10. March (Reuters) In just three months, Tesla's stock has fallen by almost half. Investors continue to debate whether Elon Musk's electric vehicle manufacturer is still overvalued.
Since reaching an all-time high of $1.5 trillion on December 17, the company's market value has fallen 45%, wiping out the majority of the gains gained by the stock following CEO Musk's role in helping fund U.S. President Donald Trump's election triumph.
However, according to conventional financial measures, Tesla (TSLA.O) continues to command a valuation that is significantly higher than that of the largest technological and automotive companies in the world. This is because Musk's argument that the most valuable automotive firm in the world is actually an artificial intelligence pioneer that would soon unleash a revolution in robotaxis and humanoid robots has been accepted by the majority of experts and investors.
According to a Reuters analysis of over a dozen evaluations by banks and investment firms, Tesla's electric vehicle industry generates nearly all of its income but less than a quarter of its stock market value. Despite Musk's assurances in each of the years since 2016 that driverless Teslas would be available by the next year, the majority of its value is based on expectations for autonomous vehicles that Tesla has not yet produced.
Falling car sales and profits, protests against Musk's political activities, including his mass firings of US government employees while serving as a top Trump advisor, and investor concerns that politics are taking the world's richest man's attention away from his cash cow are the main causes of the stock's decline since December. However, since the election, Tesla's market capitalization has increased by almost $65 billion, surpassing the whole value of General Motors (GM.N). Read more...
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