Tesla Melts Up

Bubble popping cartoonTesla, Inc. (TSLA:NASDAQ), as I noted in a comment a few days ago, then had market capitalisation (stock price times number of shares outstanding) more than three times that of Ford Motor Company (F:NYSE), despite Ford’s revenues being more than seven times those of Tesla and Ford’s FY 2018 earnings of US$ 3.7 billion being somewhat greater than Tesla’s loss of US$ 69 million for FY 2019.

What a difference a few days make!  There now appears to be a cataclysmic short squeeze and/or buying panic in Tesla stock.  Here is a ten minute chart for the last few days.

Tesla stock chart

Tesla, which seemed absurdly overpriced around US$ 600/share, surged above US$ 900 in early trading today.

Here, courtesy of ZeroHedge, is Tesla’s recent blow-off superimposed on the 2017 Bitcoin bubble and crash.

TSLA 2020 vs. BTC 2017

For those with a longer historical perspective, here is Tesla stock superimposed on the South Sea Company bubble in the 18th century.

TSLA vs. South Sea Company

Isn’t it great to see rational investors pricing the future value of assets in an efficient market?

Greater fool theory venn diagram

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Author: John Walker

Founder of Ratburger.org, Autodesk, Inc., and Marinchip Systems. Author of The Hacker's Diet. Creator of www.fourmilab.ch.

7 thoughts on “Tesla Melts Up”

  1. I am far more interested in the Mustang MachE and the Electric F150. I do believe Tesla will be the DeLorean of the 21st Century. When reliable $40000 cars are rolling off the line, then I will be impressed….

    If only Musk had stopped trying to reinvent mass production…Making quality cars in high quantities with customizations is a solved problem.

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