A love affair with Wall Street investors is always absolutely fantastic. Sometimes absurd. Very often, short lived.
The latest of these love affairs happened just a few days ago. General Motors, with almost 10 million cars sold every year, showed a smaller listing value than Tesla, with 76.000 vehicles in 2016. Tesla is valued at more than 50 billion dollars.
Investors believe that its quite extraordinary technology, which includes automatically driven cars, home batteries and other marvels of the same type, will be worth fortunes in the future.
It is certainly not the case now, but, nevertheless, happy speculators are putting money into it. Why? Because they believe that the battery business has a great future, more so than the car business. Well that may be the case, but Tesla today has a bigger valuation than GM, Ford Motors. And soon to come, Honda is in line to be overtaken.
I just want to remind you that General Motors is expected to make more than 9 billion this year, and Ford more than 6 billion. While Tesla shows less than 1 billion.
Happy those who believe!