Quote:
Originally Posted by Enoch Root
Daimler Benz revenues: $173B Euros ($200B US), market cap $48B Euros
Tesla revenues $24.6B, market cap $360B
The stock price suggests that Tesla will sell 7x as many vehicles as Mercedes (simplistic valuation, I know), good luck with that.
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Again, you simply can't value a startup like Tesla based on profitability and revenues.
The Diamler Benz stock has been basically dead for 5 years, with little to no real growth. They have $30B in cash on hand, but over $100B in long-term debt and over $250B in liabilities, a number that has actually gone up quite a bit the last few years.
Tesla on the other hand has $8.5B in cash on hand, $10B in long-term debt, and $27B in long-term liabilities.
Why is all that important? Because if Diamler Benz wants to raise capital, they will need to tap into the debt markets. With their stock price already flat for basically 5 years, albeit with slight growth the last year, how much spending with their shareholders tolerate?
Tesla on the other hand just raised $5B in cash from a stock sale, and their stock price barely moved. There are a LOT of analysts that have targets on their stock from $500 to $1200.
Why is that important? Because it means over the long-term that Tesla will be able to raise capital WITHOUT having to tap into the debt market, which will keep their share holders happy, and will also be a neat trick to keep their stock price elevated from the perspective of the analysts that actually check the quarterly results.
If you compare stock prices and use it as a method to explain how many vehicles Tesla should sell, go over there and stand with the short-sellers that have been doing the same thing for years and have lost billions.
It doesn't matter what we think, the market clearly looks at Tesla otherwise, and I see that as a good thing.