{"id":62809,"date":"2013-07-15T11:46:14","date_gmt":"2013-07-15T15:46:14","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=62809"},"modified":"2013-07-15T11:46:14","modified_gmt":"2013-07-15T15:46:14","slug":"tesla-market-capitalization-hits-15-bil-passes-fiat-and-peugeot-combined","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2013\/07\/tesla-market-capitalization-hits-15-bil-passes-fiat-and-peugeot-combined\/","title":{"rendered":"Tesla Market Capitalization Hits $15 Bil, Passes Fiat and Peugeot \u2013 Combined"},"content":{"rendered":"
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Tesla demonstates its new battery-swap capability.<\/figcaption><\/figure>\n

There are plenty of folks who still don\u2019t see much of a future for electric vehicles. Clearly, they aren\u2019t the ones investing in Tesla Motors.<\/p>\n

The Silicon Valley battery-car maker reached a critical milestone Monday morning when its shares surged just enough to push its total market capitalization up to an even $15 billion dollars.\u00a0 And though Wall Street pushed back as the morning dragged on, Tesla stock still was running more than five times its 52-week low.<\/p>\n

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A Good Investment!<\/figcaption><\/figure>\n

That means the maker, which only just posted its first-ever quarterly profit during the January to March period, now has a market cap equal to Italian automaker Fiat and France\u2019s PSA Peugeot Citroen \u2013 combined.<\/p>\n

That\u2019s all the more significant considering that Tesla sold a grand total of about 4,750 vehicles during the first quarter. And while that was a good 5% above the battery-carmaker\u2019s original forecast, that\u2019s little more than the number of Ford F-Series pickups sold in two days and significantly fewer Toyota Camrys sold in a week.<\/p>\n

In fact, the maker\u2019s \u201ccurrent share price assumes the company can achieve unit sales equal to multiple times our current volume estimates and attain a 12.5% margin on earnings before interest and taxes,\u201d wrote John Lovallo, an analyst for BofA Merrill Lynch Global Research.<\/p>\n

The maker has been nudging into double-digit territory, however, with the Model S battery sedan it launched exactly one year ago this month. And Tesla CEO Elon Musk has promised to deliver even better numbers when the maker dials up sales in Europe, China and other overseas markets in the coming months.<\/p>\n

Meanwhile, Tesla is looking to add a second electric vehicle line in 2014, the Model X crossover. And Musk recently told TheDetroitBureau.com that the company is moving forward with plans to bring out a smaller, lower-priced vehicle around mid-decade. It could come in at around half the current price of the Model S, which is generally running between $60,000 and $100,000 apiece, depending on battery range and other options.<\/p>\n

Tesla\u2019s latest burst of activity comes as the maker marks another milestone, today taking a place on the influential NASDAQ 100 stock index. That alone ensures the maker\u2019s shares will have a ready mutual fund market. Since the recent announcement that Tesla would take Oracle\u2019s place on the NASDAQ100 its stock has shot up as high as $133.26 a share, though it was settling back into the $130 range in late morning Monday trading.<\/p>\n

(For more on Tesla’s move to the NASDAQ 100, <\/em>Click Here<\/span><\/a>.)<\/em><\/strong><\/p>\n

Tesla shares began the year at $35.36 a share, and the company had a 52-week low of $25.52.<\/p>\n

\u201cOnce the stock joins the index, you will have some buying,\u201d wrote Sandy Mehta, chief executive officer of Value Investment Principals Ltd. in Hong Kong.<\/p>\n

The question is whether Tesla can continue delighting investors.\u00a0 CEO Musk has already sent signals that the second-quarter results will not be as solid as the prior three-month report.\u00a0 And by some analysts\u2019 forecasts, Tesla would have to be on track to selling more than 300,000 battery-cars annually by decade\u2019s end. That would require it to boost demand more than 16-fold compared to the current rate.<\/p>\n

The media-savvy Musk has expressed nothing but confidence. And he has announced a series of steps since the beginning of the year to help overcome the most obvious concerns about electric vehicles. That includes a \u201cbullet-proof\u201d battery warranty, a nationwide network of so-called Supercharger stations that would allow Model S owners to travel long distances with minimal disruptions, and an even quicker battery-swap system.<\/p>\n

(Tesla demonstrates new battery-swap capabilities. <\/em>Click Here<\/span><\/a> for more.)<\/em><\/strong><\/p>\n

But whether Tesla can maintain even its current pace remains to be seen.\u00a0 Joe Phillippi, of AutoTrends Consulting, is one of many observers who caution that the maker might simply be drawing from a limited cohort of affluent, green-minded motorists and that once this group\u2019s collective demand is filled sales could take a tumble.<\/p>\n

Don\u2019t tell that to Musk or his board, however.\u00a0 While Tesla\u2019s market capitalization might have surged from $12.7 billion to around $15 billion in less than a week, the longer-term goal appears to be almost triple the current figure.<\/p>\n

Last August, the board approved options that would allow Musk to purchase 5.3 million shares of Tesla stock at just $31.17 a share.\u00a0 But he won\u2019t be allowed to exercise all the options unless and until the carmaker has achieved 10 \u201coperational milestones,\u201d and that includes a market cap of $43.2 billion.<\/p>\n

And why not, suggested a proxy statement released on April 11 of this year.\u00a0 After all, it noted, Ford Motor Co was worth $53 billion that day, and General Motors had a valuation of $40 billion.\u00a0 In fact, both of those makers have gained substantially these last three months, which seems to be giving Tesla even more confidence.<\/p>\n

The Tesla board placed a 10-year time limit on Musk\u2019s options, so he has a bit of time left to catch up to the industry giants \u2013 but he\u2019s already well ahead of smaller makers like Fiat, currently valued at around $7.1 billion or Peugeot, at $2.7 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"

There are plenty of folks who still don\u2019t see much of a future for electric vehicles. Clearly, they aren\u2019t the ones investing in Tesla Motors. The maker marked its debut on the NASDAQ100 index by setting a share price record and reaching a market capitalization of $15 bil – more than Fiat and Peugeot combined. But, as TheDetroitBureau.com reports, Tesla is aiming significantly higher.<\/p>\n","protected":false},"author":2,"featured_media":62199,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/62809"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=62809"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/62809\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/62199"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=62809"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=62809"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=62809"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=62809"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=62809"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=62809"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}