The Tesla balloon gets larger

Yesterday Tesla’s market cap exceeded General Motors for a short while. I can’t help feeling that the balloon is being pumped and some will make a lot of money before it bursts. (GM produces over 9 million vehicles annually while Tesla produces around 80,000 cars). Tesla has yet to make a profit. The revenue/debt ratio is unhealthy. The gap between revenue and debt is reducing which means that every new dollar of revenue is requiring more than one dollar of debt!!

The best investment in Tesla is, I think, to buy a well subsidised Tesla car rather than to buy stock. The original owners who have had their investments pumped up by subsidies are long gone. For those who own stock now, the key is going to be to sell before the balloon bursts.

Data sources: Market Watch, Gurufocus


 

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