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Because the bet is that in 30 years, Tesla will still be here and the legacy companies will not, having failed to pivot to the emerging markets. Yours is the s
by newacct583 6y ago
Because the bet is that in 30 years, Tesla will still be here and the legacy companies will not, having failed to pivot to the emerging markets.
Yours is the same logic that has been deployed against tech industry P/E ratios for decades. No, it doesn't make "sense" per the balance sheet. But it's clear what the bet is.
- est31 6y agoSome legacy companies will certainly fail the pivot, but I think it's wrong by the stock market to be so certain that they will collectively fail.
- newacct583 6y agoWell, it doesn't bet that they'll "fail" exactly. It's simply betting that they aren't going to grow. The collective opinion of Wall Street is that the only value to owning Toyota or GM or Volkswagen stock is the immediate value: dividend payments, the value of liquidatable assets, etc... But with Tesla, the bet is that in 30 years that company is going to own most of the market all these existing firms do. That may be wrong, but like I said it's clear that this is the bet.