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GM is worth $50 billion. Do you really want to claim that Tesla is as big as GM? Tesla has 1/5 the employees of GM, 10% of the revenue, and has sold about 200,0

GM is worth $50 billion. Do you really want to claim that Tesla is as big as GM? Tesla has 1/5 the employees of GM, 10% of the revenue, and has sold about 200,000 cars total compared to the 9.6 million GM shipped last year alone. The story is the same for any other big manufacturer. Tesla is a pipsqueak. It's just ludicrously overpriced.

deleted 8y ago
[deleted]
notyourwork 8y ago
Worth doesn't always correlate against size. Worth is what someone is willing to pay for something. Tesla may be overpriced but to disregard Tesla's value based on a size comparison is ill-conceived.
- aerigniobio 8y ago
  We're talking about size here. Supposedly the CEO of a $50 billion company is too busy to concern himself with a lowly intern. But that $50 billion company is actually pretty small, just with a disproportionately high market cap. But also, hell yes does worth correlate with size. It's only in postmodern Silicon Valley economics that a company with twenty employees and no revenue can be worth a billion dollars. All the standard ways of pricing a stock I know of take size into account, either directly or indirectly.
  - greglindahl 8y ago
    You are talking about size. The person you're replying to was obviously talking about market capitalization. It'd be nice if people talked to each other instead of talking past each other. BTW, the standard ways of pricing a stock includes growth potential, which is why Tesla has that crazy valuation. It's totally fine if that's not the valuation technique you prefer, but it exists.
adventured 8y ago
Your valuation approach would have suggested that Facebook was ludicrously over priced at its IPO and that it was a pipsqueak compared to Google. Investors were betting the Facebook business would do what it has done: grow dramatically and more than offset the valuation having been pulled forward. Your approach collapses in the face of accounting for high rates of persistent growth. Tesla is growing radically faster than GM, which hasn't increased its sales or global market share meaningfully in 15 years. Tesla, 2016 -> 2017 sales growth: 67% GM, 2016 -> 2017 sales growth: Negative That kind of growth by Tesla universally gets you a huge valuation adjustment vs a company with zero or negative growth. Investors are betting that GM's future is not particularly bright, that there is no growth in the business. It is discounted accordingly, which is why it has such a hilariously low PE ratio (six times earnings in real terms). When Amazon passed Walmart in market value, it had minimal profit profit and 1/6th the retail sales of Walmart. The market isn't primarily valuing Tesla based on what it's doing today. It's a bet that Tesla will continue to produce considerable growth for many years to come.
- moolcool 8y ago
  >Tesla, 2016 -> 2017 sales growth: 67% >GM, 2016 -> 2017 sales growth: Negative If I sold my car on craigslist today, I'd have an ∞% sales growth rate.
ggg9990 8y ago
Tesla has 10% of GM’s employees? That’s nuts. Does GM have a lot more contractors?
- bearcobra 8y ago
  This is based on the wikipedia stats, but GM built ~9,600,000 vehicles with ~180,000 employees in 2017. Telsa built ~100,000 vehicles with ~35,000 employees in 2017
- greglindahl 8y ago
  Tesla is weird as a car company. They build more stuff in-house than usual, and they have a huge luxury car division.

deleted 8y ago

[deleted]

notyourwork 8y ago

Worth doesn't always correlate against size. Worth is what someone is willing to pay for something. Tesla may be overpriced but to disregard Tesla's value based on a size comparison is ill-conceived.

aerigniobio 8y ago
We're talking about size here. Supposedly the CEO of a $50 billion company is too busy to concern himself with a lowly intern. But that $50 billion company is actually pretty small, just with a disproportionately high market cap. But also, hell yes does worth correlate with size. It's only in postmodern Silicon Valley economics that a company with twenty employees and no revenue can be worth a billion dollars. All the standard ways of pricing a stock I know of take size into account, either directly or indirectly.
- greglindahl 8y ago
  You are talking about size. The person you're replying to was obviously talking about market capitalization. It'd be nice if people talked to each other instead of talking past each other. BTW, the standard ways of pricing a stock includes growth potential, which is why Tesla has that crazy valuation. It's totally fine if that's not the valuation technique you prefer, but it exists.

adventured 8y ago

Your valuation approach would have suggested that Facebook was ludicrously over priced at its IPO and that it was a pipsqueak compared to Google. Investors were betting the Facebook business would do what it has done: grow dramatically and more than offset the valuation having been pulled forward. Your approach collapses in the face of accounting for high rates of persistent growth. Tesla is growing radically faster than GM, which hasn't increased its sales or global market share meaningfully in 15 years. Tesla, 2016 -> 2017 sales growth: 67% GM, 2016 -> 2017 sales growth: Negative That kind of growth by Tesla universally gets you a huge valuation adjustment vs a company with zero or negative growth. Investors are betting that GM's future is not particularly bright, that there is no growth in the business. It is discounted accordingly, which is why it has such a hilariously low PE ratio (six times earnings in real terms). When Amazon passed Walmart in market value, it had minimal profit profit and 1/6th the retail sales of Walmart. The market isn't primarily valuing Tesla based on what it's doing today. It's a bet that Tesla will continue to produce considerable growth for many years to come.

moolcool 8y ago
>Tesla, 2016 -> 2017 sales growth: 67% >GM, 2016 -> 2017 sales growth: Negative If I sold my car on craigslist today, I'd have an ∞% sales growth rate.

ggg9990 8y ago

Tesla has 10% of GM’s employees? That’s nuts. Does GM have a lot more contractors?

bearcobra 8y ago
This is based on the wikipedia stats, but GM built ~9,600,000 vehicles with ~180,000 employees in 2017. Telsa built ~100,000 vehicles with ~35,000 employees in 2017
greglindahl 8y ago
Tesla is weird as a car company. They build more stuff in-house than usual, and they have a huge luxury car division.