On Monday, J.P. Morgan analyst Ryan Brinkman issued a report on Tesla the likes of which Wall Street has seldom if ever seen. Brinkman asserted that at its current price of $361, the EV maker is hugely overvalued. Based on where its fading financials will land by the end of this year, he says it’s worth just $145, and hence eventually headed for a drop of 60%.
For years, this writer has been arguing that Tesla owes its gigantic valuation—today standing at $1.3 trillion—almost entirely from the “Elon Musk magic premium,” created when his long-term fans buy into promises of fabulously profitable futuristic products that Musk and Tesla so far have failed to commercialize. Put simply, it looks impossible for Tesla to grow its current, minuscule profits nearly fast enough to justify a market cap starting at $1.3 trillion, since that number would need to grow rapidly from there to hand investors a decent return.
