Tesla stock is down like the rest of tech, but is this a sign of worse to come?
- 993 billion dollars was Tesla’s market cap at the start of this year.
- 687 billion dollars is the current market cap.
- Down 30.8% or 306 billion dollars.
Tesla as a stock has risen massively the last five years and beat a series of people shorting it or doubting the stock.
52 billion dollars was the market cap in 2017 and five years later, even with the stock down, it’s still up over 1,000%.
That being said though, the market cap hasn’t ever made much sense.
- 11.8 billion was the 2017 revenue.
- 54 billion was the 2021 revenue.
- A 357% revenue growth.
Sounds good until factoring in profit, which was 5.5 billion, largely due to selling tax credits they received for selling electric cars.
Tesla peaked at a market cap of a trillion dollars, which is very poor compared to other trillion dollar companies.
Just a fast comparison.
Microsoft-61 billion in profit
Google-76 billion in profit
Apple-94.7 billion in profit
Amazon-33 billion in profit
Tesla was at a similar valuation to those companies worth over a trillion, but for most of them, was under 10% of the profit they had.
The only one close was Amazon at 6x profit, with also 410 billion more in revenue than Tesla.
This put a clear case Tesla was overvalued, where most of the valuation was just due to the hype of Elon Musk.
Making a lot of videos bashing Tesla stock, I’ve seen some pretty similar excuses, which all go into “Tesla isn’t a car company, it’s a tech company.”
That being a tactic, when mentioning Tesla was worth more over the entire auto industry combined, despite being only 2% of revenue and 3% of profits.
The response was always pointing out the following.
- Claiming Tesla was a data company, which all the other car companies now have similar tools for data and Apple, Google & Uber all have the same if not better data.
- Pointing out products like the Tesla Robot, which are in fantasy land development phase and no different over the Honda Asimo.
- False claims tesla has a tech edge, where they aren’t ahead of self driving and battery tech doesn’t belong to them, with Panasonic making it.
So big question, is this the collapse of tesla, where the bubble burst or part of the bigger problem?
- Facebook is down 43% this year.
- Apple is down 25%.
- Google is down 25%.
Almost every tech stock is down and Tesla being down the most doesn’t mean a collapse, it just means they are seeing the decline a little harder.
I don’t think the Tesla crash is at this point anything besides part of a general crash on tech stocks, but could be the start of a bigger problem.
Tesla though will suffer more in the future, similar to Netflix.
Volkwagen got into electric cars in Europe and has since beaten Tesla for being number one in new electric car sales.
Volkwagen is coming to the US for electric this year.
Ford, GM, Honda & every other car brand is also coming out with an electric car in the next 6-24 months.
79% of electric cars in the US are Tesla.
That number will likely soon go under 50% and probably in the next 3-5 years have one car company surpass Tesla.
That’ll be the moment of the real collapse, where the market cap falls under 200 billion dollars and millions lose money on it.