Tesla market cap is US$ 1.3 Trillion in comparison to regular car manufacturer it’s ridiculously high

The world leader Toyota has like market cap of 45 billions and other big manufacturer reach similar value. The only exception being the other leading brand on electric car “BYD” with a market cap of 750 billions.

However, even assuming that Tesla stays the leader of electric car, how would it make it more valuable that let’s say Toyota. Especially now that “many of the person who can invest the price of an appartment in a fancy car” did switch to electric, and that the electric market needs to develop the cheap and compact urban car for middle-class person who can’t afford a car above 20 thousands euros (Because to be realistic the era of 10 000 EUR car is over)

I simply can’t understand how Tesla market valuation is so high

  • snooggumsEnglish
    2•7 hours ago

    They don’t buy out all the shares, just a controlling interest or whatever they call it.

    • slazer2auEnglish
      7•6 hours ago

      It depends but sometimes they do. Like if a vc takes a public company private it generally takes all shares or if another public company takes over they will exchange the shares for their own. A recent example Broadcom purchased VMware

      VMware shareholders will elect to receive either $142.50 in cash or 0.2520 shares of Broadcom common stock for each VMware share.

    • BombOmOmEnglish
      7•7 hours ago

      If they want to control the company, without outright buying it, yes. It’s the classic way to acomplish a hostile takeover. Thing is, buying half the shares on the market is often more expensive than the current market cap, as mass buying shares sends the price up quickly.

      When buying a company outright (ie, your company actually owns the purchased company and both sides agreed to the transfer), then it is common to buy out all the shares at (around) current market value.

        • bluGill
          3•4 hours ago

          That is one option that is sometimes used. More commonly if you want the company you just buy 10-20% which you can get fairly quickly without affecting the price too much, then you use your large stock holder privileges to go to the board and ask them to sell for current price + small margin. The board will almost always put this to a shareholder vote and is it likely enough will go for it (you already control 20% of those votes so you need just 31% to defect). Most large companies have rules around this so you might need more than 50% of the vote, but still odds are you can get enough votes.

          What Porsche did to VW is different. The German government owns 25% of VW and are not selling and have laws in place to ensure that VW cannot be bought. That forces Porsche to instead buy the remaining shares but they can never just buy the company. It is an interesting case, but it is an exception to the normal rules and so be careful not to apply it elsewhere.