Professor Elam

Monday Feb 16, 2015

At the conference last week I was asked about my presentation. Here was my elevator pitch.

Why does Tesla sell for $215 a share with no earnings, a future that depends on a  yet to be invented battery, and no dealer network

When Ford which sells millions of cars and trucks and makes money sells for one tenth that

This is contrary to what one  learns in finance class

This article from Bloomberg explains that it is in fact social mood gone insane. Read this passage, one is not buying for financial return but emotional return. 

For anyone who feels depressed about living in the post-space shuttle era, buying a Tesla or even just a share in Tesla can feel like claiming a small piece of the Space Age. Like space travel itself, buying a Tesla or a share of the company isn’t something you do because you expect it to return some specific return but because it appeals to some deep human need for adventure. Which is fine, for anyone with enough financial bandwidth to be able to enjoy an adventurous investment. Just be prepared for more rational investors to call you, well, crazy.