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11. september 2018 kl. 21:32

Már Wolfgang Mixa (marmixa.blog.is)

Tesla - Ofmetið? Já? Nei? Kannski?

Mikið hefur undanfarið verið rætt um fyrirtækið Tesla. Fyrirtækið sérhæfir sig í framleiðslu rafmagnsbíla. Markaðsvirði þess er í dag $47 milljarðar. Markaðsvirði Ford bílaframleiðandans er til samanburðar nú um $37 milljarða.

Afar margir fjárfestar hafa tekið skortstöðu í fyrirtækinu. Það felur í sér að veðja á að gengi þess falli á næstunni, öfugt við það að hagnast á kaupum bréfa sem hækka í virði. Ávöxtunarkrafa skuldabréfa fyrirtækisins hefur rokið upp undanfarið. Sú þróun er rakið til þess að áhættuálag á skuldabréfunum er að aukast til muna í ljósi þess að fjárfestar telja að hugsanlega ráði fyrirtækið ekki almennilega við endurgreiðslur á skuldum sínum.

Umræðan hefur að stórum hluta til snúist í kringum litríkan forstjóra þess, Elon Musk. Fyrir nokkrum vikum síðan sendi hann Twitter skilaboð þar sem hann staðhæfði að fyrirtækið yrði afskráð af markaði og keypt fyrir $420 fyrir hvern hlut. Gengi bréfa Tesla rauk upp í framhaldinu og „töpuðu“ margir skortsalar gífurlegum fjárhæðum, á pappír í það minnsta. Sú hækkun hefur síðan gengið eftir og gott betur, enda kom fljótlega á daginn að Musk hafði alls ekki tryggt sér fjármagn til að afskrá Tesla. Líklegt er að Musk verði ákærður vegna þessarar yfirlýsingar hans.

Musk gerði gott betur í síðustu viku með því að reykja hass í útvarpsviðtali, sem var einnig tekið upp á myndband og er vinsælt á youtube. Ör starfsmannavelta hjá framkvæmdastjórum fyrirtækisins þykir auk þess vera merki um að hlutir gangi allt annað en snuðrulaust fyrir sig hjá fyrirtækinu.

Hvað er það sem sumir fjárfestar telja að valdi því að hlutabréf séu ofmetin á hlutabréfamarkaði? Séu þau ofmetin þá er skýringin hugsanlega að hluta til rakin til atferlisfjármála (e. Behavioral Economics). Það eru ákveðnir þættir sem gera það að verkum að markaðsvirði fyrirtækisins (að mati þeirra sem hafa skortstöðu í fyrirtækinu) er komið út fyrir rökræn mörk. Almennt eru það ungir fjárfestar sem fjárfesta í Tesla, ekki ólíkt Bitcoin (sem er gríðarleg bóla í mínum huga). Sú framtíðarsýn sem Tesla veitir gæti hugsanlega verið að hafa áhrif á fjárfestingum ákveðinna aðila, rétt eins og með Bitcoin sem á að umbylta fjármálakerfinu.

Þórunn Andrésdóttir, fyrrum nemandi minn í atferlisfjármálum í HR, skrifaði ritgerð varðandi hugsanlega þætti sem valda þessu verðmati síðastliðið vor. Hún hefur veitt mér góðfúslegt leyfi til að birta hana og hef ég bætt henni við hér að neðan. Ég hef uppfært nokkur atriði og rétt er að taka það fram að ritgerðin er á ensku að því að námskeiðið sjálft er kennt á því tungumáli fyrir bæði innlenda og erlenda nemendur.

MWM

Tesla Inc. Overpriced? Yes? No? Maybe?

Tesla Inc., formerly known as Tesla Motors, was founded in 2003 by Martin Eberhard and Marc Tarpenning, American born entrepreneurs.  Eberhard was the chief executive officer (CEO) and Tarpenning the chief financial officer (CFO). The company was named after Nikolas Tesla, who was an American-Serbian inventor, an electrical engineer who is primarily known for his contribution to the current electricity supply system. Tesla Inc. was formed to develop an electric sports car that would run solely on battery power. Elon Musk, co-founder of PayPal, invested $30 million in the company and took his seat as chairman in beginning of 2004. In 2007 Eberhard resigned as CEO and Elon Musk took his place. (Gregersen & Schreiber, 2018)

In 2008 Tesla Motors released its first model, the Roadster. It was the first electric car to achieve 245 miles on a single charge and it could accelerate from 0 to 60 mph in under 4 seconds with a top speed of 125 miles per hour (Gregersen & Schreiber, 2018). Although the new electronic sports car was highly anticipated it did not live up to its expectations as the car received terrible reviews from various car journals. It was featured in one of the episodes of Top Gear. Jeremy Clarkson, Top Gear’s host, had certain remarks about the car like “It is a barely-running science experiment that couldn’t survive a full day on the Top Gear track” (Sorokanichi, 2016). Tesla eventually sold only around 2400 units of the Roadster. Elon Musk said that the Roadster was a good learning experience for the future (Brown, 2016). Tesla discontinued the production of the Roadster in 2012 and released two new models, the Model S and X, and sold nearly 30.000 vehicles in Q4 2017. (Statista, 2017).

Tesla Inc. (TSLA) went public on June 29, 2010 and thus became the first American car company to be listed since Ford Motor Company 1956 (Burns, 2015).  13.300 shares were offered at a starting price of $17 per stock (Hankin, 2017). For the first two years stock prices stayed around the initial stock price of $17 but by midst of 2013 the stock prices started to rise and by September 2014 the share price had risen to $291, which gave Tesla a market cap of $30 billion. Tesla’s stock prices were extremely volatile from September 2014 up until March 2015, prices have been on sort of a roller coaster ride, but since then the stock has been on a steady upstream ever since (DeBord, 2015). Today, Tesla trades around $280 per share (Yahoo Finance).

If you look at the surface of Tesla Inc. it looks as if it is a successful company with a bright future and an objective to save the planet with their electric super cars. Tesla has been named the second most valuable car company in America, second to Ford, with a market value of $47 billion (La Monica, 2017). If you look closely you might get a different image as all is not what it appears. Here we will compare Tesla and Ford, so we can get a clearer picture of the current situation. Reason for choosing Ford is that it is a major car manufacturing company in the United States and is also one of the main competitor of Tesla. On average Tesla has delivered 73.000 units of cars, both the Model S and X, compared to Ford Motor Company with an average delivery of 6 million units, per year (Statista, 2018). Net-income of Tesla Inc. in 2016 was -$674.9 million and -$888.7 million in 2015 and has only on two occasions had a positive net profit in their quarter reporting (Bhuiyan, 2017). In comparison to Ford had a net income of $4.6 million in 2016 and $7.4 million in 2015 (Nasdaq, n.a.). Interestingly, Tesla is currently trading at market value of $37B while Ford is trading at $47B.

Currently, Tesla is faced with issues regarding the production and delivery of the new    Model 3. Production delays have occurred due to manufacturing and process issues and rumours have been in circulation that Tesla is in need for capital for production to reach its full capacity. Tesla Inc. released mid 2017 that they would be producing 2,000 cars per week and increase that number to 5,000 per week in the start of 2018 and by end of 2018 or start of 2019 reach 10.000 cars per week. So far, Tesla has on average only be able to produce 1,190 cars per week, 12,121 in total (Halford & Randall, 2018).

This paper will attempt to explain the behaviour of investors using common know theories and concepts from behavioural economics. Hopefully these explanations and theories will shed light of what is it is that investors are so interested in Tesla Inc.  This paper assumes that the stock is overvalued but by no means tries to prove that is it so.

Heuristics

A common knowledge today is that attention and information is scarce and that is due to that fact that we as humans don’t have the time nor the focus to capture all the information that is represented to us. When we are put on the spot to decide we base those decision on information or factors that have grabbed our attention at some point in the past. This is known as heuristics and is one of the main topic in behavioural economics. (Tversky & Kahneman, 1974). Heuristics could be the cause of Tesla’s rise to success in the stock market particularly if we look at the following three types of heuristics; recognition heuristics, representation heuristics and availability heuristics

Tesla has gained a lot of media attention in the past years, thanks to Elon Musk, CEO. In 2017 he was listed as top 20 most influential people in the tech industry. Reasons for his mentioning was the electronic sports car, the residential solar power and, his latest project, the space rocket mission, SpaceX (Eadicicco, Fitizipatrick, Peckham & Pullen, 2017). The aim of SpaceX is to find a way to re-use space rockets and, therefore, reduce the manufacturing and launch cost with the mission to revolutionise airspace travel (SpaceX, 2013). With this amount of media attention Tesla receives it creates a massive buzz around the brand and it attracts attention and resides to the top of people’s minds, particularly the younger generation, who more frequently respond to this sort of media buzz. Buzz is when a company or brand is well known, or on the rise, and it becomes the thing that everybody is talking about, word-of-mouth. Younger investors, generation X and Y, seek out investments like that are buzzing particularly in the tech industry, that is new and exciting and companies that are socially and economically responsible (Sullivan, 2013). Tesla fits in with all those criteria and, therefore, it should not come as a surprise that is has gained all this popularity. This behaviour is a classic example of a recognition heuristic (Tversky & Kahneman, 1974). With the mass media coverage of Tesla, information and the buzz become very available to people and that also creates availability heuristics (Tversky & Kahneman, 1974).

Before Elon Musk joined Tesla as CEO he as one of the co-founders of PayPal. When PayPal was sold to eBay for $1.5 billion and Elon Musk, himself, gained $180 million from the deal (Kebnikov, 2017). The deal was widely covered in the media and that is what got Elon Musk on the radar. In the media he is portrayed as having superior knowledge about technology and how to build and run a successful company. When looking at all these aspects he appears to be a reliable and safe bet or as some would say that he is an example of representational heuristic (Tversky & Kahneman, 1974). From a marketing stand point it would be called as conditioning. Tesla is conditioned to be a successful company due to the fact that Elon Musk is the CEO. Conditioning (Schmajuk, 2008) is a behavioural process where are response becomes more frequent and or more predictable in a given environment due to a reinforcement. For example, when a dog sees or smells food it begins to salivate, which is a natural behaviour. In this scenario, the food is unconditioned stimulus and the salvation is an unconditioned response. If we add a bell ringing while food is presented to the dog repeatedly then after a while the dog will identify the bell ringing as an indication of food and he will begin to salivate even if there is no food being presented to him (Schmajuk, 2008). If we look at this regarding Tesla we can see that it has been conditioned in the minds of consumers and investors since Elon Musk is the CEO. For instance, Elon Musk became famous, and regarded as successful, after he sold PayPal. Later he became the CEO of Tesla and his fame and perception of success he carries with him to Tesla and people regarded Tesla in the same manner as Elon Musk. People were more convinced that the company would do well since Elon Musk was the CEO.

Herding and noise trading

History has a funny way of repeating itself. A common trend that occurs regularly in the stock market is whenever something new and exciting enters the market everybody shows interest. This is what we know as herding (Banerjee, A. (1992). A famous example of this behaviour was during the dot.com bubble. It occurred in the 1990s when many companies used the new-found Internet to increase their selling and market awareness. It was heavily invested and was considered perfectly reliable. Similar things happened when Tesla Inc. announced the release of the Model S. Tesla’s stock price rose rapidly after the announcement along with the positive reviews the car received. Model S was the first electronic sports car that performed like a regular petrol sports car. Tesla became the new shiny toy in the stock market that everybody wanted and thus the stock price rose to what it is today. The data that was provided at the start of the paper gave an overview of the current financial statements of Tesla Inc. From what we could see that it did not look promising but still traders invest heavily in the stock. This could be an indication of noise traders (Wang, 2010) who invest in trending stocks without basing that decision on any numerical data. As the stock price rises on this trending new stock, more and more noise traders invest, which might also be explained with regret aversion (Connolly & Jochen, 2012) as their fear of not being a part of this growing stock and new technology.

Conclusion

Tesla Inc. appears to be like a tech company that is trying to save the world with their revolutionary electronic sports cars but if one looks further into the numerical data it does not appear to be a sturdy company. Negative net-income, low market share in produced car and not meeting the needs of its customers. How can it be that Tesla´s stock prices just keeps on rising?

 Tesla is the sort of company that appeals to younger generations, generation X and Y. These generations are more aware of the environmental issues the world is facing and Tesla appears to be the type of company that is going to change the automobile industry as we know it. A common trait of the younger generation is that they very often want the same things and hence follow the same trends. Tesla fulfils both descriptions and that could be the result of the success it has received. The reason young investors invest so heavily in the company is because they want it to succeed and that could be the reason of its skyrocketing stock prices. Will Tesla succeed? Only time will tell.

 

References

Gregersen, E. & Schreiber, B. A. (2018). Tesla Inc. Retreived April 1st, 2018 from https://www.britannica.com/topic/Tesla-Motors

Sorokanichi, B. (2016). Elon Musk Admists to Shareholders That the Tesla Roadster Was a Disaster. Retreived April 1st, 2018 from https://www.roadandtrack.com/new-cars/news/a29378/elon-musk-admits-to-shareholders-that-the-tesla-roadster-was-a-disaster

Brown, A. (2016). Here‘s a look back at the Tesla car that started it all. Retreived April 1st, 2018 from http://uk.businessinsider.com/tesla-roadster-history-2016-3?r=US&IR=T

Statista. (2017). Number of Tesla vehicles delivered worldwide from 2nd quarter 2015 to 4th quarter 2017 (in units) . Retreived April 1st, 2018 from https://www.statista.com

Burns, M. (2015). A brief history of Tesla. Retreived April 1st, 2018 from https://techcrunch.com/gallery/a-brief-history-of-tesla/

Hankin, A. (2017). Tesla IPO: 7 Years On. Retreived April 1st, 2018 from https://www.investopedia.com/news/tesla-ipo-7-years/

DeBord, M. (2015). For 3 months in 2015, Tesla did something we‘ve almost never seen before. Retreived April 1st, 2018 from http://uk.businessinsider.com/3-months-2015-tesla-did-something-never-seen-before-2015-7?r=US&IR=T

Yahoo Finance. (n.a.). Tesla, Inc. (TSLA). . Retreived April 1st, 2018 from https://finance.yahoo.com

La Monica, P. R., (2017). Tesla is worth more than Ford – and GM is in sight. Retreived April 1st, 2018 from http://money.cnn.com/2017/04/03/investing/tesla-ford-market-value-gm/index.html

Statista. (2018). YTD Ford brand light vehicle sales in the Unites States as of February 2017 and 2018 (in units)  Retreived April 1st, 2018 from https://www.statista.com

Bhuiyan, J. (2017). Tesla posted a record quarterly loss of $619 million as it struggles with Model 3 production. Retreived April 1st, 2018 from https://www.recode.net/2017/11/1/16593134/tesla-model-3-elon-musk-production-q3-earnings-2017

Nasdaq. (n.a.). F Company Financials Retreived April 1st, 2018 from https://www.nasdaq.com

Halford, D & Randall, T. (2018). We built our own model to estimate weekly output of the car that could make or break Elon Musk‘s master plan. Retreived April 1st, 2018 from https://www.bloomberg.com/graphics/2018-tesla-tracker/

Tversky, A & Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases. American Association for the Advancement of Science, 185(4157), 1124-1131. https://doi.org/10.1126/science.185.4157.1124

Eadicicco, L., Fitizpatrick, A., Peckham, M. & Pullen, J. P. (2017). The 20 Most Influential People in Tech Right Now. Retreived April 1st, 2018 from http://time.com/4759416/most-influential-people-tech/

SpaceX. (2015). Reusability: The key to making human life multi-planetary. United States.

Sullivan, P. (2013). Younger Generations‘ Approach to Investing. Retreived April 1st, 2018 from https://www.nytimes.com/2013/09/21/your-money/younger-investors-approach-to-investing.html

Klebnikov, S. (2017). 8 Innovative Ways Elon Musk Made Money Before He Was a Billionair. Retreived April 1st, 2018 from http://time.com/money/4883868/8-innovative-ways-elon-musk-made-money-before-he-was-a-billionaire/

Schmajuk, N. A. (2008). Classical conditioning. Scholarpedia, 3(3). 2316.

Wang, A. (2010). Informed arbitrage with speculative noise trading. Journal of Banking & Finance, 34(2), 304-313. https://doi.org/10.1016/j.jbankfin.2009.07.019

Connolly, T. & Jochen, R. (2012). Regret aversion in reason-based choice. Theory and Decision, 73(1), 35-51.

Banerjee, A. (1992). A simple model of herd behavior. Quarterly Journal of Economics, 107, 797-817.

 

 

 

 

 

 

 

Már Wolfgang Mixa

Már Wolfgang Mixa

Lektor í fjármálum við Háskólann í Reykjavík.

Stýrði rannsóknum á fjárfestingum sparisjóðanna við gerð Skýrslu rannsóknarnefndar Alþingis um rannsókn á aðdraganda og örsökum erfiðleika og falls sparisjóðanna, 2013-2014.

Meðdómari í tveimur veigamiklum málum tengd fjármálahruni Íslands.

Einn af höfundum "Costco skýrslunnar" í samstarfi við Zenter rannsóknir.

Starfaði í 15 ár í íslenskum bönkum og sparisjóðum sem forstjóri, yfirmaður verðbréfasviðs, við lausafjárstýringu, eigin viðskipti (innlend og erlend hlutabréf & skuldabréf), sjóðastýringu (innlend og erlend hlutabréf & skuldabréf), eignastýringu, FX, miðlun verðbréfa, uppsetningu séreignalifeyrissparnaðar, uppsetningu millibankaviðskipta, uppsetningu erlendra verðbréfaviðskipta og greiningu á fjárfestingakostum.

PhD Business Administration - Háskólinn í Reykjavík 2016

MSc Fjármál fyrirtækja - Háskóli Íslands 2009

B.S.B.A. Finance - University of Arizona 1994

B.A. Philosophy - University of Arizona 1994

Löggiltur verðbréfamiðlari - USA 1996 og Ísland 2001

Greinasafn - http://www.slideshare.net/marmixa

Hægt er að skrá sig á póstlista með því að senda beiðni til marmixa@yahoo.com með "póstlisti" í Subject. 
 

Besta ráðgjöfin: "When there is a stock-market boom, and everyone is scrambling for common stocks, take all your common stocks and sell them. ... No doubt the stocks you sold will go higher. Pay no attention to this -- just wait for the (recession), which will come sooner or later. When this (recession) -- or panic -- becomes a national catastrophe ... buy back the stocks. No doubt the stocks will go still lower. Again pay no attention. Wait for the next boom. Continue to repeat this operation as long as you live, and you'll have the pleasure of dying rich." Fred Schwed, 1940

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