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2013's Top 10 Dumbest Things on Wall Street

8. Tesla's Pit Stop

Originally published July 12

Come on index-makers. Enough with the baby steps. Let's just stick Tesla (TSLA) in the Dow Jones Industrial Average.

Hey, we're not fooling! With a $14 billion market cap, 3,000 employees and public since July 2010, it undoubtedly belongs there. Don't you think?

Excuse our dripping sarcasm, but 1.) its blisteringly hot on Wall Street, and 2.) we still can't get over the inanities occurring in the all-important indices this week, most notably the electric car-maker zooming into the Nasdaq 100. Tesla was tapped to take Oracle's (ORCL) spot Monday as the software-maker -- $146 billion cap, 120,000 workers, IPO in 1986 -- heads over to the New York Stock Exchange (NYX).

Oracle, in case you were unaware, is not a member of the widely watched Dow Jones Index despite its size and influence. For that matter, tech-bellwether Apple (AAPL) -- $385 billion, 73,000, trading since 1980 -- is also excluded from the august 30-member group (although it would probably have to split a few times if it was accepted into the Dow since $420 a share would blow the lid off the price-weighted index.)

Of course, size and stature have little meaning when it comes to the Dow since Alcoa (AA) -- $8.4 billion, 61,000, 1978 -- remains on the team. The aluminum maker, which is far smaller than all three tech companies, "unofficially" kicked off earnings season Monday by beating Wall Street analyst estimates by a penny.

But back to Tesla, because the money-losing carmaker and its single product really should be everybody's focus now. Forget Bernanke, this is a Musk-see market.

That Musk, as the world knows by now, is Elon Musk, the billionaire entrepreneur who took Tesla public three years ago this month at $17 per share. The company's stock traded in line with the major equity indices -- the Dow 30, S&P 500 and Nasdaq -- until the start of this year when it pulled away from the rest of the pack.

Forgive us. Not just pulled, blasted off like one of Musk's SpaceX rockets. Tesla's stock is up 265% so far this year and trades at an all-time high of $123 (well, a three-year high).

Tesla bulls argue that the outperformance, the nose-bleed valuation and the spot in the index are warranted since the company's sales surged 1,760% in the past year to just under $1 billion. (Alcoa posted sales of $23.5 billion in the past year, but we're not talking about them.) The company's fans also say its SUV, which will arrive in the second half of 2014 (yes, 2014) will add on to the gains of its current offering (note the singular), the Model S sedan.

Our view, however, is that a third of Tesla's float has been sold short as of June 14th and this price is blatantly unnatural.

Not that Tesla's car is not fabulous. We keep hearing that it is an amazing roadster to own if you have the $70,000 to own it. Nevertheless, the company's stock price is not trading on fundamentals. It is trading on the backs of some very bloody bears and to talk about the company as a legitimate addition to any index is plain silly.

Almost as silly as Alcoa still being a Dow component while Google (GOOG) -- $300 billion, 54,000, 2004 -- remains on the outside looking in.

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