Telsa: The Sky Is(n't) Falling After the Price Cuts?

Investing Incrementally

The Sky Is(n’t) Falling After the Price Cuts?  Investing Incrementally

The stock market has taught us to think incrementally.  If a piece of news is worse than expected, it is a sale.  If better, a buy, almost regardless of price.  After all, the market is a daily discounting mechanism, so incremental news matters, right?  Well, I go back to the silliness of 2022 when SaaS companies “beat” and it caused the sell-side to raise their price targets and price-to-sales ratios through mental gymnastics to justify their ratings.  If the stocks did not rally on the “good” news it meant everyone was expecting those results and the valuation multiple finally was at levels that left incremental buyers uncomfortable.  Fair?  Well, what about Friday’s shocking price cuts by Tesla (Tezla like Musk pronounces it) in the US and Europe after the same was done in 4Q in China on perceived demand weakness.  Incremental disaster right?  Let’s discuss as you might very well be surprised.

C’mon, you must want to know what our analysis shows?