In the past few months, Tesla’s share price surpassed $880, ten times its March 2020 low of $85, giving the company a market capitalization (or total value) in excess of $880 billion – more than Toyota, Volkswagen, Daimler, General Motors, BMW, Honda, Hyundai, and Ford combined.
That Is an extraordinary amount for a company that only last financial year made its first full-year profit since being founded in 2003 and that profit was relatively modest. It gave Tesla a price-to-earnings ratio – a standard measure of a stock’s value – close to 1,700.
Compare that to the other shares that have boomed since global stock markets rebounded from the Covid-induced lows of March 2020 – technology companies such as Facebook, Apple, Amazon, Microsoft, and Google. Amazon’s PE ratio is about 97, Apple’s about 44, and others in the 30-40 range.
We all agree that Elon Musk is a genius, but all he has been doing is creating bubbles around his businesses such as what we have seen with the crypto market (Bitcoin and Dogecoin), and Tesla. He managed to use social media to his favor and made a fortune out of his memes and interactions with his fanbase; however, people should start looking at the bigger picture. Tesla is losing money selling cars. They're making money selling credits. Why Does It Matter? Since Tesla receives these regulatory credits for free, they're able to sell them at 100% profit margins, which boosts the company’s overall margins. Tesla’s regulatory credit sales revenue in the second quarter was up nearly 200% from a year ago.
If you want to buy Tesla, buy Tesla, but have an exit strategy. Have a reason in mind in advance for what’s going to cause you to sell.
From a technical perspective, Tesla finished 4 waves up and we are currently waiting for wave 5 to develop (Weekly Chart). Look to short Tesla around $1,085 if it doesn't manage to break above this zone. Breaking above this area will push Tesla towards $1,390 before collapsing.
That Is an extraordinary amount for a company that only last financial year made its first full-year profit since being founded in 2003 and that profit was relatively modest. It gave Tesla a price-to-earnings ratio – a standard measure of a stock’s value – close to 1,700.
Compare that to the other shares that have boomed since global stock markets rebounded from the Covid-induced lows of March 2020 – technology companies such as Facebook, Apple, Amazon, Microsoft, and Google. Amazon’s PE ratio is about 97, Apple’s about 44, and others in the 30-40 range.
We all agree that Elon Musk is a genius, but all he has been doing is creating bubbles around his businesses such as what we have seen with the crypto market (Bitcoin and Dogecoin), and Tesla. He managed to use social media to his favor and made a fortune out of his memes and interactions with his fanbase; however, people should start looking at the bigger picture. Tesla is losing money selling cars. They're making money selling credits. Why Does It Matter? Since Tesla receives these regulatory credits for free, they're able to sell them at 100% profit margins, which boosts the company’s overall margins. Tesla’s regulatory credit sales revenue in the second quarter was up nearly 200% from a year ago.
If you want to buy Tesla, buy Tesla, but have an exit strategy. Have a reason in mind in advance for what’s going to cause you to sell.
From a technical perspective, Tesla finished 4 waves up and we are currently waiting for wave 5 to develop (Weekly Chart). Look to short Tesla around $1,085 if it doesn't manage to break above this zone. Breaking above this area will push Tesla towards $1,390 before collapsing.