he raised for xAI to pay out the lenders for the initial Twitter purchase? Otherwise the lenders are just getting xAI stock (all stock deal) which I assume is illiquid?
A stock ponzi scheme to keep him afloat? Soon he will start a new venture and use that venture to save the previous venture and so on. Maybe a robot clothing company because robots shouldn't be naked.
Seems like anyone who has three "shares" of X now has 1 share of xAI+X, which by Musk's valuation is three times as valuable as X. Assuming the xAI share price is wildly inflated, it seems that the inflated valuation has devalued their actual holdings.
Eg, for an extreme example, if xAI is worth zero, their actual holdings are now a third of what they were.
And he scammed the taxpayers of New York State for a billion dollar factory to build solar roofs. Factory built, stock was pumped, no solar roofs though.
The puffery about waste and fraud is pure projection coming from a scammer like Musk.
Who also talks like Sam Altman that the human race will need to all be on welfare (Universal Basic Income) because of AI.
I don't understand it all ...cut people's jobs who make multitudes of billions less (cut 25k probationary employees like ripping off a band-aid), want people to work like the Chinese do (day and night) so we are the leader in AI (?) and after AI starts replacing jobs we all need to be on a welfare system. Isn't a welfare system the biggest waste to the Republican party (independent here)?
Does he even know his end game with all this or he's just having fun be the most powerful person?
The only profession where there is a legitimate case for the "cannot drink in free time" requirement is Emergency medicine physicians. And even among physicians, they are some of the highest paid specialities. For most other cases it is simply the company trying to extract as much juice as possible from the existing working staff.
if you can’t beat the Kenyans then join them
Zane Robertson famously moving from Hamilton in 2007 at age 17, along with his twin brother Jake, in part to escape bullying and a broken family, to live and train in Kenya with the hope of mixing it among the best distance runners in the world.
A lot of these runners come from ethnic groups which live in highlands and mountains: extensive aerobic training in lower-O2 environments, then competing at standard elevations, seems to be the most important advantage: https://www.researchgate.net/publication/225064362_Kenyan_an...
There is probably a minor genetic component, microevolution promoting higher hemoglobin/etc than average, similarly to many Tibetans. But childhood conditioning seems to be a more powerful effect.
I'd wager there's probably a social factor too: if for any reason a given population is slightly better at X then X becomes more popular which leads to more support, more practitioners and in turn this becomes self-reinforcing.
Rugby in New Zealand is a good example of this. Our small country with a small population is (and basically always has been) one of the top teams in the world.
Not only at the elite level, but our junior teams and even school teams perform well on the world stage.
Like you say, that social factor plays a huge part in it. Support, funding, etc etc
India has 1.4bn people. It is honestly weird they are not dominating in more sports. Once they really move out of being a developing nation and spend more on frivolous pursuits like Olympic medals I bet they will do just that.
It's mostly cultural. Your parent's background deeply impacts your own and your relationship to education, science culture. Read Bourdieu if you haven't already.
Its actually 60-80% heritable. The twin adoption study showed that twins raised in different environment have the same IQ. It also makes sense logically; why would only physical characteristics be heritable and not mental ones.
>Read Bourdieu
"Bourdieu contended there is transcendental objectivity, [definition needed] only when certain necessary historical conditions are met."
You're saying "60-80% heritable" as if that meant something. But you're also wrong: not only do separated twins raised in different SES settings have differing IQ results, but the heritability of IQ itself (whatever its cause) is also SES-dependant.
recent studies showing heritability for IQ as high as 80%.[8] IQ goes from being weakly correlated with genetics for children, to being strongly correlated with genetics for late teens and adults."
Bouchard, Thomas J. (7 August 2013). "The Wilson Effect: The Increase in Heritability of IQ With Age"
This doesn't respond to what I just said. Heritability is not evidence of genetic determinism. It makes sense that age would amplify both any extant genetic influences on intelligence, and any gene-environment interactions, while minimizing shared environment facts. The basic idea of "heritability" isn't in question; the genetic determination and fixity of intelligence is.
Heritability is genetic determinism. It's not like you get a different set of genes as you age. Are you indirectly saying that the genes responsible for physical characteristics follow different rules than the genes responsible for intelligence? Like could your environmental factors change your height? I would say maybe it is something in the middle like the genes determine your maximum potential in physical and mental expression.
No, it very obviously is not. This isn't something we need to argue; you can simply go look it up. The number of fingers on your hands: not very heritable. Whether you wear lipstick: very heritable.
You can set your watch to people on message boards making arguments about the genetic determination of intelligence that rely almost entirely on heritability statistics. It seems pretty clearly to be a cargo culting phenomenon; how else could you have very specific heritability numbers without even knowing what the term means? I'm curious where you got it from.
Heritability means that parents having a trait explains, in a statistical sense, some amount of how much a randomly chosen person has a trait. So some of heritability is genetics and some is the shared environment.
For example, someone is quite likely to speak the same first language as their parents, and for this reason, the statistics for heritability come up with a high number for how heritable a trait first language is. But this isn’t because of some English-speaking gene, it’s because lots of environmental conditions are common between parents and children.
The intuitive reason that the number of fingers on your hand is not heritable is because lots of the variation comes from injuries which are not explained very much by whether one’s parents lost fingers from injury. Genetic causes for an unusual number of fingers are much less common than accidents and so can’t cause much of the variation that is observed across a population.
Because it is quite reasonable to get a high heritability number for something that is not genetically determined (and a low number for something that is), one cannot really argue anything about genetic determinism from heritability numbers.
>some of heritability is genetics and some is the shared environment.
This is not the definition of heritability you are mincing words.
Heres the definition of heritability:
(HAYR-ih-tuh-BIH-lih-tee) The proportion of variation in a population trait that can be attributed to inherited GENETIC factors.
>For example, someone is quite likely to speak the same first language as their parents, and for this reason, the statistics for heritability come up with a high number for how heritable a trait first language is.
you are conflating inheritability with heritability.
The reason we are able to have crops that yield more is because we genetically modified them to do so; not because we grew wild corn in the perfect environment.
You're lost here. Heritability is defined technically as h^2 = V_a / V_p, with V_a additive genetic variance and V_p phenotypical variance. Look at your hands. The number of fingers on it are extremely genetically determined; the Hox genes that define your body plan are very conserved. V_a is practically zero. But plenty of people have fewer than 5 fingers, and some are born that way (for instance, children exposed in utero to Thalidomide); V_p is nonzero. Evaluate the expression (0/nonzero).
If you read your own words carefully, you're trying to rebut the parent commenter with their own argument.
You cited this reference up thread: "The Wilson Effect: The Increase in Heritability of IQ With Age". It should give you pause for your definition of heritability that this paper is saying it changes with age. As you point out a couple of comments later, genes don't change with age.
If you're going to cite heritability numbers, you have to use the technical definition of heritability (which is what these papers are using).
(HAYR-ih-tuh-BIH-lih-tee) The proportion of variation in a population trait that can be attributed to inherited genetic factors.
The study title is saying that heritability INCREASES with age: as you age your IQ is more closely correlated to the IQ of your parents from whom you inherited your genes from.
>As you point out a couple of comments later, genes don't change with age.
Your genes dont change but the correlation between you and your parents IQ does.
You're not making sense. If heritability means genetic determination, as you say it does, and genes are fixed at birth, then heritability can't change as you age.
None of what you're being told is first-principles axiomatic reasoning. This is all stuff you can just go look up. You got so close with that Wikipedia definition of heritability! All you need to do now is understand what those words mean.
Correlation is not causation. Generally, adoptive families in these studies come from similar socio-economic backgrounds [1].
With your theory, how would you explain adopted refugees children doing much better at IQ tests than they would have if the stayed in their home countries?
Also dismissing Bourdieu as a midwit? Yeah, ok. Come back when you actually want to expand your world view.
From your own low-effort wikipedia 1st google result link:
" recent studies showing heritability for IQ as high as 80%.[8] IQ goes from being weakly correlated with genetics for children, to being strongly correlated with genetics for late teens and adults."
Bouchard, Thomas J. (7 August 2013). "The Wilson Effect: The Increase in Heritability of IQ With Age"
As for Bourdieu:
"Bourdieu was in practice both influenced by and sympathetic to the Marxist identification of economic command as a principal component of power and agency within capitalist society."
"According to Bourdieu, tastes in food, culture and presentation are indicators of class because trends in their consumption seemingly correlate with an individual's place in society."
If both of these were true you would never have class mobility. I do well for myself but still like hamhocks and beans.
"I like beans but I'm rich, checkmate". You're an idiot.
People do not grow up in isolated vats, and social class is one of the largest influence on one's life. Obviously there are exceptions, not 100% of your life is determined by that. If you can't even fathom how your social class might inform your taste on red wine and such then I don't see what more we have to talk about. Goodbye.
Out of curiosity, why cannot hospitals fund residency slots on their own with some riders (the resident should work in the same hospital for x years)?
It seems odd that the medical profession is not willing to invest in the training of the next generation of professionals without government help.
They do sometimes. People don’t realize how much of medicine, generally, is funded through the government. Additionally, society gives medicine a lot of leeway to act selfishly because the core practice of healing is so altruistic.
Broadly, it’s the same issue that all jobs have: it’s cheaper to hire pre-trained professionals than to hire and train.
Because they need to support their executives and capital projects / debt service. That’s the discretionary budget… training doctors doesn’t improve the bottom line.
Hospitals are really quasi-government entities. Their pricing structures have price controls based on Medicare reimbursements. A third of hospital revenue is Medicare and Medicaid.
Both programs have been slowing rate growth, which in turn impacts private insurance as well. The institutions haven’t been successful in reducing cost growth. ACA built out regional cartels^H provider networks, essentially eliminating competition.
With all their talk of campaign finance reform, it is not clear to me why the DNC does not finance their most valid primary candidates? Why make them jump through hoops and raise money to stay in the race between the primary elections?
No. I want the DNC to provide some basic money all valid candidates (say those who get above certain percent of votes) so that they can spend their time making their case to the primary voters, instead of trying to raise money.
In the end, it is the primary voters who will pick the candidate who will run for presidency.
Another exciting cold war thriller is the Devil's Alternative.