Tesla Inc.'s stock recovered after the steep fall during the previous months. Tesla turned profitable in the third quarter of 2018 mainly due to sales booked for future periods. The current price of Tesla's stock is 357.96 USD.
What is the real, intrinsic worth of Tesla's stock today? In my opinion, Tesla stock is worth 200 USD currently.
Why? Because Tesla and the electric automobiles business is inherently uprofitable without government subsidies. As Elon Musk recently confessed, Tesla was on the brink of going bankrupt. An innovative company with huge aspirations and potentially disruptive and inovative product should never have come close to going out of business. The company is constantly burning money. The ferrous metals contained in electric vehicles are too expensive to produce a mass market car. Tesla pins its hopes on the model 3, but it is nearly impossible to produce the model 3 profitably at scale. Elon Musk does not seem to have the know-how to produce automobiles at scale.
Absent government subsidies, the business with cars running on electricity is simply not viable. If Tesla does not achieve a technological breakthrough which would help it produce electric automobiles profitably, the company could go bankrupt in the long run. Even with the profit in Q3 2018 Tesla would still most probably record a huge(more than 1 bln. USD) loss for 2018.
In short, I think Tesla's stock is worth around 200 USD currently.
Disclaimer:
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are provided solely for informational purposes, and do not constitute an
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expressed in the blogpost and posts on social networks(Twitter, LinkedIn etc.) are the author's and they in no way express the opinion or official position of the company where I am working currently!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Conflicts of interest: I may possess some of the securities,currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!
Kind regards,
Petar Posledovich
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