Tesla now has as high a market cap that is nearly as large as BMW and VW combined. An article by Spiegel noted a few days ago that Tesla [TSLA] had surpassed the two, but the stock has dropped a bit since then. Nonetheless, it’s still close.
In the article, the writer points out that Tesla is called “Bitcoin on wheels” by a critic, despite the fact that Tesla is the leader of the EV revolution — by far.
Tesla has a lot of good things going for it. As a result, the other day, Tesla’s share price flirted with $1,000 per share. Spiegel points out that Tesla’s market value has climbed to more than $132 billion (an even $135 billion at the moment), which makes it worth more than the combination of BMW and VW.
Tesla is still the #1 shorted stock on the market, with 24 million shares in the hands of short sellers (people who are betting that the stock price will fall, and in some cases that the company will go bankrupt). Last week, Tesla short sellers had paper losses of more than $5 billion in two days. Many of them are still shorting the stock.
The idea of “Bitcoin on wheels” makes one think that Tesla is overhyped in regard to its value. For those who don’t understand that analogy, Bitcoin had a lot of value in 2017, when it was almost $20,000 per BTC, then it crashed to just over $6,000 by early 2018.
Gordon Johnson of GLJ Research thinks that 2020 will be a disaster for Tesla. He is basing his thoughts on Tesla’s net loss of $900 million and the fact that sales in the fourth quarter rose by 2%. It seems he isn’t looking past 2020 at the larger picture. He doesn’t seem to realize that in 2020 Model Y deliveries will begin and the Semi will be in production. Plus, Battery Day and another Autonomy Day are coming, in which Tesla will probably show how much further along it is than competitors on these critical topics.
Despite what Tesla’s critics believe, the German automotive industry, according to Spiegel, sees Tesla with a lot of respect. Volkswagen’s Herbert Diess said, “We are valued like an automotive company. Tesla is like a tech company. The time of classic car manufacturers is over.” VW wants to be where Tesla is, and is hoping it will be soon.
I think the main reason why Tesla’s value has skyrocketed is due to the fact that it is a tech company that has focused on breathing fresh air into an industry that is over a century old. Tesla is doing for vehicles what Apple did for phones and computers and even watches. Its value will only increase as Tesla continues to establish great products that are a balanced mix of tech hardware and tech software (that drives). Tesla’s worth isn’t just in the numbers — it’s in the products. It’s in the product design, the tech, and the contributions toward protecting our environment as well.
Tesla’s worth is determined by a need that it is meeting. People want cleaner vehicles — vehicles that produce zero emissions and reduce their carbon footprints. This is why Tesla’s worth cannot be priced — it’s priceless.