Posted on 04/12/2017 11:20:44 AM PDT by Lorianne
In fact, it’s not “inexplicable” at all. ___ Tesla shares rose to $313.38 this morning, giving the company a market capitalization of about $51 billion, surpassing GM for a moment as the most valuable American automaker. This left some industry insiders wondering about tulip bulbs.
“It’s either one of the great Ponzi schemes of all time, or it’s all going to work out,” mused Mike Jackson, CEO of AutoNation, the largest dealer group in the US. He was speaking at a conference hosted by the National Automobile Dealers Association and J.D. Power. “It’s totally inexplicable, as far as its valuation,” he said.
But he was wrong. It’s not “inexplicable” at all. It’s very explicable.
Tesla makes some nice cars, as you’d expect from a company that charges an arm and a leg for them. But Jackson’s statement wasn’t about its cars, their quality, or electric versus internal combustion engines. It was about Tesla’s market capitalization of $51 billion.
The company has accomplished a lot: Electric cars have been around for longer than internal combustion engines. When they first appeared in the 1800s, they competed with steam-powered cars and horses. What Tesla has done is put them on the map. That was a huge feat.
Now every global automaker has electric cars. They all, including Teslas, still have the same problem they had in the 1800s: the battery. But those problems – costs, weight or range, and time it takes to charge – are getting smaller as the technology advances. And the competition from the giants, once batteries are ready for prime-time, will be huge, and global.
So in March, Tesla sold 4,050 new vehicles in the US, according to Autodata. All automakers combined sold 1.56 million new vehicles in the US. This gave Tesla a record high market share of an invisibly small 0.26%. Volume-wise, it’s in the same ballpark as Porsche. GM sold 256,007 new vehicles in March, for a market share of 16.5%. In other words, GM sold 63 times as many new vehicles as Tesla did. For percent-lovers, that’s 6,221% more. Even if Tesla quadruples its sales in the US, it still will not amount to a significant market share.
SNIP
Amazing what a company can do when they receive subsidies from taxpayers...
But my money is still that this is a type of ponzi scheme. There is just no way Tesla is on-par with GM in market value.
All built on taxpayer subsidies.
“Amazing what a company can do when they receive subsidies from taxpayers..”
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Now, if only they could build those flying Jetsons-type cars we were all supposed be riding in by 1970.....
If it looks to good to be true...it is! Tulip Bulbs 2.0.
EPS is $ -4.86
P/E is not listed. Stock price is pure bubble.
The Krispy Kreme of autos...
The top ten of the sp500 have a pe ratio collectively of a bit more than 40x earnings.
Democrats and socialists have conspired to turn the sp500 into a self fulfilling enrichment process and power builder. Look at the people in and around these top holdings....just the simple allocation of the sp500 indexes makes the process self fulfilling.
Maybe lots of affluent greenies and Hollywood idiots running up the stock price.
That is a good idea!!
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