We may need to start thinking about Tesla at $3 trillion

·Editor focused on markets and the economy
Thu, October 28, 2021, 12:11 PM
In this article:
  • +1.18%

This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Thursday, October 28, 2021

With short-sellers cowed, Tesla $3T could be closer than we think

Remember that time Elon Musk briefly flirted with the idea of taking Tesla (TSLA) private, partly financed with money from Saudi Arabia’s sovereign wealth war chest, and promptly landed in hot water with regulators?

Now that the carmaker has definitively joined the $1 trillion market capitalization club — only the fifth company to do so — the $420, “funding secured” episode may seem like ancient history (it was 2018, for those keeping track at home).

But it’s worth the stroll down memory lane now that Tesla is firing on all cylinders, striking huge deals and cowing the short-sellers into submission (Speaking of, what are Jim Chanos and David Einhorn doing with themselves these days?)

With all the momentum behind it, could Tesla grow even bigger, to say, $3 trillion?

In a recent Substack post, economics commentator James Pethokoukis mused about the idea of Tesla becoming the first company to outflank tech giants. Pethokoukis wrote:

  • Everyone knows America doesn’t make anything anymore. But, you know, Tesla does. And what it makes investors apparently think is pretty valuable, both now and in the future. Indeed, they think the potential of what Tesla makes is so valuable that no company has itself become so valuable despite selling so little.
  • It makes sense that the Information Technology Revolution would make lots of fortunes through the manipulation of bits. But maybe now we are shifting back to wealth creations via the manipulation of atoms — enabled, of course, by IT advances, including forms of AI — rather than our attention spans via social media. Tesla is one example, and more might be on the way. For example: Moderna is a $140 billion company thanks to its success developing mRNA vaccines to counter the coronavirus. One wonders about the economic potential of new genetic editing techniques…