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.

Image

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!

For context, Toyota trades with about a $175 billion market cap. In other words, Tesla’s stock is almost 40% more valuable than Toyota’s.

Let’s put this in perspective… Toyota sells over 10.5 million cars per year. Tesla sells around 370,000, or just about 1/30th of Toyota’s volume.

Toyota’s revenue for the last four quarters was $275 billion producing almost $20 billion of net income. Tesla lost $144 million on just $26 billion of revenue in the last four quarters (less than 1/10th of Toyota’s revenues).

Looking at it another way, Tesla stock is now worth more than Volkswagon, BMW, Mercedes, GM, Ford AND Chrysler…COMBINED! This is absolutely unreal.

None of this even contemplates the accounting inconsistencies, a few of which I addressed in the previous commentary. It also doesn’t address the plethora of electric vehicle competition coming to the market in 2020 and 2021 that still qualify for $7,500 federal tax credits, etc… Some of these new vehicles are coming from new automakers and others coming from established automakers with a history of profitably manufacturing vehicles.

I believe when all is said and done, and this bubble bursts, we’ll look back and see that Tesla was the poster child of this mania. Documentaries will be made about the Tesla story and the ultimate fall from grace

I’m buying more puts this week.

Disclosures:
Past performance is no guarantee of future results. All investments maintain risk of loss in addition to gain.

Data from third-parties is believed to be reliable but accuracy is not guaranteed. Much of the data used to interpret the markets and forecast returns are often at odds with each other and can result in different conclusions. Many different factors impact prices including factors not mentioned here.

This is NOT investment advice but merely a general commentary. Individualized investment advice cannot be provided until a thorough review of your unique circumstances and financial goals is completed.

Views provided here are current only as of the moment of posting and are subject to change at any time without notification.