Count former GM, Ford and Chrysler exec Bob Lutz among those who just can’t figure out why Tesla stock skyrocketed more than 250% over the past six months.
During a recent appearance on the BBC Business Daily podcast, Lutz argued that Wall Street’s brightest minds can’t figure this out either, saying that this is a psychology-driven phenomenon.
“I talked to people at Goldman Sachs, who are usually the world’s greatest experts on explaining stock prices, and they’re now asking me whether I have any idea what the heck is going on with Tesla stock,” said Lutz
“Nobody can explain it, it’s so far beyond any fundamental return that any shareholder could ever expect.”
With a market cap of $145 billion, Tesla is now worth more than Ford, Chrysler and GM combined, reports BI.
“It’s driven purely by psychology or almost a mass psychosis,” added Lutz, who also thinks that this bull run won’t last. “Ultimately, the share price responds to financial fundamental reality, and that day will come.”
During the podcast, Lutz couldn’t pass up another chance to take a swing at electric vehicles, saying that the shift from conventional cars to EVs is “somewhat of a fiction,” and that global demand for electric power is largely fueled by government subsidies.
While Lutz is clearly not a big fan of the electric car industry, he did throw some praise at Tesla’s actual products, saying: “There’s nothing wrong with the car. It is one of the best-driving, best-performing, best-looking premium sedans in the world.”