Ask HN: Why is Tesla worth $420B?
Stock is trading at all time highs but it’s delivery numbers seem to be roughly the same over the last 6-8 quarters or so.
It’s now more valuable than Johnson & Johnson and Visa.
What’s going on here?
It’s now more valuable than Johnson & Johnson and Visa.
What’s going on here?
Can you please elaborate on this? How exactly is this happening? Why specifically country clubs and gated communities?
Securities purchases - still buying mortgage backed securities (is it 2008?)
Lots of lending and backstopping so rich don't lose.
https://www.brookings.edu/research/fed-response-to-covid19/
In some cases the majority of stimulus went to millionaires and big business.
The bet is they can sell about 4 million cars in China, I think. That can justify the 200 billionish projection.
Toyota sold something like 10 million cars globally in 2019. If Tesla really is the best electric car people want, it should just be a matter of ramping up production.
Edit: My numbers were all based on 200 billion valuation mistakenly, so just double everything.
That includes: VW, Porsche, GM, Ford, Daimler, BMW, Toyota, Fiat Chrysler, Honda, Hyundai, Nissan Renault, PSA, Suzuki. Combined.
Regardless of however long the ongoing stock market mania lasts, it's obviously going to obliterate a large number of shareholders on the way back down. There is no scenario where Tesla can fill in even a modest amount of that market cap.
Toyota is their absolute most extreme best case scenario. Toyota is worth less than 1/2 what Tesla is today. It would take decades for Tesla to get as large and profitable as Toyota if everything works out perfectly.
So while they sell cars and that is the majority of what they are known for now... it’s believed in the future they will be worth more because of the AI and storage businesses
I think at this point the only Automaker that can follow up Tesla could be Toyota or VW.
With 420B market cap Tesla is worth more than Walmart who had 14B profit last year (half of whole Tesla 2019 revenue) and 500B revenue (20x of Tesla revenue)
It has nothing to do with true or real value of underlying company
The reason that it's happening?
So, one part of it is government driven: 0% rates, FREE MONEY, money printing press goes BRRRRRRRRRRRRRR.
Now for Tesla, it's the kids. The same that popped up cryptos through the roof in 2016-7.
Nowadays they are at r/wallstreetbets using robin hood.
Institutional investors are enjoying the ride as well.
People aren't also questioning FAANG and MSFT huge market caps without the same growth in the bottom line. Sure,, those companies are doing well, but they valuation rose much higher than they are able to give returns to its investors.
It's the same problem. I have 0 positions on those stocks because they are like cocaine for the mind and this will all eventually crash. Gold and real things are your best bet.
If it doesn't crash now, it means that there'll be a huge debasing of the dollar to match those valuations. There's just too much money in the economy and very little being produced.
I believe what we may see is that the dolar vs other currency pairs will devaluate a lot, meanwhile inflation will remain low for a little while and then it will hit everybody very hard, because it means for every imported good Americans will need to pay much more.
FED has a huge issue that it can't hike up interest rates or start cleaning up his huge balance and when inflation comes for real(not the 2% they expect, but more like Argentina style inflation), they won't be able to lower that inflation without literally stopping the economy.
It's as if QEs are hiding dust under the carpet to make the house look clean. Initially, it indeed looks clean and there's no impact. Even after a while it is still fine. But now there's like a mount everest of dust and the carpet can't hold it any longer. Once shit hits the fan, all americans(and western people) will feel it.
Americans like to believe in the fallacy of the reserve currency. Currency is currency. Every single currency can end up having huge inflation and turning to dust if enough money is printed. US has been able to get around having this problem because so many countries are dependent on it, but there's a limit and the writing is on the wall that this limit has been already reached. And when countries stop relying on US Dollars as it suffers too much debasing and can't be reliably used for trade anymore, the country we know as USA will just implode, because it's only real product it exports is the Dollar, which will be worthless.
World Economy will shift to China and Asian countries which produce most of the shit western economics consume and we'll have a new world order. It's about time.
It might seem speculative, but OP's comment is based on how economics works, so the storm is about to hit. The big question is when? And how should we prepare?
[0] https://www.cnbc.com/2020/06/29/the-fed-is-buying-some-of-th...