5 ms·

TSLA Crosses $1k/Share (again)

13 points by 11thEarlOfMar 5y ago

paulpauper 5y ago
been long since 2013, and had my dad buy some at $470 (pre split) in 2020 before Covid hit, up 10x on that one. Investors are looking to a future in which Tesla is not just a auto company, but is a major player in global infrastructure , whether it's energy or transportation. It also goes to show how wrong the media was in 2020. Tesla is turning billions of dollars in profit now from sales, after losing money in 2018-2019. Anecdotally, I see Tesla everywhere now, it's no longer a niche brand. I think self-driving is also a major growth area too.
iamnotarobotman 5y ago
This isn't the first time it was $1K a share. It already was beyond that before the stock split in August last year. [0] [0] https://www.cnbc.com/2020/08/11/tesla-announces-five-for-one-stock-split.html https://www.cnbc.com/2020/08/11/tesla-announces-five-for-one...
- paulpauper 5y ago
  but is a new high
ksec 5y ago
1 Trillion Market Cap. Could someone sort of ELI5, how is this even possible?
- pydry 5y ago
  A combination of short seller punishment and an epic reality distortion field.
- lokimedes 5y ago
  Stock prices are unbound from intrinsic value. Contrary to what many hope, it is simply a pyramid scheme on top of a long-completed round of fundraising.
- 11thEarlOfMar 5y ago
  Investors for growth companies are betting on the company's future performance. The more confident they are, and the size the investors predict they will eventually achieve, determine how much investors are willing to pay. There are enough investors who believe with confidence that Tesla will become big enough to justify the current price, that they buy now. For example, if Tesla ultimately generates $50 Billion in earnings per year, (current annualized earnings around $5 Billion), and are at $1,000/share, they have a P/E of 20 (which is lower than the S&P 500 overall P/E). Current annualized unit sales are about 900,000 cars. They'd need to grow that by 10x to get the earnings that would result in a P/E of 20. GM + Ford combined sold > 10,000,000 cars last year, so Tesla would need to get as big as those two combined to justify a $1 Trillion market cap, gross margins notwithstanding...
  - ksec 5y ago
    Thanks. The GM + Ford figure seems OK to me. Given I dont see how other manufacture could catch up to Tesla in terms of EV. Possibly my biggest mis-prediction in the 2010s was under estimating Tesla and overestimating how other car manufacture would react to EV.
- Traster 5y ago
  Well, let's start by saying that we should be comparing Enterprise value not market cap because other than Tesla, car companies tend to have a huge amount of debt on board (which artificially decreases their market cap). Plenty of the big car companies have multi-hundred billion dollar values. Ford at $200Bn, Toyota at $380Bn, VAG at $270Bn. So it's not unreasonable for a good car company to be worth in the hundreds of billions. Tesla also owns some valuable verticle integration with their battery IP and probably has first mover advantage in procuring the requisite metals. Add to that unwarranted hype around self-driving cars, valuation metrics that are more suited to a tech start up than a car company, and the first mover advantage in the electric car space combined with competitors whose shareholders won't tolerate the investment required to catch up. Most likely something like the Apple Car will be the first point at which the valuation gets properly tested.
- cwkoss 5y ago
  TSLA is a meme stock. People buy it because they are convinced there is a greater fool who they can sell to in the future for profit. There is no rational way to value TSLA at 1 trillion today

13 points by 11thEarlOfMar 5y ago

been long since 2013, and had my dad buy some at $470 (pre split) in 2020 before Covid hit, up 10x on that one. Investors are looking to a future in which Tesla is not just a auto company, but is a major player in global infrastructure , whether it's energy or transportation. It also goes to show how wrong the media was in 2020. Tesla is turning billions of dollars in profit now from sales, after losing money in 2018-2019. Anecdotally, I see Tesla everywhere now, it's no longer a niche brand. I think self-driving is also a major growth area too.

iamnotarobotman 5y ago

This isn't the first time it was $1K a share. It already was beyond that before the stock split in August last year. [0] [0] https://www.cnbc.com/2020/08/11/tesla-announces-five-for-one-stock-split.html https://www.cnbc.com/2020/08/11/tesla-announces-five-for-one...

paulpauper 5y ago
but is a new high

ksec 5y ago

1 Trillion Market Cap. Could someone sort of ELI5, how is this even possible?

pydry 5y ago
A combination of short seller punishment and an epic reality distortion field.
lokimedes 5y ago
Stock prices are unbound from intrinsic value. Contrary to what many hope, it is simply a pyramid scheme on top of a long-completed round of fundraising.
11thEarlOfMar 5y ago
Investors for growth companies are betting on the company's future performance. The more confident they are, and the size the investors predict they will eventually achieve, determine how much investors are willing to pay. There are enough investors who believe with confidence that Tesla will become big enough to justify the current price, that they buy now. For example, if Tesla ultimately generates $50 Billion in earnings per year, (current annualized earnings around $5 Billion), and are at $1,000/share, they have a P/E of 20 (which is lower than the S&P 500 overall P/E). Current annualized unit sales are about 900,000 cars. They'd need to grow that by 10x to get the earnings that would result in a P/E of 20. GM + Ford combined sold > 10,000,000 cars last year, so Tesla would need to get as big as those two combined to justify a $1 Trillion market cap, gross margins notwithstanding...
- ksec 5y ago
  Thanks. The GM + Ford figure seems OK to me. Given I dont see how other manufacture could catch up to Tesla in terms of EV. Possibly my biggest mis-prediction in the 2010s was under estimating Tesla and overestimating how other car manufacture would react to EV.
Traster 5y ago
Well, let's start by saying that we should be comparing Enterprise value not market cap because other than Tesla, car companies tend to have a huge amount of debt on board (which artificially decreases their market cap). Plenty of the big car companies have multi-hundred billion dollar values. Ford at $200Bn, Toyota at $380Bn, VAG at $270Bn. So it's not unreasonable for a good car company to be worth in the hundreds of billions. Tesla also owns some valuable verticle integration with their battery IP and probably has first mover advantage in procuring the requisite metals. Add to that unwarranted hype around self-driving cars, valuation metrics that are more suited to a tech start up than a car company, and the first mover advantage in the electric car space combined with competitors whose shareholders won't tolerate the investment required to catch up. Most likely something like the Apple Car will be the first point at which the valuation gets properly tested.
cwkoss 5y ago
TSLA is a meme stock. People buy it because they are convinced there is a greater fool who they can sell to in the future for profit. There is no rational way to value TSLA at 1 trillion today