Tesla’s rise is part of the “bubble” in the US stock market.

Tesla’s share price rose in part because the company reported its fourth consecutive quarter of earnings in its July 22 quarterly report, which qualified the company for inclusion in the S & P 500 index, along with better than expected second quarter auto delivery data.

Tesla’s share price has risen nearly 400% this year, but its rapid rise has puzzled a famous investor.

“I really can’t explain Tesla,” Joel Greenblatt, Wall Street legend and co CIO of Gotham asset management, said on Monday. I think there’s a lot of speculation in the market, and some of it goes to Tesla. “

Tesla’s share price rose in part because the company reported its fourth consecutive quarter of earnings in its July 22 quarterly report, which qualified the company for inclusion in the S & P 500 index, along with better than expected second quarter auto delivery data.

Recently, Tesla’s share price surge seems to be largely driven by the company’s announcement of a 1:5 split. On August 11, the day Tesla announced the news, the company closed at $1374.39, but is now trading at $2051, up about 52% in less than two weeks. Moreover, most of the so-called stock splits are superficial, and the company’s fundamentals will remain unchanged.

Mr Greenblatt, known for his value investment framework, has always focused on the underlying fundamentals of companies, targeting reasonably priced companies that are supported by factors such as growth potential and balance sheet strength.

Greenblatt said Tesla’s rise is part of the market’s “bubble”.

“Because interest rates are too low There is no place for your money to invest, so there is speculation in the market. But you know, I think Tesla’s [speculation] is worse than Apple’s

Apple is another so-called “theme stock,” but Mr Greenblatt said, unlike Tesla, its underlying fundamentals are driving its valuation.

“On the other hand, you know, Apple has a good franchise, and it’s actually getting stronger, so its premium isn’t much higher than the market. And it has good growth prospects, so I’m not too worried about Apple. “

Apple is currently the world’s largest company by market value and became the first U.S. listed company with a market value exceeding $2 trillion on August 19. The valuation of the Cupertino based company has doubled in just over two years.

According to some media calculations, if the highest value of US $2.13 trillion is calculated, the market value of apple is equivalent to two thirds of India’s annual GDP (US $3 trillion) and 7 times of Pakistan’s annual GDP (US $278 billion).

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