Wednesday, a NYU professor put out a post on his personal blog talking about everyone’s favorite, Tesla (TSLA).
My readers know my own frustrations with the stock and personal contempt for its valuation (which is not to be confused with contempt for its product) – even if they don’t understand it.
The professor created a model you can download and play with, putting in various assumptions to spit out different ends. The verdict?
He has no idea why Tesla is going for this much either.
While he did say there were a few outcomes which were as profitable for current buyers as they were farfetched, the probability of realizing those outcomes is dismissible.
This guys seems to have done more in depth work than I did. I just grabbed the growth estimates and studied the exponential curve generated from those assumptions…then recognized any variance is no friend of TSLA shareholders.
It’s worth pointing out that all of the assumptions this professor used to reach his conclusions are actually very optimistic, in the favor of Tesla. Even after that, he still can’t reach the current valuation. If you use my colder, less favorable assumptions, you get to my numbers…
At this time, I still hold my TSLA puts, with targets in the $30’s and $40’s. They have basically been cut in half (spaced out 6-18 months out from purchase), but constituted an investment of about 2-3% of my account at the time of purchase.If you enjoy the content at iBankCoin, please follow us on Twitter