> Unfortunately "fundamental value" doesn't mean shit in a popularity contest where you have a lot of retail money investing in whatever they happen to like.
We can all disagree on what the proper valuation of Tesla really should be, and there are good arguments on both sides, but this comment exhibits a fundamental and simplistic misunderstanding of how stocks such as Tesla are valued, and it's something HN as a group needs to do a much better job at understanding. To say that its valuation is purely based on a "popularity contest" is simple enough that it feels right, but is dead wrong.
The value of any asset is the present value of its future cash flows. In other words, find all of the cash that a company (or any other thing) will ever generate, sum it all up, and then translate that cash back into a value today using an interest rate you choose (since cash today is worth more than cash tomorrow). With that behind us, it's fair to say, "Ok — but how in the world can you ever know how much cash a company will generate next quarter, let alone next year or throughout its entire existence?" And that is the challenge of valuation, especially at this stage - Tesla's future cash flows will vary wildly based on whether or not it can execute.
That's why growth is so important in startups and other relatively young companies. If your company has revenues of x and will grow them at x^n, the n will matter so much over time that the x is nearly irrelevant. Because these sort of projections are often overly optimistic, HackerNews has become incredibly biased against this kind of valuation, and tends to focus on the times when it's way too high. But in doing so it ignores the times when they're way too low - something that's very easy to do. Everyone was saying Instagram was an obvious sign of a bubble when it was bought for $1B, but now it kicks off over $1b in revenue every year. We cried "bubble" along with DHH when Facebook was valued at $33B, and now it's comfortably at 10x that, spitting of $8B in revenue per quarter. The likelihood of that growth curve and those projections being wrong is usually priced in.
The question around Tesla isn't whether or not their market size will be big enough if they do what they say they're going to do (they're building the largest battery factory in the world, building an electrical recharging grid, have easily the largest data set anywhere for self-driving cars, etc.), but whether it's possible. That is Tesla's fundamental value, and fluctuations in its price are based on disagreements around what its fundamental value actually is.
So maybe that all comes to naught; maybe Tesla is wrong. That risk is priced in. Tesla's market cap is roughly the same as Ford's.
I'll just say that, for my money, if I had to choose whether I would own 100% of Tesla in 20 years or 100% of Ford, I would choose Tesla in a heartbeat.