Tesla's stock market valuation
$Tesla (TSLA.US)$ The biggest indication of an overvalued market is Tesla. Tesla commands a market cap of $1.277 trillion on profits nearing $3 billion whilst $Apple (AAPL.US)$ passed $1 trillion barrier in 2018 when it hit profits of $58 billion!
Common sense would imply that companies like Tesla are grossly overvalued when $Alphabet-C (GOOG.US)$ has a 'mere' market cap of $1.95 trillion based on profits of $69 billion. Perhaps common sense has been replaced by collective delusion!
That is echoed in the price of recently listed $Rivian Automotive (RIVN.US)$ . It has virtually zero revenue and has only produced around a dozen cars so far yet has a market value higher than that of both $Ford Motor (F.US)$ and $General Motors (GM.US)$ ! $110bn compared with $77.9bn and $92bn respectively.
Putting it another way, if one assumes the 2023 production targets of Tesla and Rivian are achieved then Tesla’s market price is the equivalent of $500,000 per car and Rivian’s $1.3 million per car! Last year Ford made 4.187 million cars so one might ask why its market cap is only $77.9 billion and not $ 2.0935e+12 at $500,000 per car! I cannot get my head around such numbers, but I think that is around the same size as the US economy: The gross domestic product of the United States in 2020 amounted to around 20.93 trillion U.S. dollars. Madness?? Yes. It is Tesla's ticking time bomb.
That madness can only end badly for some and I hope those caught up in the collective delusion about Tesla can get out before they get crushed in the rush when the herd has bought-in to the truth...
My concern is that when that ticking time bomb explodes it will be a catalyst for a parallel explosion of other growing problems worldwide. We should be worried because others suggested that Tesla has nowhere go but up!
To conclude: I have nothing but admiration for Elon Musk and the company he has built from scratch. My words are not intended as any form of criticism about Tesla as such but about those who have created the stock market valuation and thus Tesla's ticking time bomb. Nasty market surprises may lay ahead of us.
One word says it all - beware.
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rabitter : Many people worry that Tesla’s valuation is too high, what do you think
THEWIZARD : Just let them be.
Go make your profits off them.
Be thankful that without them, the profit opportunities would not have been this great.
Stay by myself : Tesla is a tech stock, is a tech stock, is a tech stock.
Investors treating Tesla as a car maker are in denial of that.
what doyouwant Stay by myself : Ostriches don't make good investors.
I am robot what doyouwant : Agreed. Maybe people should do an internet search on Tesla and come to their own conclusion regarding the dozens of industries they've dipped their hands into before dubbing them "just a car maker". It's really not secret information.
Frostythemoom what doyouwant : Then take your head out of the ICE-saturated sand. Every ICE vehicle will be replaced with a BEV, first voluntarily, then by law. Global warming is real.
BullnBearTrading Frostythemoom : 1.) I'm strongly in favor of EV.
2.) Tesla may compete well.
3.) The stock has 90% downside due to its * laughable * valuation.
All three things are true.
Man-made climate change is very real - and poses an existential threat to human civilization.
Also true!
And yet...Tesla is a STRONG SELL.
Revana : Anyone who thinks hydrogen will surpass BEV, doesn’t understand the Physics, Chemistry, and Economics of H2 extraction, compression, and distribution. Those that do know that this will NEVER happen.
Evanalin : Sorry you’ve missed out so far. If you invest now you still stand to double or triple your money in a few years.
Baby putsomemusic Evanalin : Tesla stock has 90% downside.
The end of this mania draws nigh.
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