The Tesla Bubble

In a world governed by algorithms and headlines, there is a new kind of misinformation that occurs. It’s sentiment. Lately the stocks of Apple and Tesla have defied all logic, all bases in fact, and driven up markets in an artificial manner.

At the Last Futurist, I call this phenomenon the “Tesla Bubble”. Brands like Apple and Tesla can effectively hack the system of consensus that the stock market represents on companies and artificially boost their valuations. Tesla, of late, is a great example of this.

It’s hard even to put this in context. The Tesla bulls have been so crazy. Tesla’s stock is up 54% in 2020 so far as Elon Musk thinks Tesla will sell over half a million vehicles.

The Stock Market is Significantly Distorted in 2020

Tesla’s stock was $223 in September, 2019. Guess what it is now at the end of January? It’s $642. That’s not a stock market that has much bearing on the facts. Tesla has always been a volatile stock but this is ridiculous. I like Elon Musk as much as the next guy, but this promise of 500 thousand vehicles is the same promise he made in 2018!

The Tesla Model Y is now in production, months ahead of schedule — and deliveries are expected to begin in March but these are antics without Tesla having overtaken Volkswagen as world’s second most valuable carmaker. Tesla brands itself as a technology company competing against legacy automobile makers.

Can Tesla really be the leader in the shift to EVs and self-driving vehicles? It’s unlikely, but it will be the first-mover perhaps.

Behind all the shiny headlines is a deceptive market that’s not in touch with reality. As good as the numbers were for its earnings report, it’s not even a mature company. Its new factory in China will be totally stunted by the coronavirus impact.

If Tesla is a Dream, Elon is a Prince of Illusions

Tesla’s stock has more than doubled in value in the last three months, with its market capitalization piercing $100 billion, but if life were a dream, I’d pick SpaceX over Tesla. Electric vehicles are important but and Tesla’s brand name is strong. However this should not mean its stock escapes all realistic sense of valuations.

The company topped analysts’ estimates for quarterly profit and revenue and posted a second consecutive quarter of profitability. Tesla said it expected 2020 deliveries to “comfortably exceed” 500,000, quashing analysts’ once prevalent fears about supply.

But as a market leader, its stock is now grossly over valued and displays an algorithmic web and algorithmic trading that’s totally deceptive to any sense of honest valuation.

The Tesla and Apple bubbles are displaying a stock market that’s not behaving in the spirit of truth and fact. I could make an argument for how Apple’s valuation is also over valued but Silicon Valley hype has meant a few brands stand on top of a pyramid of how sentiment hacks the internet and now even the stock market.

When a CEO is a dreamer full of promises that border on pathological lying, it’s not always good for the end game of a brand. Tesla’s valuations have exceeded the realm of reality. Let the shorting game and stock charade begin again. EVs aren’t even that popular yet.

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