Tesla Hits $1 Trillion In The Worst Way

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Notice the word ‘forces.’ That’s not something you want to use when speaking about investing. Investing should be a thoughtful exercise that weighs the risks, rewards, and opportunity costs. When an outside entity removes the opportunity costs, it distorts the other two. As we note in the main article below, Tesla is a great company. But giving it a $1 Trillion valuation is bonkers. We’ve put ourselves in danger of teaching an entire generation that risk management is irrelevant, from Buy-Now-Pay-Later to 0.00000001% interest rates on savings accounts. Critics argue that household savings and debt is at their highest levels in decades. That’s true. Especially when you have nothing on the shelves to buy and a massive transfer of debt to the public (government) accounts. Why bother with such nuances when you can just buy a SPAC with no purpose or history? Sponsored [A medical breakthrough?]( This biotech stock's moved as much as 200% and could have 150+% upside. [See why.]( Stocks Tesla Hits $1 Trillion In The Worst Way Key Takeaways - Tesla hit a $1 Trillion valuation on the back of a deal with Hertz. - The EV company has the lowest sales and profits of any company to ever hit the $1 Trillion market cap. - Multiple measures (shown below) speak to the insane valuation. - None of this means the stock has to go down. [You Dont Belong Here Bow GIF - You Dont Belong Here Bow Serious Face - Discover & Share GIFs] $1 trillion isn’t for the faint of heart. Only 6 companies ever hit that level. And Tesla is by far the worst. How Can You Say That? Let’s look at the yearly revenue of each company that hit $1 trillion as [published by Bloomberg.]( Tesla turns a profit at $3.6 Billion. That’s still 1/10th the amount of any of the other companies that hit the $1 Trillion. What Frothiness Looks Like While not every stock that goes straight up must come back down, history tells us that’s very likely. This is what we’re talking about. Tesla reported earnings that were good, but nothing mind-blowing. Does that justify a company valuation 40% higher than a few weeks ago? What about almost 20% this week? Yes, we did see a fantastic deal between Hertz and Tesla for a massive order. But did anyone really expect Tesla would have trouble selling their cars right now? Their biggest problem is the company can’t produce ENOUGH cars. Here are some facts to think about: - Tesla’s value is 15x higher than Ford’s. Yet Ford’s revenues were ~3.5x higher than Tesla’s. - In 2017, Tesla generated negative operating cash flow. Elon Musk worked 120 hour weeks and admitted he didn’t know if the company would make it. - Tesla is worth more than 19 other automakers combined, pretty much every other major automobile company and then some. The Bottom Line: None of what we’re saying should take away from the incredible business that is Tesla. But valuations are ludicrous. That doesn’t mean they can’t become more ludicrous or stay ludicrous for a very long time. #ludicrous. News & Insights Freshly Squeezed - [Mark Cuban Stock Portfolio: 10 Stocks To Consider]( - [Will President Biden Start Nuclear War With China Over Taiwan?]( - [New Home Sales Increase to 800,000 Annual Rate in September]( [Make sure to sign up for The Juice to keep receiving our premier investment newsletter.]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright ©2021 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. 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