Monday, August 31, 2020

Tesla at $500 Billion

He did it. The fully diluted market capitalization is over $500 billion. It's bigger than every other U.S. public company except Apple, Amazon, Microsoft, Google, and Facebook. It has just edged out Berkshire and exceeds Visa and Johnson and Johnson. There would be no excuse not to include Tesla in the S&P 500 index.

For $515 billion (based on fully diluted share count) you can buy Tesla with $25 billion of TTM revenue and basically $0 EBIT.

Or, you could buy: Toyota, VW, Daimler, BMW, Honda, GM, Ford, Fiat Chrysler, and Subaru. They have a combined $1.5 trillion of annual revenue. That's a P/S of one-third of revenue instead of 20x. Just a sixtyfold valuation difference.

Those nine also have $74 billion of TTM EBIT. So they only trade at 7x EBIT. And it would be impossible for Tesla to earn as much because their EBIT is triple Tesla's revenue.

1 comment:

whydibuy said...

I never thought we would ever see a repeat of the internet bubble. But not only are we seeing it, but its at trillion dollar levels while the 2000 bubble had companies with meager ( by today's standards) 100 billion market caps.
This is internet bubble on steriods.
And the bust of this bubble will be devastating to the real economy. Because the real economy is now dwarfed by the market where in 2000 we still had a vibrant economy . Not a moribund, zero money velocity economy.
The big question is how fast the down comes. Will it take 18 months or 18 days. In today's high speed trading, an event in days rather than months is a serious possibility.