In other words, they’d risen tenfold, driven up by speculation and excitement over Musk’s autonomous-driving and battery technologies and Tesla’s stronger-than-expected financial performance. Sixteen months later, Tesla shares-after a five-for-one August stock split-were trading at $400. That $1 trillion value Ark was placing on Tesla’s nonexistent robo-taxi fleet? “Strikes me as more fairy tale than valuation,’’ Damodaran opined. The model, he noted, didn’t include a discounted cash-flow analysis and carried incomplete forecasts on the costs Tesla would incur to scale its vehicle production. “hat Ark has produced is a forward pricing for Tesla, not a valuation,’’ sniffed valuation expert Aswath Damodaran, a finance professor at New York University. Tesla short seller Jim Chanos, famed for uncovering Enron’s fraud, took Wood to task over Ark’s forecasts of Tesla’s gross margins. Now she stirred the pot again by publishing online Ark’s new bull’s-case valuation of $1.4 trillion, implying a share price above $6,000, complete with every Excel calculation and assumption behind those estimates.Ĭriticism came fast and furious. Cathie Wood and her Ark Investment Management were already well-known for their way-out-there predictions that Tesla would build a fleet of robo-taxis worth $1 trillion and that its shares would soar 20- or 30-fold by 2023. Tesla shares were limping along around $200 in May 2019, about where they had traded five years earlier, when Elon Musk’s biggest Wall Street booster tried a gutsy experiment. Among her predictions: Elon Musk’s car company is vastly undervalued. The newest superstar investor has leveraged a zealous belief in innovation into a $29 billion-in-assets firm and a $250 million net worth.
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