Tesla’s stock is stupidly expensive. It may go higher and shareholders may be rewarded, or it may languish or fall.
There is no law prohibiting stupidly expensive from becoming moronically expensive. Moreover, speculative companies that actually achieve explosive sales and profit growth for a number of years can actually make outlandish valuations seem justified for a time.
The problem comes when fantastic expectations disappoint and worried shareholders look down to discover the thinnest of thin air beneath them.
Shares of the electric automobile maker were added to the S&P 500 Index last week and struggled. But they are still up an astounding 690% this year and now has a market value of…