Tesla Crosses $100 Billion In Marketcap
Tesla has been on a wild run the last 100 days or so. The stock is flying to all time highs at a pace that reminds people of the dotcom era.
Of course, this is a single stock as opposed to the entire market. Regardless, the frenzy surrounding the company is a bit perplexing to many.
An early morning run up when the market opened pushed Tesla into the number 2 spot in terms of marketcap in the automaker segment. It now only trails Toyota which is valued at over $200 billion.
https://ww.electrek.co/2020/01/22/tesla-tsla-market-100-billion-musk-compensation-plan/
Afternoon trading pushed the automaker back under the $100 billion mark but it is quite a feat nonetheless.
Many question the sanity of a market that values a company so richly. Tesla only sold 360K cars last year. Part of the answer can be the fact that many expect a high growth rate in 2020 with the opening of the plant in China. However, it is still a bit rich in comparison to other companies in this sector.
Proponents of the company emphasize that Tesla is not just another car company. In fact, it is more like a Silicon Valley tech company than a Detroit automobile manufacturer. The company is big into renewable energy, seeking to become one of the largest providers of energy storage.
Within the realm of transportation, Tesla is thought by a lot of experts to be the leader in the race to achieve autonomous driving capabilities. This is something that cannot be confirmed nor denied until someone brings that technology to market. However, the fact that there are near 1 million vehicles on the road with autopilot capability installed tends to support the claim that they are amassing a ton of data.
How it all turns out remains to be seen. Tesla might be the game changer for society or it could end up being a footnote in history.
However, there is no way to deny the meteoric rise in the stock and the news over the past few months for Tesla has been in their favor.
Could this be a sign like $475 Yahoo was for the dotcom era?
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Tesla's stock makes no sense fundamentally. Tesla is a top 5 most shorted stock on Wall Street...its the short sellers covering their losses which it making the stock reach nose seat bleachers.
Impossible to validate the marketcap based upon fundamentals. In this instance, it makes no sense.
Markets will do what markets do and someone will get stuck holding the bag.
Posted via Steemleo
Lol...so true, but there is no way Tesla should have a market cap 2nd to Toyota in the auto industry. Their sales don't justify the valuation. Stock is only up this much because the short sellers are getting squeezed.
Posted via Steemleo
Agreed, the price run-up is a result of the amount of short shares. Like BTC, Tesla was the first, propped up by tax incentives to start the company, but new models for electric vehicles, such as BMW, Porsche, etc. will blow the doors of Tesla's, not including the law suits, fires, crashes that will crush the company.......i.e....Boeing
That has been the mantra for a few years but, thus far, has proven false. The Taycan was not well received with a price double of what was expected. Audi also entered the mix with great fanfare yet the sales are very disappointing.
Posted via Steemleo