Consider "valuation" to be a bastardized version of "net worth" and "credit rating" and "street cred." If you live in a million dollar house and drive a BMW 7-class you're going to pay less for car insurance, life insurance, loans etc than someone in a hundred thousand dollar house driving a late-model Ford. Note that this doesn't say anything about the moral fiber of the guy in the ford, nor does it say anything about his ability to pay it back. Some people look at the million dollar house and assume that the dude inside earned it. And maybe he did. Maybe he will. But the impact, right here and now, is that he's impressing people and it's making it easier to keep impressing people.

Let's say I own 1% of Uber and you own 1% of Snapchat. From a "value" standpoint, I own 1% of a hole six times deeper than your hole - Snapchat has burned through $9b while Snapchat is only at $1.6b. From a "valuation" standpoint, though, you're a millionaire 160 times over but more than halfway to being a billionaire. And if you're Snapchat - or Tesla - you get to take that crazy valuation and use it as collateral - for operating expenses, for purchases, for lavish parties, for whatever you want to do. And hey - you and I can wheel and deal and trade our pieces-of-holes as if they were cash money.

So here's a company - GM - that's been in business for over a hundred years. They make something like 130,000 cars a month or some insane number like that. But from a "we need to borrow money" standpoint, they're worth about half as much as Tesla.

Which any number of people consider nuts, a lot of whom have money riding on it. Line up four Tesla shareholders. One of them is short. He's hoping that Tesla's earnings call tomorrow doesn't meet "the market's" expectations, whatever that may mean, and the stock goes down. He'll sell his shorts and make money. Which is the main reason for articles like this - they come out a couple days ahead of every Tesla earnings call - but it's still kinda crazy how much a company that doesn't, you know, make money.

coughcoughAMAZONcough

I don't, actually. I just view Tesla the cult differently from Tesla the car company.

Tesla the cult worries me because it's an overhyped, underperforming moneysuck that gets a bye from everyone without a fundamental understanding of automotive engineering. Tesla the cult undercuts the performance and value of Tesla the car company such that they aren't required to come down to earth anytime soon. And as "earth" is where I live, Tesla the cult has the potential to inhibit the long-term prospects of Tesla the car company.

At the same time, Tesla the car company likely wouldn't have made it far without Tesla the cult; the roadster wasn't a particularly novel vehicle, the Model S is basically a Taurus with delusions of grandeur and the X is a station wagon as designed by a rich kid with no imagination. That level of mundanity needs a pretty shiny halo to keep the product selling. Maybe the 3 is gonna be the shiznit. If so, it might drive the rest of the industry into making non-fuggly EVs.

But it's been pushin' 8 years now. Valuations for the S&P500 are the highest they've ever been, ever, but the cult stock batshittery surrounding Tesla beggars the imagination. And I'm left with the lingering feeling that if real car companies were held at the same gonzo valuations as Tesla, we'd actually see some cool shit. I mean, if Jaguar could lose money at the rate Tesla burns through it, not only would we have actually gotten a few CX-75s they'd have cost half as much.