Tesla’s Valuation Is Teetering
3 shaky assumptions investors have bet the farm on
Even after Elon Musk went on the record in May to say Tesla’s valuation was too high (approximately $150 per share after a 5 to 1 stock split – August 28th, 2020) investors went on to bid Tesla up to dizzying heights. At one point only weeks ago, Tesla was the 7th most valuable company in the US, even surpassing the value of Walmart.
Just last week Musk reiterated his feelings about Tesla’s valuation;
“I’ve gone on record already saying the stock prices have been high, and that was well before the current level. But also if you ask me, do I think if Tesla will be worth more than this in five years? I think the answer is yes.” — Elon Musk, September, 2020
Let me translate – Musk thinks it will take 5 years of rapid growth for Tesla’s fundamentals to catch up to its current valuation.
What’s holding up Tesla’s sky-high valuation? Why are investors still chasing a stock Musk himself believes might be 3x overvalued? Rightly or wrongly, investors…
