So I’m looking at Tesla’s stock price again. And wondering, again, why it’s so high.
Looking at the Market Capitalization Tesla is in the same league as GM and Ford. That’s the stock price times the number of outstanding shares.
Looking at their debt, they have done an excellent job of building up the value of their company with running up comparatively little debt.
That’s however where the goodness ends for Tesla’s current numbers. For other practical measures of an auto company’s worth, revenue, profit, and 2016 car sales, Tesla is still a tiny little niche company compared to GM and Ford. In 2016 car sales they barely move the needle.
The value in the stock price that drove the market capitalization so high is all a bet that Tesla is going to become big enough in revenue, profit, sales, or some combination thereof to justify the huge capitalization. They have accomplished an incredible amount in a short time. However they still have a long ways to go.
I lifted the financial data from Yahoo finance today.
I lifted the 2016 GM, Ford, and Tesla car sales data from:
Go ahead an hit me with your critique. I’m sure my data collection is not perfect. But I think I am in the neighborhood. If you can point out an error in my representation of this I’m happy to learn and correct it.
Update comment #1: Geez, come on media, I was way ahead of you.
Update comment #2: Full disclosure, I’m a shareholder as a result of the mutual fund that has a fair chunk of my 401k funds invested in it. But I think they are significantly over valued and I wish they’d get out of it before it collapses. But in the current life and times of corporate politically correct speak, I love this sort of stuff:
“We expect that as companies make the transition to publicly-traded status, the governance structures and practices in place at the time of the IPO will evolve to align with the company’s changing strategy,”
“This investor group should buy Ford stock,” Musk posted on Twitter on Wednesday afternoon. “Their governance is amazing...”