Model does not consider non-ergodicity

[lucadellanna]

Tesla might post great 2023 numbers but, if it bankrupts on the way there, its (current) stock goes to $0.

The current price of CDS imply a >40% chance of bankruptcy over the next 5 years.

I do not see it priced at all in your model.

A good way to implement it would be to take the share price as computed from 2023 operations and to weigh it with a 40% possibility of having it stuck to $0.

[ascott5]

I agree that y-o-y cash needs aren't adequately addressed. If a metric like EBITDA R&D is going to be used, more attention needs to be paid to FCF.

[jacobllcc]

Current prices Tesla anything are not necessarily accurate. The question is if they will go bankrupt. The way I see it, and wouldn't be surprised if ARK does too, is that Tesla has ample opportunity to raise capital at attractive rates from a suite of investors, and this would be welcomed because it could increase growth.

[lucadellanna]

What you write is accurate, but should be filed under "bull case".

The whole point of the "bear case" is to consider what could go wrong.