Pretty much every company boss believes that the company’s share price is too low. He or she then talks about the huge possibilities that are already on the horizon. The market is going to do this and that – but it will soon be going on.
Tesla’s chief Elon Musk is a clear exception to this rule. The 45-year-old is even of the opinion that the Tesla share is overvalued. For the first time, Musk made a corresponding statement in August 2013. At that time, the share of the electric car manufacturer had gained enormously in four months. The stock rose from $40 to $140 per share.
In September 2014, the Tesla CEO reiterated his assessment. At that time, the stock stood at $250. Now the company boss has again warned of the overvaluation of his company.
One day as precious as Apple
“I believe the market valuation is higher than we actually deserve,” Musk told the Guardian. At this time, the stock stood at 310 dollars. That was mid-May 2017. Since then, a good two weeks have passed – while the shares have climbed to a new high.
341 dollars is currently worth a Tesla share. This represents an increase of around 60 percent since the beginning of the year. One can also say: The shareholders whistle on Musks warnings. “Tesla’s current market value of $55 billion is comfortably ahead of its competitor, Ford, at $43 billion,” writes Forbes magazine in a recent analysis.
General Motors – until some years ago the largest car maker in the world – is valued at 50 billion dollars. A surprising, if not strange ranking, as Elon Musk emphasizes.
How will shareholders react?
The company’s CEO emphasized several times that Telsa produces only 1 per cent of the vehicle volume, which leaves one of the many General Motors factories annually. Musk does not believe it is unlikely that his company will ever be as valuable as the electronics giant Apple.
Now one can wonder why Elon Musk holds back with the assessment of the company shares. The studied physicist and economist is neither considered particularly shy nor too modest. The answer lies in the expectation of the shareholders.
According to Forbes, Musk wants the shareholders to agree on more difficult times. The growth curve cannot always be so steep upwards. Perhaps one day even the deep fall threatens. Just this year, Tesla has many risks with the introduction of Model 3.