Part 2/11:
Musk openly questions Tesla’s current valuation, noting that it trades at around 70 times earnings. By comparison, traditional luxury car manufacturer Mercedes-Benz, now producing electric vehicles, trades at a modest six times earnings with a five-percent dividend yield. Musk’s skepticism centers on whether Tesla’s lofty valuation justifies its actual earnings and growth prospects, especially relative to established automakers like Mercedes.
Despite this, Musk admits that he doesn’t usually persuade others to buy Tesla stock. He admits to occasionally advising against it, especially when he perceives the stock to be overvalued. Yet, he notes a paradox: many investors ignore his cautions, continuing to buy Tesla shares regardless of his advice.