A Major Canadian Union Is Calling For Pensions To Divest From Tesla
A Major Canadian Union Is Calling For Pensions To Divest From Tesla
A Major Canadian Union Is Calling For Pensions To Divest From Tesla
The Canadian Association of Professional Employees (CAPE) is calling for public pension funds to divest from Tesla. To show solidarity with American workers facing attacks from Elon Musk and his so-called Department of Government Efficiency (DOGE), the union says it’s time for the Canadian Public Sector Pension Investment Board (CPSIB) to dump its Tesla shares.
Despite holding no elected position in United States President Donald Trump’s administration, Musk and his DOGE are firing public servants with reckless abandon, placing the entire American federal public sector in jeopardy. Essential workers at the departments of education, health and human services, energy, veterans affairs and defense, as well as the Internal Revenue Service, the National Park Service, and the Consumer Financial Protection Bureau have been summarily fired, furloughed, or pressured to accept dubious buyouts.
In response, CAPE, which represents more than 27,000 Canadian federal public servants, is leading the charge to pull Canadian public pension investments from the controversial electric automobile maker.
Even if we forget about DOGE, can anyone tell me why the Tesla stock price is as high as it is? It's nonsensical.
At the risk of seeming like a jerk, I’ll state the obvious: market prices are set by the intersection of supply and demand.
In theory the fundamental value of a share is the fractional ownership in that company. If the company is successful then shares will have value relating to dividends or if the company is sold, etc.
However in practice the supply and demand of these shares is not required to be rational. People can have irrational preferences for shares, hype men can sell wild fantasies about the future, and so forth.
Back to your your more specific question, the share prices of Tesla have been completely disconnected to the value of the company for quite some time now. This is not opinion, this is plain observation of the valuation of the company relative to its revenues or profits or growth potential.
What is opinion is why that valuation has been irrationally maintained for years. My opinion that Musk has done a successful job in cultivating a cult audience around him of financially-motivated hype men who join him in promoting the prices regardless of their actual value.
Musk and his cult manipulates the media, both mainstream and alternative, with lies and publicity stunts painting a false narrative of future potential. Self driving cars, robotaxis, AI nonsense, and much more.
The regulatory bodies who should be stopping this fraudulent behaviour have responded meekly in the past, and now in Musks home country have been largely dismantled. This further encourages the cultists to continue their cycle of hype, disconnected from reality.
In my opinion, I find it likely many investors are well aware that Tesla is a bubble valuation. However so long as the hype machine continues, Tesla share prices can be a speculative investment as long as you can sell to a “bigger fool” later. No one knows when the bubble will burst, so much like penny stocks or meme coins it can be a gamble worth taking for some.
Back to the article for a second. In no uncertain terms, pension funds or anything of the like should not be gambling their funds on this house of cards.
I agree with everything you said and you don’t sound like a jerk.
I'm baffled at who is buying this stick at these prices. I'd short it but if I shorted it when I thought it disconnected from reality if have lost a lot ofoney by now.
Edit: original version had a typo, I don’t feel OP was a jerk
Idk, but I do know that about 45% of its revenue is US gov subsidies. This came up because Elmo was saying NPR (1% funded by US gov) should lose its funding
It’s based on absolutely nothing.
It’s because of the green energy credit swap scheme in the US, which has essentially been a taxpayer giveaway of 10s of billions to Tesla over the years. Tesla itself would have gone bankrupt multiple times over by now, if not for them being able to salvage their balance sheet by selling these credits.
The way it works involves other auto / oil and gas industry companies buying the credits from Tesla, in order to offset their own carbon emissions which otherwise would cost them significantly in terms of pollution fines (and maybe bad PR).
This way, Tesla gets the taxpayers’ house money for free, and can sell it off to these other companies so they can continue polluting just as they always have been. It’s the American neoliberal dream of unchecked corporate greed with a thin veneer of eco-responsible cover so that nobody really has to do anything to improve. Just don’t scratch beneath the surface if you actually give a shit about the environment. Sadly, many don’t.
Last point on this - yes, this means Elon Musk is the biggest welfare queen in America. He rips away any assistance for those who need it (to lower his tax bill) all while gobbling up billions in free subsidies from the government. It’s grotesque.
Tesla is a big part of S&P 500, so any pensions, mutual funds, hedge funds etc. that hold index funds include tesla automatically. that is why it is important for institutional investors to consciously divest from tesla.
besides that, it’s a meme stock popular with musk fans and twitter heads.