Ford stock will be worthless in a year – DD

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by friendly-cephalopod

 

Our beloved American car company that has been around forever is a piece of absolute dog shit that will go bankrupt in the next year. Here’s why

  • 103 Billion in long term debt – Over the last 3 years this has increased by 12%
  • 226 Billion in total liabilities – 10% increase in 3 years
  • Ridiculous leverage ratio of 6
  • Only 38 Billion in cash
  • Profits are decreasing by about 1 billion per year
  • EPS is pure shit for the sector – PE ratio of 17 is triple that of GM and Honda

So what is keeping the stock value afloat?

  • High dividend yield is appealing to old people who think this translates to “secure long-term investment”
  • 10 billion dollar investment in engineering new electric vehicles has investors hopes up
  • Corporate restructuring – cutting costs with layoffs

Why it will crash and burn

  • Recent Moody’s downgrade to junk bond status will likely lead to further downgrades from Fitch and S&P into junk bond status – stock value will drop significantly if this happens
  • Ford has already missed the boat on developing an electric only vehicle that will catch on with consumers – Fusion Plug in Hybrids are retarded because nobody wants to plug their car into an outlet every day and still have to buy gas. They will never develop a competitive electric vehicle. Overall Ford has shown a lack of innovation in their cars
  • Ford Credit has issued 91 Billion dollars worth of new car loans. Given that the number of delinquent loans in the U.S. has been steadily increasing since 2011 and is at its highest level ever – this does not bode well for the credit division of Ford
  • Decreasing vehicle sales in the last year – fears of recession will further decline number of new cars sold. Nobody is going out and buying a new car if they think they will lose their job soon
  • Decreasing profits and EPS in the next year will lead to further stock devaluation

TLDR – Either short shares of Ford or buy puts dated for late next year/2021. This company is an overly leveraged dumpster fire

Obligatory “Inverse this post”

 

Disclaimer: Consult your financial professional before making any investment decision.

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