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Contribution Details

Type Bachelor's Thesis
Scope Discipline-based scholarship
Title Market Rationality and Electric Vehicle Companies: An Analysis of Tesla
Organization Unit
  • Tobias Klöpper
  • Kjell G. Nyborg
  • Benjamin Schneider
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Number of Pages 46
Date 2022
Abstract Text This thesis presents a detailed analysis of market rationality in the electric vehicle industry by valuing Tesla, and furthermore attempts to find indicators of investor sentiment being the main driver behind the company’s valuation. The stock is valued by applying a discounted cash flow valuation as well as through multiples of comparable companies. Models examining institutional ownership, short interest and the reaction of the market to supposed noise conclude that the estimated overvaluation of approximately 200% could be attributed to investor sentiment and noise traders. In addition,there are indicators pointing towards noise trader risk being present or sophisticated investors ”riding the bubble”.
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