Welcome to the new age of capitalism, where companies don’t have to make money to uh… make money. Case in point: the cult of Elon Musk is out in full force on social media after Tesla stock shattered the $100 billion mark on Wednesday. And boy are they smug:
According to this fool, Musk is on course to becoming the world’s first trillionaire. No small feat since, last I checked, Forbes lists him at 40th in the world rankings.
Flaunting a “measly” net worth of $22 billion, Musk is going to have to double down on his efforts if he’s ever going to achieve that lofty goal.
Tesla’s (NASDAQ: TSLA) surge to a $100 billion market cap is absolutely ludicrous. The electric vehicle pioneer is now more valuable than all three German automakers. It also sold 30 times fewer cars in 2019 compared to VW:
The data speaks volumes and yet that’s still not enough to convince Twitter devotee’s from worshiping at the altar of the Musk:
It represents that Tesla has the best technology and EV’s, and best software and full self driving in EVs, and Tesla is going to sell millions of cars, and put legacy auto makers out of business.
That’s a lovely utopia and I’m sure many of us would love to live in it, but it just doesn’t make any logical financial sense. Tesla’s sky-high stock is already massively overvalued and in 12 long years it still isn’t making any money:
I’m not sure there is a path but for the sake of argument let’s follow the hypothetical Tesla CEO performance line.
According to the trillionaire tweet, Musk will first have to grow Tesla’s market cap roughly 6 times from current levels.
He’ll then own 30% of the company and supposedly knock Bezos off the throne with a personal fortune of $195 billion.
Billionaire rivalries aside, what astronomical price would Tesla’s stock have to reach to achieve that goal? Thirty-two Wall Street analysts, surveyed by FactSet, believe that TSLA is worth only $375.01 a share.
Assuming he achieved this miraculous feat, he would then still be five times short of the mythical trillionaire figure. How to make up the difference? Hmmm.
The only way this insanity will manifest is through the continued Ponzi financing of the fed. Anyone who believes this stock market, and by extension Tesla, will go up ad infinitum is deluding themselves.
People love flinging large terms like ‘billionaire’ or ’trillionaire’ around but, in truth, they have little meaning. If some mook at the fed can push a button and add a couple of billion dollars to the money supply, what’s the point?
Don’t get me wrong, Musk’s goal of overhauling the auto industry is a noble one. But these same worshipers should get a little perspective, Musk ain’t no profit-yielding savior.