It’s in that specific situation, the building is collateralizing a loan to build another property, and they can’t let the valuation on it drop. The valuation is based on the rent it can generate, so their options are to claim rents aren’t actually down and this is just some transient situation, or risk it all going under.
The situation is rare, in that rents don’t trend significantly down very often. But I assume large developers being highly levered isn’t rare at all, so when rents go down sharply I would imagine this happens fairly often.
We also haven’t brought up the fact that a lot of property management companies are unofficially colluding on rent prices - or at least were as of a couple years ago - through a third party vendor that advises them on prices.
PPI rose 0.6% in February to 1.6%, above the 0.3% and 1.2% expected. Leading indicator of CPI, so we may well see CPI go up towards 3.6 to 3.9% over the next few months.
Tesla down a third of a Honda today! Worst performing stock in the entire S&P 500 this year - even worse than the company whose planes are falling apart.
Now down to just 8.2 Hondas of market cap, down from its all time peak of 24.5 Hondas of market cap. Still worth more than Nissan, Kia, GM, Hyundai, Ford, Honda, Volkswagen, BMW, and Stellantis combined. You can still fit half a Mercedes-Benz market cap in there after all those. It is down to 1.66 Toyotas, though!
I think my favorite part is how he comes up with new bullshit every 6-12 months promising some new awesome thing that convinces his cult-like following that TSLA should still moonshot again. “Sure it’s overvalued, as a car company, but it’s actually a solar panel companybattery companyfull self-driving companyrobot company, and look at all the growth in that!”
All that said, if it dropped to around $100 per share and Elon was forced out as CEO, I’d probably be interested.
I feel like all these interest rate talk is all irrelevant for the average person. For the average person… in the end, it’s all about supply.
All interest rates does is change the equation between rent versus buy.
But then again, you could argue interest rates also have an impact on home building as well.
Overall for the average person, the biggest benefit for the average person is to get rid of restrictive zoning. But I’ll try and not talk about that in this thread since this is about stocks.
Given the fact that TSLA became the most valuable car company in the world based on nothing more than Elon musk and bullshit, I wouldn’t be surprised if DWAC ends up as the most valuable social media company in the world and Trump ends up as an actual billionaire, because this is the timeline we are living in.
The market will reign this in eventually, just a question of whether Trump cashes out in time. The magnitude of this is wild. A CNBC article said Truth had $3.9M in revenue against $49M in losses and Twitter/X had $2.5M in revenue. My brain broke for a minute until I realized the mistake. They put an M next to Twitter revenue instead of a B.
Truth has a valuation of $12-13B right now according to CNN - not sure exactly how the ownership is structured to do the math. But whatever, that’s the valuation. That’s on under $4M of revenue. It needs to grow it’s user base somewhere between 100x and 1,000x to be worth $12-13B.
It’s going to get shorted to oblivion. Jeff Yass has a big stake now, and my guess is he’s conspiring to prop up the share price for Trump to exit, in exchange for Trump protecting TikTok. Yass has a $33B stake in TikTok and will dump way less than that into Truth. But Yass is sharp, and his firm is a market maker for a lot of options. I wouldn’t be surprised at all if he has a bigger bet against Truth than on it, through options he doesn’t have to disclose.
Think of $DJT (Truth Social) as a combination of a meme stonk and a crypto rug pull. That’s basically what it is.
Counterpoint: a cult with a massive following just went public. The valuation will go to whatever level the cult is willing to support. Fundamentals do not matter at all in this scenario.
