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Writer's pictureJoe Andrews

Speaking of: Tesla's Valuation

Tesla hit a $1 trillion market cap today.

Just let that sink in.

I am extremely bullish on the future of Tesla. But is it worth double the market cap of GM, Ford, Honda, and Toyota combined?

Is it worth almost 4x the valuation of Toyota when it produces less than 10% of the cars Toyota does?

Is it worth 16x the market cap of Ford when Elon Musk has said Tesla's core competency will soon be manufacturing, and Ford has excelled at this for decades?

Valuations aren't black and white. You're allowed to be critical of a company's valuation even if you're optimistic about its longterm potential. I'm a big believer in Tesla. I'm also a big believer that Tesla is not a $1 trillion company.

Let's dispel with this notion that meme stock traders are the only insane ones for buying GameStop stock at over $300 a share last January. Buying Tesla stock today is equally as crazy in principle. Would I do it? Quite possibly. But, much like GameStop, is it just gambling at this point if the investment isn't based on any discernible financial metric? Absolutely.


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