Why Tesla, Netflix isn’t all about the money
Elon Musk has made shareholders a lot of money… despite not making a lot of money. Heck – the company lost nearly $2 billion last year and used up $3.4 billion in cash after capital investments. Yet Tesla’s stock is up close to 2,000% since its IPO on June 29, 2010.
Investors seem to like so-called disruptors… and are buying into companies like Tesla that are finding ways to survive in a rapidly changing world. Other companies that focus on near-term profit often don’t stick around long enough for that metric to even matter.
A bet on the future… because our dear friend Elon might just disrupt the entire auto industry and own a lion’s share of the market as the world moves toward electric cars. Similarly, Netflix is another company with sky-high equity returns without much profitability. This is being made possible by the company’s ability to succeed in the future on a large scale. These companies are throwing investment dollars away like hot potatoes and investors are loving it.