Hyundai has grown faster than any automaker in America. The company spent $7.6 billion on a plant in Georgia to make sure this continues. Retail traders are already pricing in a merger with Tesla based on a Reddit post with four upvotes.
The South Korean automaker wants more market share. Bold strategy. Every company on Earth wants more market share. That's like saying Hyundai wants money in exchange for cars. Revolutionary stuff.
Here's what actually happened. Someone at Hyundai looked at a spreadsheet. Saw a line going up. Built a factory the size of a small European country. Now they'll make more Elantras for Americans who think a sunroof counts as luxury.
The plant cost $7.6 billion. That's enough to buy every share of several mid-cap companies trading on the NASDAQ. But sure. Spend it on a building in Georgia where people will assemble vehicles for buyers who finance at 8% because their credit score has three digits and two of them are the same number.
Technical analysts will tell you none of this matters. They're correct. The stock will do whatever it was going to do regardless of how many billions Hyundai spends on American dirt. But portfolio managers need to justify their existence. So they'll write reports about production capacity and manufacturing footprint. Then the stock will move based on whether Jerome Powell coughed during a press conference.
Hyundai says it's not done growing. Of course it's not. Companies never say they're done growing. That would require honesty. "We've peaked, everyone go home" has never appeared in an earnings call. Instead we get this. Breathless announcements about factories. Market share targets. Synergies. All of it designed to make you forget you're buying a depreciating asset with a loan you can't afford.
The real winner here is Georgia, which gave Hyundai tax breaks worth more than the GDP of Samoa to build a factory that makes cars nobody will remember owning.
Photo by Zoshua Colah on Unsplash
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