, Columnist
The Tesla Hype Machine Is Looking Shaky
A carmaker sustained by speculative buying is vulnerable to a sell-off.
Blue steel.
Photographer: FREDERIC J. BROWN/AFPThis article is for subscribers only.
At last we have at least a partial explanation for why Tesla Inc.’s stock gained 500% this year: Massive bets on high-flying technology shares by SoftBank Group Corp. and others using equity derivatives. The extraordinary rise valued Elon Musk’s electric car business at $464 billion at the peak in late August, when only six U.S. companies were worth more.
Unfortunately for Tesla’s devoted followers and the retail investors who’ve been giddily tallying up their winnings, the surge in the market value has very little to do with it selling more vehicles.