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Company founder and CEO Elon Musk may not mention Tesla Motors Inc's (TSLA.O) stock price when his electric car company gives its latest financial update on Wednesday, but it will be front and center for investors divided over its seemingly rich valuation.
After a rally that ended in April, Tesla's market capitalization is currently about $31 billion - equivalent to $620,000 for every car it delivered last year, or $63,000 for every car it hopes to produce in 2020.
By comparison, General Motors Co's (GM.N) $48 billion market value is equivalent to about $4,800 for every vehicle it sold last year.
Tesla's heady valuation - about 125 times the next 12 months of expected earnings - and the implication that shareholders may be overpaying for Musk's small but fast-growing luxury car company have made the stock a favorite of short sellers.
Source: Reuters
(Score: 0) by Anonymous Coward on Thursday May 05 2016, @01:31PM
Yes you may be right to dismiss it given the source, but remember the old adage: "even a broken clock is right twice a day."
The value of Tesla hinges on combined value of the brand, which is a lot of things from the IP, to image, to track record of delivering products that are exceptional and innovative (which speaks highly to talent of management and engineering teams). These things do posses value that is somewhat intangible and can vanish overnight. Say your competitor makes a discovery that renders your technology obsolete, or huge number of your employees go to work for a competitor, poof goes that value. I suppose you can call that type of foundation sand, because it is more fickle than land, mineral rights, or means of production.