Dear Reader,
Tesla Inc., the electric vehicle manufacturer, is again being driven up by the stock market. Tesla's stock price currently stands at 810 USD, a small amount away from its all time daily close high of 901 USD.
This development is intriguing since only days ago California denied to open immediately Tesla's Fremont factory.
What is more, I doubt many people are very eager to get their hands on the next Tesla vehicle in the coronavirus disease COVID-19 pandemic economic lockdown. Apparently, there is a huge amount of idle cash moving around, tiny part of which finds its way in Tesla's stock. Central banks are creating monetary reserves, Aka printing money thus supporting many zombie companies all over the world.
No, I do not think currently Tesla is a zombie company. I just think that Tesla's intrinsic value today is about 50 billion USD compared to 150.1 billion USD market capitalization the US stock market is attributing to Tesla.
To substantiate its current market value Tesla has to take something like 20% of the global automobile market and also start reporting profit, that is net income. As of now, electric vehicles remain a very niche market with very small numbers of sold cars compared to internal combustion car sales. Tesla has a lot to prove and I now think only part of these expectations will be realized in the next 5 years. Furthermore, Tesla is burning cash, so the company must keep a close eye on its liquidity. Otherwise, Tesla might become a restructuring story.
Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".
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.)!
Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.
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.)!
Respectfully yours,
Petar Posledovich
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