Tesla continues to bewitch investors but will it go on to dominate the industry?
The company has become a "story stock" - a firm whose stock price is impervious to any traditional valuation measures because its story is simply too good not to be true.
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AS Tesla shares surged past US$300 this week and the company's market value surpassed Ford's, even its founder, Elon Musk, acknowledged on Twitter that the company was "absurdly overvalued if based on the past".
By "the past", he presumably means old-fashioned valuation measures like price-to-earnings or price-to-sales ratios, the traditional benchmarks for evaluating stock prices. By those measures, Tesla - a company that lost US$773 million last year - is indeed off the charts.
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