The Probability of Tesla Going Bankrupt

Never take advice from someone who doesn’t have to live with the consequences. With every other media outlet talking about Tesla (TSLA) blowing up, that’s precisely why it’s worth taking a closer look at the value on offer. Properly assessing the risks associated with a stock requires one to leave ethnocentric political beliefs and the propensity to engage in petty bickering at the door. Successful investors are opportunists who look past all the noise and emotion to find deep value in places others are afraid to look. And in today’s bear market, surviving is equally as important as thriving.

Pointing to the decline in Tesla’s share price without including a benchmark is a rookie move. Here’s a year-to-date performance for Tesla using several benchmarks.

  • Nasdaq Tracker ETF: -32%
  • Google: -37%
  • Tesla: -57%
  • ARK Innovation ETF: -66%

Even accounting for ARK’s ETF holding a 7.5% weighting in Tesla, it’s still a basket of tech stocks that’s down -66% year-to-date. To say that Tesla stock is crashing seems like an overreaction, especially when you take into account their high beta. A higher beta stock is expected to move more dramatically than the benchmark. When shares were going to the moon, nobody had a problem with the high beta. But when they see the same movements on the dow

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