Paul Krugman.BI
Paul Krugman said Tesla was like bitcoin and that hype and faith underpin both asset’s prices. Krugman joked about Elon Musk and how he would not trust him to feed his cat.
Paul Krugman compared Tesla stock with bitcoin. He said hype and faith underpin both assets’ valuations. Krugman also joked that he would not trust Elon Musk to care for his cat.
Between the November 2021 peak and the beginning of 2020, Tesla stock soared more than 13 times. It plunged 73% between then and its November 2021 peak, reducing the market capitalization of electric-vehicle company (EV) from more than $1.2 trillion to below $350 billion by Tuesday’s close.
Krugman asked in a column published by the New York Times on Tuesday: “Did Tesla’s story ever make sense?”
Nobel Prize-winning economist, Michael Moore, argued that Tesla is not worth as much as Microsoft and Apple because it doesn’t have significant network effects. Apple’s ecosystem of apps, devices, and services is difficult for users to leave. However, Microsoft Word and Excel are the preferred choice for businesses because they are the most well-known and industry standard.
Krugman stated that Tesla is facing increasing competition from legacy automakers like GM and Ford in the EV market. There are also no obvious network effects to owning a Tesla versus a competitor car. Krugman wondered how Tesla would dominate its market and make large profits after the hype surrounding its products fades.
He stated that it was difficult to imagine what would make Tesla long-term secure in the electric vehicle business.
According to the economist, a large part of Tesla’s popularity was due to Musk being perceived as a “cool guy”, but this image has declined in recent weeks.
He made a comparison between the excitement and faith that fuelled Tesla stock during the pandemic, and bitcoin’s rapid rise over the same time. He noted that the most popular cryptocurrency does not have any clear use other than money laundering and its price is being supported by a “hardcore team of true believers.”
Krugman also mocked Musk’s chaotic start to Twitter. Twitter’s CEO, Krugman, has been firing then rehiring workers since October when he purchased the social media company. He then launched features that were quickly scrapped and suspended users, only to have them reinstated hours later.
Krugman remarked, “Given the behavior of Musk, I wouldn’t trust him to care for my cat, let along run a major corporation.”
Continue reading: “2023 is going be one of the best years to invest”: A millennial who has achieved financial independence at the age of 30 shares his top investment advice as we enter the new year
Business Insider has the original article.
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By: tmohamed@businessinsider.com (Theron Mohamed)
Title: Nobel laureate Paul Krugman compares Tesla to bitcoin — and says he wouldn’t trust Elon Musk to feed his cat
Sourced From: markets.businessinsider.com/news/stocks/paul-krugman-tesla-stock-price-bitcoin-elon-musk-twitter-network-2022-12
Published Date: Wed, 28 Dec 2022 13:40:03 +0000
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