Elon Musk represents a reputational risk to Tesla and the company’s value could soon collapse to near zero, says John Caudwell

Tesla will need a lot more than a PR stunt on the White House driveway to reverse its current despairing fortunes as anti-Elon Musk and anti-American trade war sentiment reverberates around the globe.

While we have seen a share price rally after what can only be described as a catastrophic week for Tesla, you don’t need to dig too deeply to see that the numbers just don’t stack up. This is a dead cat bounce – a brief rise in a company’s share price during an otherwise downward trend.
Whichever way you cut it, Tesla looks like a lame duck stock and a company in more than free fall. By my reckoning, its value – once at the heady heights of $1 trillion-plus – could be zero.

Without some kind of silver-bullet, such as a much-anticipated driverless vehicle or ‘robotaxi’, the future earnings potential currently propping up the Tesla share price, and in turn the company’s value, may be headed unstoppably downward.

Look a little deeper and unpick Tesla’s Net Asset Value (NAV) – the total value of company assets minus the value of its liabilities to give a value for shareholder equity – and you see a grim picture: the NAV per share is substantially smaller than its price per share.

So where are Tesla’s future earnings going to come from as the world........

© City A.M.