Tesla with a 2% market share in the US, is valued more than Toyota, Volkswagen, Daimler, General Motors, and BMW combined (40% of the domestic market).
Toyota makes about $2,500 profit for every car sold. Tesla would need to make $50,000 per unit sold on average, or basically 100% profit on a Model 3, to justify the market cap.
That said, I have a few friends who bought it's shares and their rationale is that it's a "clean energy play", far bigger than cars and that their brand is going to be as valuable as Apple. Only time will tell I guess, everyone can put their money where their mouth is and shorting Tesla has been a pretty bad proposition so far.
P.S. I'm not trying to convince anyone here of Tesla's value, I've shared some of my thoughts before, and there are plenty other people who have done a thorough job detailing the ecosystem and its potential.
First Tesla is growing fast so that $50k will drastically go down in the coming years.
Tesla is more vertically integrated so you have to include the valuation of all the dealerships, parts of their suppliers, the charging network, ...
And third there are the “other” businesses like the battery storage, solar roofs, software revenue, ...
So overall the numbers of cars produced is probably too simplistic to compare them.
I don't agree that it's a problem. Why do you think that a silly valuation is a problem?
Tesla has 100% access to the BTCs and other asset it holds but there is no access to the market cap. Its a fictive price tag on all existing shares. People use it to compare companies. The money does not exist anywhere and certainly can not be used by Tesla.
Ben Graham, one of Warren buffet's mentors, wrote a famous book called the "Intelligent Investor" which has several chapters on doing exactly that.
Think about it...if a company sells $10 billion in stock, the new stock adds $10 billion to their market cap and they get an extra $10 billion in cash which goes on their balance sheet. And likewise, a company can buy back shares and the reduction in marketcap from destroying shares is equal to the amount of cash assets being removed from the balance sheet. There's a link here.
Eh, not really. They’re both stock (as opposed to flow) measures. And one is a subset of the other. That said, crypto as fraction of assets would be a more rigorous metric.
Not alt all. Mark cap is a fictive value. Assets hold by a company aren't fictive and are not part of the market cap at all. Market cap is simply the price of all stocks at the current market price of one.
>crypto as fraction of assets That would make more sense but also would need to include debts.
There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.
depend on the liquidity on that day also they could OTC sell so yes they can probably get the market price. However telling the market fist isnt going to help.
>There’s a reason companies list “cash and equivalents” and BTC isn’t included in that line on the balance sheet.
Yes, the reason is volatility and uncertain liquidity. To compare BTC with cash equivalents you could use volume adjusted price over the last months, that would give a good short term cash value. But long term ofc its impossible to know what it may be worth.
Not quite sure how that's relevant to what I said, namely that assets hold by a company are not comparable to the companies market cap.
What exactly is stopping them from borrowing against their shares?