Tesla’s layoffs and executive departures took a bite out of its share price this week. The well-known electric vehicle company shed around 10% of its staff, impacting an estimated 14,000 staff or more. Two well-known executives also decided it was time to move on.

In response to the news, shares of Tesla lost ground. The company’s value has eroded this year, falling 35% through the end of trading yesterday.

The year has not been kind to Tesla. It missed delivery estimates for the first quarter, has reportedly reduced hours for the production-line of its Cybertruck and is seeing rivals in China stack market share with low-priced EVs. Tesla, in other words, helped foster the global electric vehicle market, but is losing some of its primacy in that same market.

Which may be a bigger risk than it seems. The global auto market is large, complicated and replete with different manufacturers and badges competing for share. What’s the risk of being a bit smaller than expected? For Tesla, a lot. The company is currently valued at a price/sales multiple of 6.2x, per Yahoo Finance. GM? It’s worth 0.34x. Ford? An even more modest 0.29x.

In human terms, for every dollar of car that Tesla sells, it generates far more company worth than its rivals. Why? Because many investors are betting that Tesla is not only going to keep growing its EV business that became a profit center in recent years, but that its work in energy, energy storage and related industries will generate a company that is far larger, and more valuable in time. If Tesla was to trade at a GM or Ford-style revenue multiple, it would erase most of its worth.

And with price cuts, falling deliveries, increasingly sophisticated competition and now mass layoffs, Tesla is starting to look more like a traditional company than a concern that can avoid traditional business rules and trade like its peers. Hit play, let’s chat!

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