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Wait for $100 Before Buying Tesla

It's preposterous to suggest that the company's true valuation, the offices, equipment, intellectual property and other assets declined over 20% in value from the day before, and within a few days soared 30% higher in value. The only logical explanation is companies and stocks are only loosely correlated.

Tesla's declining share price is a result of increased, not decreased correlation between the stock price and the company's performance.

Tesla reported a net loss of $49.8 million. Operationally, Tesla hasn't posted a profit yet. Revenue climbed 10% from the same period last year, albeit only 1% above last quarter.

TSLA Revenue (Quarterly) Chart

If you look real carefully, you can see a blue line in the above chart that represents Tesla's revenue. Toyota (TM), General Motors (GM) and Ford (F) are the others for relative reference.

GM's forward earnings multiple is 7.4, Toyota's 8.7, and Ford's at 8.1. What's Tesla's? A "soft" 53, meaning if you use accounting gymnastics and ignore GAAP and a bunch of real -- but we're going to pretend they don't exist -- expenses, a profit can be claimed.

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TSLA $240.76 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
YHOO $36.60 0.00%


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