Third Quarter 2024 Review — ft. Aswath Damodaran | Prof G Markets

Tesla Earnings

Tesla's recent earnings report has sparked significant market reactions, with Scott Galloway noting a 21% stock price increase. Aswath Damodaran describes this as a relief rally, highlighting that Tesla's higher-margin categories are growing faster than its core business 1. However, he warns that Tesla's earnings are unpredictable, suggesting that investors should brace for surprises in future reports. The "We Robot" event further complicates Tesla's narrative, as Ed Elson points out the overpromising nature of AI products showcased there 2. Damodaran expresses skepticism about the current capabilities of AI, emphasizing the gap between promises and actual delivery.

   

Google Antitrust

The discussion on Google's antitrust challenges reveals the complexities of breaking up such a vast entity. Aswath Damodaran argues that a breakup might not achieve the desired reduction in Google's dominance, as its core business model is deeply integrated 3. He compares Google's situation to past breakups like Standard Oil, noting the difficulty in finding clear lines for division. Damodaran suggests that remedies should focus on addressing the consolidation in online advertising rather than dismantling the company. The conversation highlights the challenges regulators face in curbing the power of tech giants without unintended consequences 4.

   

Boeing Strategy

Boeing's recent $21 billion share sale is a strategic move to avoid a credit downgrade, as Ed Elson explains. This forced sale aims to maintain Boeing's credit rating and manage its substantial debt, despite the dilution of shareholder value 5. Scott Galloway describes Boeing's situation as a choice between bad options, with the share sale being the least detrimental. Damodaran highlights Boeing's precarious position, noting that its survival hinges on its duopoly status in the aerospace industry 6. He warns that Boeing's credibility issues pose significant risks, making its recovery uncertain.