The Tesla bubble has sprung a leak

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Today's Agenda

Tesla Loses Altitude

Tesla's stock price, a mammoth, soaring zeppelin filled with helium and wishes, has sprung a leak. Yet it's still got plenty of gas and hope to spew.

The electric-car maker has been a market idol all year, lagging only Zoom Video Communications among the Nasdaq 100's biggest winners. We're all on Zoom these days, so its rally makes sense. We're not all in Teslas. Maybe we should be; however we might feel about Elon Musk's antics, we should all root for electric-car makers, unless we're just big fans of environmental catastrophe. The trouble for Tesla is that other car-makers exist and are working hard to make their own electric ones. General Motors may be nobody's market idol, but it has smartly teamed up with one, Nikola, to make electric trucks. As Brooke Sutherland writes, this is a huge competitive threat to Tesla, sprinkling GM with Nikola's electric-vehicle fairy dust while giving Nikola access to GM's vast manufacturing and engineering capacity.

That's just one reason Tesla's stock just had its worst day ever. It was also unexpectedly snubbed by the S&P 500's selection gnomes, depriving it of sweet, sweet passive-investment cash. Who knows exactly what the gnomes were thinking when they left Tesla out of the index, but the fact that its "profits" are routinely boosted by sales of regulatory emissions credits may have had something to do with it. Despite all these woes and today's shellacking, Tesla stock is still wildly overpriced, writes Chris Bryant, perhaps by 40% or more — which is how much the stock has risen since Musk himself called it "too high." This zeppelin may only get more leaden.

Further Inflated-Stock Reading: Apple and Tesla are the latest examples of how stock splits are meaningless. — Nir Kaissar

BoJo's Big Gamble

Boris Johnson is apparently bored with just a pandemic and a recession, so he's risking a third crisis by threatening to end 2020 without an EU trade deal. Specifically, he has vowed to trash the Brexit divorce pact he signed just months ago, which one of his own ministers admitted is a violation of international law, but just a very minor one, like being mildly pregnant. Most observers think this is just a negotiating ploy, but Therese Raphael warns the mere threat erodes Britain's credibility and could make a final Brexit deal harder to strike.

Markets aren't taking the threat seriously, but there are reasons to believe Johnson may really go through with it, warns John Authers. He may see a no-deal Brexit as freeing the U.K. to pump money into national-champion tech giants, an approach that has never gone badly before, nope.

Europe is also yawning at Johnson, and not just because it doesn't take his bluster seriously, writes Lionel Laurent. It's also better prepared than it was several months ago to withstand the U.K. bashing itself repeatedly in the face with a shovel if that's what it insists on doing.

Still Waiting on That Stimulus

Speaking of a country bashing itself repeatedly in the face with a shovel: The U.S. Congress continues to not revive the special $600 unemployment benefit that expired weeks ago, partly because of fears this pandemic party favor will keep people on their couches watching "Cobra Kai" instead of going out and getting jobs. Noah Smith points to a growing pile of evidence this concern is not actually a thing — first of all, there are still not enough jobs for people to get — and that the special jobless benefit was one of the greatest economic successes ever produced by Congress. Its absence will be missed, no matter how entertaining "Cobra Kai" is.

The benefit's disappearance adds to the risk of people being evicted from their homes, another brewing crisis Congress is vigorously doing nothing about. President Donald Trump has tried to help by declaring a moratorium on evictions. This is on legally squishy ground, but it's also not nearly helpful enough, writes Bloomberg's editorial board. Trump should instead push Congress to give people direct housing relief, so landlords and banks keep getting paid and renters don't get slapped with a huge bill later.

Playing Pandemic Politics

If there's one pandemic lesson we should have learned by now, it's that there are no shortcuts. Rushing to open bars and hold biker rallies to save the economy only spreads the disease more, hurting the economy. There's a similar dynamic with vaccines, warns Max Nisen: Rush them to market, and you could wreck confidence in them and extend the pandemic. Trump and his FDA are pushing drugmakers to have a vaccine ready before the election. In an amazing role reversal, an industry that ordinarily can't get FDA approvals fast enough is now arguing for caution. It will have to keep holding its ground.

Further Pandemic Reading: New York's disastrous school reopening plan is a cautionary tale. — Andrea Gabor

Telltale Ads

There's a reason so many of today's hip, unique startups are all so samey and boring, writes Ben Schott. They're "blands," not brands.

Further Reading

China's nuclear buildup has troubling implications for the U.S. and the world. — Hal Brands

A power vacuum looms for Gulf Arab states as both the U.S. and China lose interest. — Karen E. Young

Sudan is taking steps toward a better future but needs help. — Bobby Ghosh

All algorithms are untrustworthy until proven otherwise, and they have tremendous power over our lives. — Cathy O'Neil


JPMorgan Chase is probing employees' alleged misuse of relief funds.

Chilled salmon may harbor coronavirus.

The creator of "Civilization" has written a memoir.

Kominers's Condrums Hint

If our face/sequence remix Conundrum has left you spinning, maybe try starting with the fourth sequence. Those chemical elements shouldn't be too hard to identify — the question is why they're in that specific order. Does it sound familiar somehow?

Then once you've got the rhythm of the puzzle down, it shouldn't be too hard to get fired up about identifying the figures in the first two sequences — just look around! And if the third sequence still appears totally mysterious, that isn't the end of the world (or is it?). — Scott Duke Kominers


Two-thousand-year-old date seeds bear fruit. (h/t Ellen Kominers)

New Game Boy runs forever on button-pressing and solar energy. (h/t Mike Smedley)

A "wild west" mentality lingers in some U.S. states.

Why you get mysterious packages sometimes. (Just please don't plant or eat them.)

Note: Thanks to Tara Lachapelle and Justin Fox for making this job look easy last week. Please send date seeds and complaints to Mark Gongloff at

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