So, I understand that Tesla is a company that has a possibility of shaping personal transportation in the future, but how can people think it is worth the insane amount it is currently valued at? They do not have much in the way of production facilities compared to established automakers, their competition is advancing rapidly and their market share is decreasing. I’m just baffled by their valuation as a company.
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Stock prices are a lot like collectible toys. If people will pay a lot for them, then they are worth a lot. But it’s not necessarily because they have some kind of real inherent value, in and of themselves.
People buy Tesla stock because they feel that the stock value will go up, and they will be able to sell the stock at a profit. And that raises the demand for Tesla stock, which raises the value of it. But that doesn’t mean that all of the actual assets and holdings of Tesla are actually worth that much money or that Tesla is going to just become more and more valuable. After all, GM stock used to be very valuable and desirable, and then GM ended up going bankrupt.
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