This should go without saying, but please don’t take anything I write into account until you’ve read it in its entirety and please understand this is not a recommendation to buy, sell, short, or hold.

Tesla is an excellent company with extraordinary potential. The problem, as of February 2025, is that much of that potential is already priced in. Shares of Tesla are priced today where they should be in three years. In three years, $380 a share may be a suitable price, but that means there’s nowhere for it to go in the meantime. As a growth investor, I can’t sit out for three years, waiting for a company’s value to catch up to its price or risk a steep price correction.

Unfortunately, because the company’s CEO is involved in politics, if the price does correct, the public will cry foul. Blame will be placed on political enemies for corruptly manipulating the company’s stock price. It’s this type of misinformed rhetoric that undermines trust and promotes fear among retail investors. Fear that investing in the market is a dangerous scam. To be fair, retail investors driving up a share price without regard for fundamentals is a dangerous scam, in a way, but a price correction is not. A price correction is evidence that the market still functions as designed and stocks always revert to their real value, providing an opportunity to buy at a more rational price.

Some popular stocks can stay wildly overpriced with enough hype, when the forecast is for sunny weather. However, for Tesla, some less favorable news may be on the way. Remember that loan Musk took out against Tesla to buy Twitter? That’s worth another look.

Musk bought Twitter for $44 billion during the pandemic, when Twitter traffic surged as people had more time to tweet due to reduced work hours. He leveraged shares of TSLA as collateral for the loan. People have returned to work, and Twitter usage is down. Subscriptions are dropping. The value of Twitter is falling, and lenders are beginning to offload the debt by repackaging it and selling it to other investors at a discount, also known as a loss. This suggests that lenders are eager to eliminate potential risk, as they perceive a lack of value in the loan collateral. They don’t want to collect and become shareholders of Twitter or TSLA, because they see the value isn’t there and they forecast a steep loss when the price corrects. Maybe Musk needs some juicy political drama to drum up some Twitter traffic to make the company more valuable.

Some big names have opened big shorts on TSLA in recent months, including one of the original names from the story, “The Big Short,” but not me, because a new factor has emerged in all of this in recent years: apes. Apes are the millions of meme stock investors subscribed to a Reddit forum called WallStreetBets. It’s not an insult; they self-identify as such, embracing the implication of an aggressive and uninformed investor mentality. They were proudly displaying ape art NFTs as their avatars when it was all the rage. I don’t subscribe, but I’m aware of the impact they have on stock prices. “Apes together strong” is a slogan from the movie “Planet of the Apes” and now serves as a nomenclature for a subculture among retail investors who believe fundamentals matter less than the frequency of the TSLA ticker appearing in tweets each day. People don’t buy what’s of value; they buy what they hear people talking about. This isn’t new to the stock market, but it’s more pronounced now due to social media, making its impact more significant than it used to be. When the apes dump TSLA to stampede toward another stock, TSLA won’t have the fundamentals to uphold its price. This is mob mentality in a nutshell, which is void of math, logic, and reason, and it’s a huge mob.

As I mentioned, I’m not shorting the stock like some others are. If a correction is on the horizon, I’ll consider buying TSLA at a reasonable price because, as I also said, it’s a great company with great potential. For now, I’m letting go of FOMO and focusing on things that make logical sense for my clients.