By Fundamentals over hype — that’s the lesson for Tesla (TSLA) investors after the EV maker’s disappointing robotaxi event exposed a disconnect between the stock’s lofty valuation and reality.
A lack of details surrounding the rollout plan and regulatory approval, plus no mention of a more affordable regular EV left Wall Street wanting more.
CFRA’s Garrett Nelson likened the event to “watching a movie with a lot of plot twists and special effects, and at the end, you’re walking out scratching your head.”
Safe to say analysts “scratching their heads” was probably not the reaction Musk was hoping for when showing off the Cybercab and Robovan concepts. Now, the big issue for investors is reevaluating Tesla’s stock price.
On Friday, more than $60 billion was wiped off of Tesla’s valuation in a selloff, a sharp reversal from the stock’s recent momentum. Shares had soared over 70% since Musk started touting AI in April. The rally brought Tesla’s market value to over $760 billion ahead of the robotaxi announcement— more than 14 times GM’s (GM) market cap and nearly 18 times Ford’s (F).
Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
