Tesla’s valuation raises grim reminders of the dot-com bubble

Tesla’s stunning valuation growth has brought to mind the frothy optimism of the boom in internet companies that ended in disaster in early 2000.

Investors are asking: How is Tesla, which had a loss of $330 million last quarter, worth almost the same as General Motors, which made $2.6 billion?

To true believers, Telsa’s valuation is justified not by its performance so far, but by future potential. Skeptics point out how similar that thinking is to investors in companies like Pets.com, which was arguably a good idea that was attempted ahead of its time. If Tesla fails to deliver on the expected growth, it too could face dire consequences.

Going by the numbers alone, Telsa’s price-to-book ratio of almost 11 is indeed much higher than some of the most infamous dotcom companies, according to a CNBC analysis of the historical data.

But the company’s price to revenue ratio of about 6 is healthier than most doomed dotcom enterprises, which had very little revenue to back up their big plans. Here’s how the numbers compare to the dotcoms immediately before the crash and other automakers today:

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