As David Welch pointed out in his excellent piece for Bloomberg, “GM expects to earn more than $9 billion this year and analysts predict Ford will generate adjusted profit of about $6.3 billion. On that basis, Tesla is expected to lose more than $950 million.”
Read that back again slowly. And no, that’s not all, it gets even worse than that. Welch goes on to quote Alexander Potter, an analyst at Piper Jaffray Cos., who said the following: “Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies can’t replicate.”
Wait a minute, is this is a financial analyst talking, or one of Elon Musk’s unpaid shills who dot the landscape and crawl out of the woodwork wielding pitchforks the moment someone has the temerity to slam their esteemed leader for his smoke-and-mirrors act? Well, both actually. Yes, Potter is not only an analyst who upgraded the stock on Monday, but also an analyst who has owned a Tesla for seven months and who added, “As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate.”
Catch up to what, exactly? Remember, folks, we’re talking about a car company that sold around 80,000 vehicles last year. For the record, GM sold more than 10 million. In the immortal words of Vince Lombardi, “What the hell’s going on out here?!?!”
If you’ve wondered why Tesla continues to be the darling of certain factions on Wall Street, against all rational measures of evaluation, I might add, you only have to re-read Potter’s telling quote to understand the madness. The valuation has nothing to do with any rational measure or reasoned perspective, it’s the Silicon Valley True Believers populating Wall Street who are completely intoxicated by the vapor trail left by the Muskian Vision of bunny rabbits and rainbows being propelled across the sky.
In other words, the Wall Street analysts buying into Tesla have veered off into the land of Cray-Cray, where the sky is bluer and the grass is greener, and The Future will be forged by the visionary brilliance of Elon Musk, and all of those dirty, nasty – and old – smokestack car companies that form the industrial fabric of this nation will be relegated to the scrap heap once and for all, replaced by clean, incandescent factories made up of equal parts magic and group hugs.