Tesla’s market value of $555.24 is equivalent to 250 times its expected profit this year. Bitcoin is called bubble since 2010.
Michael Burry – the famous investor played by Christian Bale in the movie „The Big Bet“ – compared Tesla to Bitcoin Billionaire calling them both bubbles. Asked his more than 130,000 followers what Tesla investors had in common with bitcoin investors, he suggested that the answer is a bubble.
Michael is one of the investors who predicted the 2008 real estate collapse, since then his comments have been closely followed.
The investor manages about $340 million in Scion Asset Management. He achieved fame after betting against mortgage bonds before the 2008 crisis. Burry was featured in Michael Lewis‘ book „The Big Short“ and the Oscar-winning film of the same name.
„Tesla at ~65% of the value of all other automotive companies in the world combined, and the addition to the S&P500 on December 21 puts the top in motion.
What do Tesla and Bitcoin game-option dealers have in common? „Bubble“.
Tesla is Bubble?
Tesla has become the 6th most valuable American company in the US stock market. It has surpassed the market capitalization of Warren Buffet’s Berkshire Hathaway, Inc. Tesla’s market capitalization reached $55.24 billion and lags behind Apple, Microsoft, Amazon, Alphabet and Facebook alone.
Tesla’s value alone is greater than all the other automakers put together, and the company’s continued appreciation is a cause of concern for the famous investor.
Since it was announced that Tesla would be added to the S&P 500 index, the company’s market capitalization has valued $168 billion. Tesla has not only survived the pandemic but has also prospered during it. Its market capitalization is greater than that of Toyota, Ford, VW, BMW, Fiat and GM combined.
Tesla’s market value of $555.24 is equivalent to 250 times its expected profit this year. The revolution that Tesla brings is the end of combustion engines. From a climate point of view, investors are allocating capital to this idea. Still, the forecasts seem bubbling.
Tesla’s potential for disappointment is enormous, especially since many automakers have not yet started producing electric cars.
Like all financial bubbles, this one is driven by dreams of enormous wealth. Elon Musk has surpassed Bill Gates as the second richest person in the world this week. A big Tesla test will come when they burn all the money and need to ask investors for more.
In a way, the supposed Tesla bubble has more to do with investors and our economic environment than with the company. Faith in market efficiency, a focus on being „green,“ fear of losing, and the growing power of storytelling by famous leaders have created a fertile ground on which the Tesla bubble has taken root and grown.
And according to some investors it is about to explode.
As for bitcoin, for over 11 years it has been called the bubble, not the first time that digital currency has been criticized. Before, all the critics compared bitcoin with the tulip bubble, but it doesn’t seem to have glued much.