Poster child for the renewable energy revolution, Tesla, has dived below Standard Oil spinoff and former market cap champ Exxon.
In a harsh December for Tesla, Tesla is down to $125 in price and $396 billion in market cap on 12/22. Exxon is at $433 billion. If Tesla strongly violated the 89 month moving average and stays below, the target is $67. That’s not a typo.
Tesla faces multiple risks. Elon Musk may have to sell more shares to bailout Twitter. There may be conflicts of interest between Twitter and Tesla. The board of directors at Tesla is under fire to uphold their fiduciary duty and make sure Elon focuses on Tesla. And Elon’s association with Twitter and politics may drag down Tesla’s reputation, hurting future growth.
Senator Elizabeth Warren had a great letter to the Tesla board asking the same.
Tesla’s 12 month prior levered free cash flow: 6.55B
Exxon’s 12 month prior levered free cash flow: 43.15B
If two stocks are similarly valued, but one makes a lot less money, logic says that company should be worth a lot less, even with tremendous growth prospects. My feeling is Tesla is overvalued in the face of high interest rates and inflation.
Renewable energy will grow share and options. That doesn’t mean Tesla’s market cap will grow too. That bubble is deflating. We all know how hard it is to reinflate a popped bubble.
Our word of advice: be wary of free advice from anonymous posters on the internet, including our own. Do your own research. Is Tesla at a bottom or further to fall? Let us know.
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