Tesla, a company that makes electric cars but not an electric truck or electric semi, hit a market capitalization of over $1 trillion earlier today as its stock soared on a spate of good and bad news for the company. One trillion dollars! That is almost in the same league as some other companies you may have heard of, like Google.
Well, not quite yet, as, as of this writing, Alphabet, Google’s parent company, has a market cap of a little over $1.8 trillion, while Tesla’s is just over $1 trillion. Tesla, in any case, is in the trillionaire’s club.
That is around $1.6 million for every car Tesla has made this year, a figure that market traditionalists will describe with words like “completely unhinged.” They say that because in the old, pre-meme days, when you were considering buying stock in a company, you might look at their revenue relative to the company’s market capitalization, or more you might look at a ratio comparing their stock price to earnings. By those metrics, Tesla looks like one of the most overvalued companies in the history of the world.
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Except we are not in that world anymore, we are in a world where stock valuations have to do with less understood things, like whether or not Elon Musk has tweeted today. The point is that Tesla’s stock has long taken on a life of its own, because if you’re asking yourself whether Tesla is worth $1 trillion, I fear that is the wrong question. Future Tesla might be, if Tesla can become what it aspires to be, which is basically the only car company in the world. That future version of the company is worth much more than $1 trillion. Anyway, when I gamble I prefer to do it at a casino.