Frankly Tesla would be stupid not to issue as much stock as possible when it's trading far above its intrinsic value.
With new, rapidly growing, highly speculative companies in big markets (auto, space, energy) it becomes very difficult to predict where they'll be in 1 - 5 years. Investors are still (typically) intelligent and will look at what other disruptive companies have done in the past, look at the management team and leadership etc and place a "bet" on the stock. Because these companies are sometimes growing 50% to 100% per year and someone is happy to hold a stock for 3 - 5 years they will pay a substantially high price for stock in terms of _today's_ revenues or profits. It doesn't mean they won't get it wrong - ie if a company falls to growing "just" 40% per year that makes a huge difference 3 years out. It doesn't mean that the stock price for the new stock is any more or less correct than for the older more stable company. it just means it's much more likely to fluctuate over the next 3 - 5 years as risk and upside is better priced in with more knowledge in place.
My experience with Bitcoin has caused me to smile every time this turns-out-it-is-completely-bullshit concept is thrown around
All values are subjective. All of them. There is no "real" or "intrinsic" value (except by consensus agreement of subjective values). The emperor wears no clothes, and there is no rabbit in the hat. Unless we consensually believe there is, that is.
"THERE ARE IDIOTS. Look around."
Arguably "mainstream economics" could be nothing more than a religion, and a very dangerous one by its very high though undeserved power.
Saying that a share is overvalued against its "intrinsic" value is not saying the share is overvalued or will go down, it's just saying that it's currently being priced with an expectation the company will be worth more in the future.
It is exactly what it means [1]
> or will go down.
The intrinsic value of a lottery ticket is below the price you pay, it doesn't mean you can never win. That said, nobody knows the intrinsic value. In the case of TSLA you have a range of sell-side analysts telling you it's somewhere between $178 and $400. (Edit: to be fair, probably they are using multiples [2] and not a proper intrinsic value calculation. A DCF doesn't get you very far in the current market, much less so in companies like Tesla. For a discussion based on fundamentals see [3]).
[1] https://en.wikipedia.org/wiki/Intrinsic_value_(finance)
[2] https://en.wikipedia.org/wiki/Valuation_using_multiples
[3] http://aswathdamodaran.blogspot.ch/2014/03/return-to-firing-...
But even if your valuation is remarkably different than the public markets it does not then follow that you should short; this ignores the importance of time in making a good investment decision. This is compounded by the fact that shorts and options are incredibly effective means of losing lots of money in a short amount of time.
I bought stock and options when this was trading at 35 and sold at around 140 as I put my fair market value at about 125 for this company. Would gladly reenter at that price.
I haven't valued Tesla since 2013 but it was overvalued then so it went into the "nope" pile and I haven't looked at it again since.
Tesla right now is a bet that their battery technology will be insanely profitable and have some sustainable advantage over competing technologies. It's an interesting stock to play with as part of an algo strategy because it's so volatile (again, this is typical of young companies), but I wouldn't own TSLA as a buy-and-hold right now. The share price is just too expensive, and they're going to need massive, continued infusions of capital to continue (as evidenced by the article).
Basically, the risk with Tesla is that if they are crazy profitable, their share price likely won't rise all that much because investor expectations are high. If they are not crazy profitable, the share price will drop over time.