Tesla Valuation Is Temporarily Out of Step: Wallace

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Nov. 6 (Bloomberg) -- Rett Wallace, founder & CEO at Triton Research discusses market reaction to Tesla’s fourth-quarter results and the company’s sales prospects. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

As a tech stock.

It is an auto manufacturer.

They got a three percent -- 3% negative operating income.

How long can they sustain that?

Why does it trade like a tech stock?

Gm sold 250 million -- 250,000 cars in the last quarter.

Tesla trades like it will inherit a large piece of the automotive industry.

Is it like elon musk going press conference to press conference?

Or do you value it compare to auto companies?

Have you driven the car?

Too small.

They sell $80,000 cars.

They are not marketing the car because they have sold all they can make.

The market thinks this company will go.

-- grow.

There is something of the disruption affect and that is potentially what is making the stock a big momentum play.

This is also their first production car out of the gate.

It is the safest car in the world.

It broke the testing machine.

It literally went off the charts for safety.

The videos of the fires did not help.

Not for marketing purposes.

But in substance, they made a very, very safe car on their first try.

If you drove it, it is terrific.

They control their own distribution.

It is a good outing to go to the chelsea art gallery where they sell them here and take a first been.

-- spin.

Can never become anything more than a niche luxury carmaker?

Is there demand for a cheaper vehicle beyond the los altos hills crowd?

We will have to see.

It is a very nichey place.

Competition is looming.

The development time will come under pressure for tesla and that could lead to operational missteps here it skeptical that tesla can become the mass player?

They have an suv that is on the way.

The x looks beautiful.

They have a partnership with dime are -- daimiler.

It is being valued very far forward.

Apple are taking an option on long data.

This brings it right back to twitter.

Nobody knows what is going to happen in 2014, much less 2018. what they have in common is that markets are pricing in the certainty on one of many possibilities.

You have chrysler and you have the other two.

Elon musk owns the quarter of the company himself.

He is a credible engineer and

This text has been automatically generated. It may not be 100% accurate.

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