Tesla is massively profitable. The vagaries of the stock market are just a distraction, what matters is profits, and Tesla has lots of that. Other companies will want some of those sweet profits too.
When you buy a share you do not care about the profits in the past, you care that the company will generate profits and thus increase its value in the future. The only reason people care about past profitability is in how it can help you predict future profitability.
This is also the reason why companies can be generating losses quarter after quarter and still be gaining value -- as long as there exists expectation of future growth and profit.
And in case of Tesla a lot of this expectation of future profits and growth was based on charisma of its owner and on belief that he is the force behind Tesla's spectacular success.
Starting one successful company is impressive but can be partly attributed to luck. Starting multiple hugely successful global multi-hundred billion dollar companies is not luck at all, especially when you spend a moment learning about Elon's work ethic and his tight grip over everything.
Now, if you are an investor, it seems the owner lost its focus and made a bunch of questionable decisions. This puts a huge question mark on whether he will be as involved and as effective with Tesla in the future.
Not even a little bit. Musk has a charisma of a bag of potatoes.
What matters is that Tesla had 10 years of 50%+ revenue and unit growth, on average. They performed better than any of the FAANG companies.
With Giga Berlin and Giga Texas ramping up, Cybertruck, refreshing Model 3 for lower cost of production, ramping 4680 battery production, lithium refinery in Texas, Inflation Reduction Act in US => the 50% growth the company is guiding for in the next several years seems to be in the bank.
Charisma is not an absolute and objective measure. Some people will find Trump charismatic to them, some people will see him completely opposite.
I personally find Warren Buffett very charismatic, some people will probably see him as an old and wrinkled guy who is boring them with stories they don't care about.
As investors are generally mostly interested in money, ability to get shit done and generate profits reliably IS charisma.
A Toyota share is $145.55, and its EPS for the same period is $16.82 [2]. That means 11.6% per year.
[1] - https://companiesmarketcap.com/tesla/eps/
[2] - https://companiesmarketcap.com/toyota/eps/
If Tesla is massively profitable, Toyota is 5 times so.
1. https://www.sec.gov/ix?doc=/Archives/edgar/data/1318605/0000...
The market looks to the future. A company with 95% earnings growth deserves much higher P/E than a company with 16% earnings growth.
Tesla and BYD are clearly dominant players in a rapidly growing EV market.
Toyota is a laggard among other laggards. With a single EV only introduced for sale this year they are behind pretty much everyone.
VW is on pace to outsell Tesla in a little over a year, they're just one competitor.
I now see just as many Polestars and VW id's as Tesla's in the UK ... it's quite remarkable how much things have changed from Tesla being the only real game in town just a few short years ago.
Guy believes in manifestation and self-fulfilling prophecies, fake it till you make it type strategy.
General Electric employed the same strategy too with all its financial engineering but at the end of the day you are still making turbines in the real world and with anything manufacturing you have razor thin margins. Of course we came to know about it only after