alt Hacker NewsI bought BYD stock in 2025 before split in the hope that their market dominance will translate to great returns. The stock has pretty consistently traded down since then. Meanwhile Tesla stock soared purely on the air coming out of Elon’s mouth.
Replies
In the combination Keynesian Beauty Contest[1] and casino that passes for an equity market in the US, everyone knows that Tesla is ugly as hell, but everyone also knows that everyone knows that it will get votes, so the show goes on.
This is the story of nearly every Chinese stock ever. Their market is very different and even simple intuitions don't carry over.
It’s stock manipulation.
"The market can stay irrational longer than you can stay solvent."
But as another comment pointed out, they have tons of debt, and TFA states that their "revised" target was revised downward, meaning earlier stock valuations were priced for higher sales.
For the major part BYD sales performance is dependent on government subsidies in the country where they sell three quarters of all the cars they produce. That is a high risk factor investors don't like.
Stock prices are forward looking.
You bought BYD after it had been hyped to the moon. Of course the price doesn’t move when it meets sales expectations.
The Chinese economy isn't set up to endlessly create value for the capital-owning class, so you are never going to profit off of Chinese companies and stocks in the way we are used to in the west.
Chinese stock market is very different than US. In US you have like 62% of Americans reporting owning stock (including via mutual funds/retirement accounts) and in China, it's single digits participation. And China's market is famously retail heavy one, there were some studies showing that Shanghai Stock Exchange retail trading is 80%+ of volume vs ~10% in the US.
There is less hype and they are also not affected as much as US if stock goes down or stays flat.
Chinese stocks don’t seem to follow any reality either. BYD is basically flat over 5 years.
> Meanwhile Tesla stock soared purely on the air coming out of Elon’s mouth.
Wrong orifice.
Purely on the air coming out of Elon’s mouth as well as the 1 million cars sold world wide, 165 successful Falcon 9 launches and 9 million Starlink subscriptions
your very mistake was trading stocks at all
stocks and the whole money-as-a-business is US thing - making actual product is the China thing
Auto manufacturing is low margin and capital intensive. BYD is valued as an auto manufacturer. Tesla is not.
Even all of that aside, the idea that foreign investors will be allowed to meaningfully participate in the upside of Chinese companies is questionable. Every Chinese company is one recapitalization away from zeroing out the common stock owned by foreigners. What are they gonna do, sue in Chinese court?