TL;DR
Tesla’s 71% profit drop, masked by production cuts and hype, triggered a stock surge, trapping retail investors while insiders likely cashed out. Another case of history rhyming—will anyone learn?
Story
Tesla’s Q1 2023 earnings call revealed a 71% drop in profits—a bombshell masked by a post-market stock surge. How? Let’s dissect this theater of deception.
Like a sinking ship desperately bailing water, Tesla’s production outpaced demand. They built nearly 100,000 more cars than they sold, doubling their inventory.
‣ Inventory: The number of finished goods a company has on hand.
This echoes past crises like the 2008 housing bubble, where oversupply fueled artificial price inflation until the dam burst.
Elon Musk’s call, filled with political tangents, further fueled the smoke and mirrors. Did anyone mention the plummeting profits? Nope—the spotlight remained on Musk’s grand vision.
Meanwhile, retail investors, lured by after-hours stock pumps, loaded up on call options—bets that Tesla’s price will rise. These are likely the same folks who lost their shirts on meme stocks and crypto. History doesn’t repeat, but it rhymes.
‣ Call options: Contracts that give the holder the right (but not the obligation) to buy a stock at a certain price before it expires.
Impact? The average Joe, blind to the inventory glut and production cuts, buys the hype and loses their savings while whales cash out. The rich get richer, the poor get poorer. Sound familiar?
This isn’t just about Tesla. It’s about the systemic rot in a market rigged against the little guy. When will they learn?
Advice
Don’t fall for hype. Analyze financials, understand inventory levels, and remember: if it sounds too good to be true, it probably is.