Billionaire investor Rakesh Jhunjhunwala has hailed Tesla CEO Elon Musk as a “true pioneer and entrepreneur”, however, he wasn’t quite convinced about his electric vehicle company’s valuation. “Elon Musk has not given the market cap of tesla. It is the public who has created it. This market cap is not going to last,” Jhunjhunwala told ET Now recently in an interview. However, he added that it doesn’t take away the entrepreneurial capabilities or performance of Musk. “So, the valuation of Tesla is not linked to the capabilities of Musk.” Tesla’s market cap, as of Friday, stood at $648 billion up from around $140 billion in early February 2020 vis-a-vis the $209 billion market cap of Toyota and the $111 billion market cap of Volkswagen.
Tesla shares had wiped out their year-to-date gains on Tuesday. The stock had dropped 13 per cent to $619 in New York — its biggest intraday decline since September 8 before it pared much of the loss to close down 2.2 per cent, Bloomberg reported. The stock was down 31 per cent from January 25 record intraday high to its lowest point on Tuesday. Importantly, Musk was no longer the world’s richest person after Tesla’s shares declined 8.6 per cent on Monday and erased $15.2 billion from his net worth. Currently, Musk’s net worth stood at $174 billion, according to the Bloomberg Billionaires Index. Amazon’s Jeff Bezos was the richest person in the world with $181 billion net worth.
Jhunjhunwala, which had backed gaming technology enterprise Nazara Technologies — among a clutch of internet startups looking to go public, said that he would not like to pay much money for companies who have ‘perceived’ large markets and good positioning in that market but no cash or very little cash flows. “So, you are discounting a large part of the future into the present. Like Uber, after its public issue, it never went up. So, personally, I am not a very favoured investor of internet companies. But people have made money so good luck to them.” Apart from Nazara, multiple startups such as Nazara, Policybazaar, Zomato, Flipkart, Delhivery, MobiKwik, BigBasket, etc., are looking for IPO ahead.