Tesla has become a $1 trillion company
Shares are at an all-time high but will it last?
On the 25th October 2021(day of writing) Tesla has become a $1 trillion car manufacturer as the share price at the time of writing is $1,024. They join the elite club of Apple, Amazon, Microsoft and Google parent company Alphabet. This peak in the share price has led to Elon Musk gaining $28 billion to his net worth which now stands at $281 billion which is $88 billion more then the $193 billion that Jeff Bezos possesses in second place.
The reason for this latest surge is that Hertz, a rental car company, has recently announced that it has placed an order for 100,000 Tesla Model 3s to form the largest EV rental car fleet in North America and in the long term globally. They intend to take delivery of this $4.2 billion purchase by late 2022.
Another factor in this is that the Tesla Model 3 was recently announced as Europe's best selling car in September 2021 with 24,600 sales across the continent which was 2.6% of the market share.
The last major at play here is that Tesla recently released Q3 profits of $1.6 billion and 241,300 units which is 101,761 more then the 139,539 sold in Q3 2020.
That profit margin does possibly present a problem for the valuation though which is that if $1.6 billion is multiplied by 4 to simulate a year like the last quarter then you have a profit of $6.4 billion per annum. That contrasts with a valuation of $1000 billion. That means the amount of time it would take for the dividend yield to make the investment pay for itself equals 156 years. That compares to 35 years if you invested in BMW for example which has a 2.83% dividend yield. At least that is within one's lifetime.
Can the Tesla stock hold on to its value?
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Comments (18)
Hopefully it won't last. The EV revolution is futile and they continue to fuel it.
Maybe it is. I guess we'll see how this is remembered in 20 years time. It'll either be seen as the turning point to the future or the peak of the bubble.
The EV revolution is just a ticking time bomb waiting to explode. There is no way on this Earth it'll end up being worthwhile. Climate Change is predicted to be pretty much unstoppable by 2040. If we get even 80% of the required infrastructure...
Read moreSome of you need to get over yourself. It’s a successful company. DEAL WITH IT.
IKR
Tesla is now worth more than the GDP of Saudi Arabia. And 5x that of Iran, along with being close to the GDP of Russia. They are worth more than the largest oil producers on earth.
TBH, Tesla stock has made my family a $500,000 richer... So I really can't complain
A trillion company and they haven't managed yet to build any ICE.. What a shame!
That last why the valuation is so high. They’ve not just stole market share, they single-handedly created a new playing field. As good as the ICE can be, it’s still only 40% efficient. Why would you invest billions to eek out a couple of extra...
Read moreStill, their autopilot seems to have the highest suicide rate on the market considering the number of time Teslas are crashing into police cars. Maybe Teslas are secretly dreaming of having an ICE 😂