Analysts criticise lack of detail about the ‘robotaxi’ showcased by CEO Elon Musk
Tesla shares fell nearly 9% on Friday, wiping about $60bn (£45bn) from the company’s value, after the long-awaited unveiling of its so-called robotaxi failed to excite investors.
Shares in the electric carmaker tumbled to $217 at market close following an event in Hollywood, where the chief executive, Elon Musk, revealed a much-hyped driverless vehicle. The stock price is down roughly 12% year-to-date.
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However, analysts said the event was short on detail and also expressed disappointment over a lack of specifics about other Tesla projects. Musk has a history of making grand projections about upcoming products and failing to follow through in the timeframe he has set, or at all.
But you’re comparing profit “apples” to (meaningless) market cap “oranges”. Almost everything looks overvalued that way.
Looking at a different example, Ford’s market cap is $42.61e9, and its revenue is $47.81e9, while the profit is $1.83e9, 20 times of which is $36.6e9. If we average both of them we get $42.205e9. So Ford seems to have about the right valuation.
So it’s not meaningless then, it’s useful for value investing strategies.
I suppose that’s true. But it just bothers me when people talk about the market cap like it’s an amount of money that exists somewhere, instead of being an abstract valuation.