Tesla Update: Added to the S&P 500

Tesla is up 8% on the news that the stock will be included in the S&P 500. This means S&P 500 index funds will be forced to buy Tesla stock (regardless of price) in order to align the funds with the S&P 500 index they’re tracking.

This puts Tesla’s market cap at $420 billion making it the most valuable automaker in the world, or more than double the value of Toyota. Toyota sells almost 11 millions cars per year while Tesla has sold about 430,000 vehicles the last four quarters.

But let’s look at it another way. The 10 most valuable automakers in the world have a combined market cap of $1 trillion. At $420 billion, Tesla is over 40% of the total! However, Tesla’s revenues and earnings each are just about 2% of the total. Continue reading “Tesla Update: Added to the S&P 500”

Tesla Q2 Earnings Update

Yesterday, Tesla released their Q2 earnings. I believe we are witnessing an extremely interesting case study in real-time that will be studied by future generations of investors and business students. So, I will continue to comment on it in real-time. There is simply so much to learn from this case, and it’s not often we have the opportunity to witness such an interesting situation as it unfolds.

Tesla closed yesterday with a market cap (the total value of all outstanding shares of stock) of about $300 billion and a per share price of $1,592. To put that in perspective, BMW’s market cap is about $40 billion. So, Tesla’s stock is worth about 7.5x that of BMW’s with just 1/7th the global sales! Continue reading “Tesla Q2 Earnings Update”

Tesla Update #3 – Most Valuable Automaker in the World?!

This is now my third Tesla update commentary. Below is a chart showing the price of Tesla for the year along with dates of the previous two commentaries.

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Tesla has set another milestone by becoming the MOST VALUABLE AUTOMAKER IN THE WORLD! As I write this sentence, Tesla is trading at about $1,300 per share, which equates to over a $240 billion market cap! Continue reading “Tesla Update #3 – Most Valuable Automaker in the World?!”

Tesla Update

Back in February I did something rare (for me) and wrote about an individual stock, Tesla. I essentially pointed out the absurdity of the valuation based on Tesla’s revenues, earnings, margins and vehicle sales in the context of the industry.

That was written on February 4th upon which Tesla ticked a high price of 968.99. Over the next two months Tesla’s stock price proceeded to decline over 60% to $350. The stock has since rallied to over $800 as I write this. What a ride.

Last night, Tesla reported Q1 earnings. As usual, there are some inconsistencies and concerns in their financials so let’s take another look to see if the $800 per share price is justified. Continue reading “Tesla Update”

Tesla…To The Moon!

Today, I’m going to do something I’ve never done before. I’m going to comment on an individual stock.

Since I generally don’t make recommendations on individual stocks for clients, I don’t focus my commentaries on them. However, I’ve been following this company closely for a couple years now, and the situation has become so ludicrous that I feel the need to highlight it. This could be one of those rare examples that go down in history as a great learning lesson. Continue reading “Tesla…To The Moon!”