Comment by sbf501 | Hacker News Reader

Comment by sbf501 | Hacker News Reader

Parent Full thread

This is implicit when understanding market cap. Market cap means yes, a certain number of people willing to buy Tesla believe it is worth the combined cap of the next 10 auto makers. It doesn't matter if that is right or wrong, all that matters is that stock traders believe it. If they didn't, the stock wouldn't be that price. That is literally how the stock market / market cap works: if someone will buy it at that price, that is what it is worth.

We can all offer our armchair theories about Tesla's actual worth, but until traders start to move en masse, that is what it is worth right now.

I think you are asking a different question: will Tesla be more profitable than the other 10 manufacturers in the long run? Because right now they are not. Personally. I don't think they will ever scale to a commodity car as long as Elon is at the helm. I don't think he has the attention span to make a mass produced car, his ego likes doing something novel and he likes luxury. To make profit like the top 10, Tesla has to become a commoner car. I don't think he can pull off an iPhone move, Tesla may always just be a Mac.

I know several people that bought Tesla stock in the last 3 years, and I know for sure that none of them think about it in terms of being worth more than most of the other companies or combined. They bought the stock because they like the cars, see the cars often, and most importantly, they think the stock will rise and make them money.

They don't know how many outstanding shares there are, what the market cap is relative to others, or even care about profit ratio is. They just think it's going up.

> and he likes luxury

I would argue otherwise, his movement in the recent past showing.

I'll bite: what is your argument?

Didn't Elon sell the house and moved to live next to the factory?

Yes, he sold his seven or so mansions in California when he moved to Texas last year, and claimed to go possession free living in a $50k tiny house.

First off, one would have to assume he suddenly swore of luxury after seven mansions. Perhaps. He does say a lot of dumb stuff when he's stoned that he ends up trying to hide later on (e.g., submarine scandal).

Second, he doesn't seem to spend too much time in his tiny house:

https://www.msn.com/en-us/lifestyle/home-and-garden/elon-mus...

Third, where does he keep all those tuxedos he keeps showing up wearing at exclusive events for billionaires?

Fourth, he's got like 10 kids and multiple wives. And he keeps getting women pregnant. That's literally a luxury.

Maybe we have different definitions. Sure, he owns a cheap house this year that he seems to not live in, but cavorting with other billionaires and treating women like breeding stock and throwing cash at offspring so you don't have to bother raising them doesn't really strike me as living a lean life.

Reply on news.ycombinator.com