© Reuters
Investing.com – As Tesla Inc (NASDAQ:) stock hit a nearly 2-year low on Tuesday, economist Paul Krugman pointed out in a NY Time column earlier this week that Elon Musk’s company lacks any of the qualities that would make it a long-term player in the electric car market.
Attempting to answer “the question of why Tesla was worth so much,” Krugman opined that “investors fell in love with a story about a brilliant, cool innovator, despite the lack of a good argument about how this guy, even if he really was what he seemed to be, could build a money machine in the long run”.
In other words, Krugman believes that Tesla investors aren’t actually investing in the company, but rather in Elon Musk. This explains how much the distraction Twitter (NYSE:) is for Musk is affecting TSLA stock price.
The economist went further by estimating that Tesla action has key points in common with…the!
“There is a bitcoin parallel,” Krugman wrote, pointing out that “despite years of effort, no one has yet managed to find a serious use for cryptocurrency other than money laundering,” and noting that this hasn’t stopped prices from skyrocketing “thanks to hype, and (…) by a group of true believers”.
He concluded that “something similar must have happened with Tesla, even though the company does make useful things.”