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What the hell is happening with Tesla stock price? 400% growth in 5 months? 70% in a month? Tesla added $51 bn on Monday alone. Digest that.
What do you think? Regretting not buying Tesla stock or Are we looking at some bubble burst?
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Was Elon Musk right when he said- Tesla stock price is too high?
- Tesla has become a $600 bn company as of December 2020
- On Tuesday (17th Nov) alone the stock rose by 12% that means $51 bn
- Current Market capitalization of Tesla = Pepsi + Coca Cola + General Motors. Remember these companies are industry leaders with solid fundamentals
A brief comparison of business fundamentals
TESLA sold 360,000 cars whereas GM sold 7.7Mn cars in 2019
EBITDA of GM = $8.3 bn ,
Tesla= $3.5 bn
Free Cash Flow of Tesla = $800Mn
Walmart= $11.5 bn
So clearly fundamentals are not the reason for the Tesla Stock Price rise. Suddenly the world has not decided to become all ELECTRIC also.
Then What is Happening?
After four straight quarters of profitability, Tesla is finally eligible to be included in the S&P 500.
Tesla will officially join the benchmark S&P 500 on December 21.
BUT IS THIS DEVELOPMENT ENOUGH TO EXPLAIN THIS RISE?
The Real Questions we Need to ask
How far it will go? Is it just the snowball effect that these developments are creating?
Is its sustainable? Sooner or later all car companies will come with EV.
Or Are we looking at an impending bubble burst?
Fun Fact about Tesla
Tesla is nowhere in this list but has a market capitalization almost (about to be) equal to all these top automakers combined.
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