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Tesla Robots

Tesla Robots working hard

It was just over a month ago that I posted about Tesla’s stock value after it rallied past Ford and GM in market cap. It was around that time that Elon Musk was tweeting about his own company’s share price.

Last week, Elon Musk expanded on his thoughts on the price of Tesla shares in an interview with The Guardian.

“I do believe this market cap is higher than we have any right to deserve,” – Elon Musk via The Guardian

Musk sounds like a rationale founder and CEO. I’m surprised he would even say this because the market should take it as a signal the shares are overvalued. If the CEO, the man who knows the most about the company, says the market has overvalued the stock then who is willing to buy?

At the same time, the CEO should also set proper expectations for the market.

And the stock has risen beyond a value that even Musk views is appropriate.

Tesla is up 43% YTD while the S&P 500 is only up 5.5%. This is despite losing $1.33 per share in Q1 against analysts’ forecast for a loss of 83 centers.

Short interest in the stock has fallen from 29% of float at the end of November to 26% at the end of April.

I would consider buying puts but the stock price at $310 makes for pricey options. Plus, my portfolio is really intended for small cap companies which Tesla is not at $51b market cap.

The Tesla story continues interest me simply because of Musk. Tesla, SpaceX, SolarCity – all interesting tech and science projects but not necessarily profitable investments. Musk is already rich.

“We’re doing this because we believe in a sustainable energy future, trying to accelerate the advent of clean transport and clean energy production, not because we think this is a way to get rich. – Elon Musk”