From electric cars to hyperloops, from rockets to satellites, from solar roofs to landing on Mars, from brain-computer interfaces to interstellar spacecraft, Elon Musk, known as the “Silicon Valley Iron Man”, has a new title today: The second richest person in the world.
Tesla and SpaceX founder and CEO Elon Musk’s worth has jumped to $136 billion, surpassing Bill Gates and second only to the world’s richest man, according to the latest data from Bloomberg’s Billionaires Index. Amazon founder and CEO Jeff Bezos.
This is due to the recent surge in Tesla’s stock price: the company’s stock price closed as high as $555 today after several consecutive days of rising, with a market value of $526.4 billion, breaking the $500 billion mark for the first time. Three-quarters of Musk’s personal net worth is made up of Tesla shares.
However, the doubts surrounding Musk have never stopped. How big of a bubble is there in Tesla and the hot electric car field behind him? Is the status of hundreds of billionaires a solid boost from high technology, or is it a flash in the pan that is exaggerated by capital? And what kind of fate is there between Bezos and the new generation of rich people represented by Musk?
The back waves push the front waves, the space between adventurers and philanthropists
In fact, Gates was the world’s richest man for more than 20 years until he was surpassed by Bezos with a net worth of more than 100 billion US dollars in 2017. Now, Musk has taken his place.
But if it weren’t for his philanthropic focus in recent years, Gates would have a net worth of more than $129 billion: Since 2006, he has donated more than $27 billion to his charitable foundation.
The adventurer Musk and the philanthropist Bill Gates have a lot of friction in different fields.
Earlier this year, the two expressed different views on the new crown epidemic. Musk once said in an interview: “I will not vaccinate myself and my children, I will not get the new crown, and neither will my children.” But just a few days ago, Musk admitted that he is likely to “Moderately infected” of the new coronavirus.
But Gates called on the public to pay attention to the epidemic as early as the beginning of the epidemic, and invested huge amounts of money to develop vaccines. He thought Musk’s comments on the outbreak were “shocking” and “I hope he doesn’t mislead in areas where he doesn’t have much involvement.”
The two have been fighting each other for a long time in other fields: Gates feels that Tesla’s electric truck has no future, Musk feels that Microsoft’s investment in artificial intelligence platform OpenAI is for profit, and he directly commented on Bill Gates as “boring.”
Since the outbreak of the new crown epidemic at the beginning of this year, although many ordinary people around the world are facing the plight of income reduction and layoffs, the net worth of the world’s 500 richest people according to the Bloomberg Rich Index has still increased by 23%, reaching as high as 13%. trillions of dollars.
The top ten richest people in the world on the Bloomberg Rich List, with net worth as of the evening of November 25th, Eastern Time.Source: Bloomberg
How much is the bubble under Tesla’s 500 billion market value?
Tesla shares have risen nearly 28% since last Monday, when it was announced that it would be added to the S&P 500 after Dec. 21. Goldman Sachs pointed out that if they hold Tesla with a benchmark weight in the future, considering that many large-cap funds do not already own its shares, they will need to buy $8 billion in shares.
This round of Tesla’s surge is also related to the market’s expectation that the Biden administration will benefit the new energy vehicle sector, including NIO, Workhorse, Nikola, Lordstown Motors, Xiaopeng, Li Auto, Ayro and other new energy vehicle companies. The stock price has also risen to varying degrees recently.
The stock price has soared 500% since this year, and the market value has exceeded 500 billion US dollars-how many bubbles and hidden worries exist behind investors’ extremely high expectations for Tesla?
Valuation is always an inescapable topic. Let’s look at a few data: The median price-earnings ratio of the S&P 500 is 20.89, and Tesla is 113; in terms of enterprise value multiples, only six companies in the S&P 500 are higher than Tesla’s 49.51 times. This metric is a widely used company valuation metric that divides enterprise value (EV) by earnings before interest, tax, depreciation and amortization (EBITDA), and a high multiple relative to the industry average or historical level usually indicates overvaluation , a lower value indicates undervaluation, and different industries or sectors have different valuation levels.
Photo by Bram Van Oost on Unsplash
How Tesla will justify these price multiples will be a difficult question. Even citing the earnings figures given by the most bullish analysts on Tesla – assuming that Tesla will earn $10 billion in 2022 or 2023 ($556 million in the past 12 months), 20 times The valuation corresponding to the price-earnings ratio is only $200 billion, which is less than half of the current Tesla.
A model published last year by Harvard Business School professor Robin Greenwood showed that if a stock has risen more than 150% in the past two years, there is a greater than 80% chance that it will fall 40% in the next two years. %. If the rise is more short-term, or the price-earnings ratio inflates, a “bubble” is all but certain.
The market’s extremely high expectations for Tesla are based on its series of target lists, which include inclusion in the S&P 500, continued profitability and high production capacity, battery technology innovation and the launch of new electric vehicles. If the performance of a link is not perfect, the emotional market will give very timely feedback.
On September 23 this year, the day Tesla’s battery day was postponed for nearly half a year, the company’s stock price plummeted by more than 10%, because many of the battery technologies it had hinted had not progressed, including the service life of up to one million miles. battery, dry electrode technology that can greatly increase the energy density of the cell, etc.
While Tesla’s long-term value and potential cannot be denied, in the short-term, Tesla must face the throes of a bubble burst. Goldman Sachs pointed out that startups in the electric vehicle field often have a gratifying rise on the first day of listing, but then underperform the broader market, because the transactions are only based on the company’s conceptual enthusiasm. Once it retreats, investors start to leave.
Nikola, once seen as a challenger to Tesla, has tumbled a few months after going public, as its main electric truck has been slow to hit the market.
But Morgan Stanley, which gave an “overweight” rating for the first time in three years, raised its price target on Tesla to $540 from $360, and its analyst Adam Jonas said in a recent report that Tesla What is to be done is a far-reaching and radical paradigm shift – from selling cars to a high-margin software and services business, Tesla’s future network services, energy storage, insurance, mobility sharing, third-party providers, etc. Full of imagination.
In Musk’s view, Tesla has never been a traditional automaker, but a combination of “several tech startups.” “For example, we built a chip design team from scratch for Tesla’s Autopilot console, which car companies don’t do,” he tweeted.
Two rich people are fighting openly and secretly to play a “space race”
Musk, who is among the “hundred-billionaires” club, is now $47 billion away from the world’s richest man, Jeff Bezos ($183 billion).
Different from the long-term friendship between Gates and Buffett, the richest man of the old generation, the two new rich people staged a story of “love and kill”: they each achieved great success in unrelated fields, but “meeted” in space and competed for each other. Space Internet is a blue ocean market.
According to Business Insider, the argument between the two dates back to 2004, when the two had dinner to discuss their respective plans for a recoverable rocket, but that conversation didn’t go well. After that, the two had their own busy schedules. Until 2013, the two had another dispute over the lease of NASA’s rocket launch pad.
Photo by SpaceX on Unsplash
At the time, SpaceX was trying to gain exclusive use of NASA’s rocket launch pad, but Bezos proposed transforming it into a “commercial spaceport that all launch companies can use.” Ultimately, the matter ended with SpaceX taking over the launch pad.
In recent years, the conflict between the two has gradually become public, and even developed into an open and secret fight on Twitter. Musk has repeatedly publicly called Bezos a “plagiarist”, and also said that Blue Origin, the space company he founded, poached high-paying people from SpaceX. Bezos did not directly name the criticism, but suggested that Musk’s goal of “landing on Mars” was “unmotivated” relative to his own plans to land on the moon.
However, the bickering returned to the bickering, and the two never stopped in the cause of space exploration. Both companies have recently submitted designs to the space agency for lunar landers to return humans to the moon by 2024.