Things could get 'ugly' for Tesla as 'absurd' valuation contracts - GLJ Research CEO

seekingalpha2021-12-30

GLJ Research CEO Gordon Johnson argued Wednesday that Tesla(NASDAQ:TSLA)was "grossly overvalued" at its current share price, contending that hyper-stimulus provided by the Federal Reserve fueled the stock's massive advance over the past two years.

In an interview with CNBC, Johnson called TSLA's valuation "absurd," contending that once it faces competition for electric vehicles in the U.S., its market share would drop dramatically.

As evidence, the GLJ Research CEO pointed to China, where he says TSLA has seen its share drop from 23% to 11%, and the EU, where Johnson says the company has experienced a deterioration from 33% of the market to 15%.

"When you see competition, Tesla significantly loses," he asserted.

Asked how the stock could reach its current levels given Johnson's view of the fundamental situation, the GLJ Research CEO pointed to the Fed for an explanation. He contended that the high levels of liquidity pumped into the system since the start of the pandemic created a situation where "every single asset blew up," including TSLA stock.

"Reality is going to set in when all this free money exits the market and I think that reality is going to be ugly for Tesla," he said.

Since the start of 2020, shares of TSLA have soared more than 1,160%, compared to a gain of 53% for the S&P 500 as a whole.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Frosty4ever
    2022-01-01
    Frosty4ever
    Gj talking about market share again?  Distracts from phenomenal production growth with 2 gigafactories coming online and expansion of Fremont and Shanghai.  Margins are growing with ramping of model y and x, 4680 batteries.  Declining market share doesn't mean decline in profitability. Both can happen with growing total addressable market.. 
  • fafe
    2021-12-30
    fafe
    Hm
  • CIG
    2021-12-30
    CIG
    醜媳婦總得見公婆
  • Chris_CHRIS
    2021-12-30
    Chris_CHRIS
    Who is the absurb one
  • RobinChanKH
    2021-12-30
    RobinChanKH
    Wow
  • Abc123
    2021-12-30
    Abc123
    Wow
Leave a comment
7