Cathie Wood from Ark Investment Management was the number 80 spot on Forbes’ 2019 list of America’s Richest Self-Made Women. And she recently made an astounding prediction: Elon Musk's electric vehicle manufacturing company is vastly undervalued!
She published Ark’s new bull’s-case valuation online stating Tesla has a value of $1.4 trillion, and predicts the share price will go over $6,000. However, criticism came fast and furious claiming it is a “forward pricing for Tesla, not a valuation.’’
Valuation experts say the model published by Cathie didn’t include a discounted cash-flow analysis and carried incomplete forecasts on the costs Tesla would incur to scale its vehicle production. She was also criticized for assuming the $1 trillion value on Tesla’s nonexistent robo-taxi fleet.
However, Ms Wood believes the skeptics have missed the big picture. Her take on it is that as electric cars go increasingly mainstream, production efficiencies and advances in batteries and other technologies will cut down the manufacturing costs will which increase the demand, and with Musk promising a $25,000 Tesla car in the next three years, it could very well increase its market share significantly.
Cathie Wood shrugs off her critics: “It almost makes me feel comfortable, to be honest, because it means if we’re right, then the rewards will be pretty enormous.”
Wood’s has a solid background that includes turning Ark into one of the fastest-growing and top-performing investment firms in the world. Wood makes Ark’s research publicly available online and posts real-time logs of her firm’s trades. Instead of hiring MBAs, she prefers to bring onboard young analysts with backgrounds in subjects like molecular biology or computer engineering, figuring they’re more likely to spot the next trend.
After graduating in 1981, she joined Jennison Associates as an economist in New York and made an early call that inflation and interest rates had peaked. Her superiors sneered putting her fantasy down to inexperience. But she was right, and the experience taught her an appreciation for the potentially big upside of going against consensus.
It took three years for Ark to reach the waves of success through surging prices for stocks like Netflix, Salesforce, DNA sequencer Illumina, digital-payments processor Square and digital health provider Athenahealth. Assets increased tenfold, and Ark began to build its brand on the back of bold predictions, having an active Twitter presence and putting free research online.
Ross Gerber is undoubtedly a Tesla fan and believes that “Tesla is the best company in the world for growth.” Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management has become one of the most influential Tesla investors and influencers on social and traditional media.
Last month in a Yahoo Finance article, Ross also stated that Tesla should not be valued as a car company, but rather a tech company and he feels the EV make is streets ahead of its competition. Following Battery Day, the Kawasaki CEO speculated that in the next month, we’re going to see Tesla announce groundbreaking technology that would change the game for not only solar power, but for the cars, too.
The Tesla Owners of Silicone Valley are having a special interview with Rob Gerber on 7 October, which is exclusive to members of the TOSV.
The interview is about getting his insight and perspective on the following topics:
- Tesla’s stock performance and the impact of S&P 500 inclusion
- Future EV competition and the impact to Tesla
- Battery Day announcements
- The future of ICE manufacturers and Tesla wannabes
- The case against Tesla bears and shorts
- Tesla’s energy business
You can follow this link to sign up as a member of Tesla Owners of Silicone Valley.