Nobel Prize holder Paul Krugman has put up a comparison between Tesla stock and Bitcoin just to make a joke about Tesla owner Elon Musk that he won’t put his faith in him to even take care of his cat.
He also stated that the value or worth of Tesla is not even half of Microsoft and Apple. Moreover, the companies owned by Elon lack the network effects of most of the tech giants.
“Given what we’ve seen of Musk’s behavior, I wouldn’t trust him to feed my cat, let alone run a big business,” Krugman jokes.
Paul’s comments came right after the fall of Tesla Motors by 11.4 percent in China. According to reports, Tesla had cut production in that territory.
Paul believed that the reason for the popularity of Tesla was mainly because he was characterized as a “cool guy”, but after his actions and attitude towards handling Twitter was seen, that opinion of a “cool guy” has so far changed among individuals.
Earlier, the stocks of Tesla went up nearly 13 times at the time of the pandemic. After its peak in November 2021, it has been falling to as much as 73%. This made the market capital of Tesla fall to $350 billion from $1.2 trillion at Tuesday’s close.
Many analysts have analyzed that the sole reason for the drop in Tesla shares is that when Elon took over Twitter in October, he has been continuously modifying the overall working pattern of the microblogging site. He is so occupied with Twitter that on the other side the shares of Tesla have been falling.
Krugman asked in a New York Times column published Tuesday, “Did the Tesla story ever make sense?”
As Paul stated, the value of Tesla is not as much as Apple and Microsoft. The reason for the statement is that smartphone maker Apple creates an ecosystem of various devices, and applications and provides services that most users find difficult to stop using.
While for Microsoft, the firm provides many work-related and essential tools such as Microsoft Excel, Microsoft Word, Microsoft PowerPoint, etc. These tools remain the basic options for many businesses and corporations as they are popular and provide a good standard, according to Paul.
In comparison to these two companies, Tesla has to face competition from its opponent companies like GM and Ford to stand in the market, also the network effects of Tesla are much less than its competitors, said Krugman.
The question raised by Paul is how could Tesla monopolize the market and earn big yields if the excitement for its creations reduces day by day.
“It’s hard to imagine what could secure Tesla’s electric vehicle business in the long term,” he said.
He also condemned Elon for his unsteady beginning on the Twitter platform after his takeover. He became the Chief Executive Officer of Twitter in October and since then laid off many employees, removed many features, and changed the overall working environment of Twitter.