Investor's Corner

Tesla (TSLA) not in ‘mortal danger,’ will be worth more in 5 years, Musk says

Source: Tesla

Tesla (NASDAQ: TSLA) CEO Elon Musk’s podcast with the New York Times’ Kara Swisher revealed more rumblings that the company’s frontman has regarding the stock. After admitting that Tesla was in “mortal danger” just three years ago, Musk states that Tesla is doing well now. However, the serial tech entrepreneur still believes Tesla isn’t appropriately valued, and also said that the company will grow over the next five years.

In May, Musk said something on Twitter that relayed his opinions about the stock price, and it dropped the price per share by 12%. “Tesla stock price is too high imo,” he said, indicating that perhaps the electric automaker’s valuation did not match where he thought the company should be at that time. But since then, TSLA stock has continued to soar in value. Despite having a few rough days here and there, it remains the most valuable automotive company in the world.

“I’ve gone on record already saying the stock prices have been high, and that was well before the current level,” Musk said on Sway, Swisher’s New York Times podcast.

Does Musk agree with what the current valuation is? It is tough to tell based on his quote, but Tesla stock has surged this year on the numerous tech developments and production achievements that the company has managed to obtain.

However, even though his thoughts on the current stock price are unclear, Musk is pretty sure that the valuation will continue to rise.

“But also if you ask me, do I think if Tesla will be worth more than this in five years? I think the answer is yes,” he continued.

How Musk sees Tesla’s valuation is based on several things. During the interview, he said, “Tesla should be measured by how many years we accelerate the advent of sustainable energy.” During the company’s Battery Day presentation, he said that Tesla should be valued by the number of cars it produces, multiplied the valuation of autonomy, once it is figured out.

But one thing is clear: Tesla is not struggling any longer. Three years ago, Tesla was still working to turn a profit regularly, and the Model 3 had just been released, the company’s first mass-market automobile.

Stuck in the realm of “production hell” in Fremont and working over one hundred hours a week, it wasn’t a sure thing that Tesla would make it. The company had come a long way, but it was still far from profitable.

In 2020, Tesla is making money, it is growing, and it is becoming a main part of the sustainable energy transition period. “The thing that Tesla has been able to achieve is get to volume manufacturing and have sustainable positive free cash flow. From a car company standpoint, that is the real achievement of Tesla,” Musk said.

At the time of writing, TSLA stock was trading at $417.20.

Disclaimer: Joey Klender is a TSLA Shareholder.

Tesla (TSLA) not in ‘mortal danger,’ will be worth more in 5 years, Musk says
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