Posted on April 05, 2017 by Matt Pressman
Yesterday Tesla [NASDAQ: TSLA] rocketed above $300 per share, an all-time high for the stock. According to Bloomberg, "Tesla Inc.’s Elon Musk poked fun at short sellers as his electric-car maker’s stock surged to a record, vaulting its market value past century-old rival Ford Motor Co. 'Stormy weather in Shortville...' the chief executive officer tweeted Monday, as Tesla shares climbed as much as 5.8 percent. The maker of Model S sedans and Model X crossovers saw its capitalization surge to about $48.2 billion, $3.1 billion more than Ford."
Above: Tesla Model X (Instagram: go.motormagazin)
Ben Kallo, an analyst at Robert W. Baird & Co explained: "I don’t know if people want electric cars, but people want Tesla... people that would normally buy a Porsche are buying Teslas right now.” Furthermore, it's reported that "Tesla has long been valued like a technology stock, in part because of what Kallo called Musk’s 'star power.' Also [as] the CEO of rocket manufacturer SpaceX, which has grand plans to colonize Mars, Musk has demonstrated his pull on Wall Street."
Above: Tesla pulls ahead of Ford in valuation on Monday (Image: CNN Money)
So what sparked this sudden jump in Tesla's stock price? Motley Fool reported, "For its first quarter of 2017, Tesla said this weekend that it delivered just over 25,000 vehicles during the quarter, up 69% year over year compared to its deliveries in the year-ago quarter... Of these deliveries, Tesla said about 13,450 units were Model S and 11,550 were Model X. While both figures were up year over year and sequentially, Tesla's 11,550 Model X deliveries were a bright spot, highlighting the company's ongoing rapid ramp-up of production and deliveries of the late-2015 introduced all-electric SUV. Tesla's record quarterly Model X deliveries were up 381% year over year and 21% sequentially."
Above: This weekend, Tesla reported its Q1 2017 vehicle deliveries (Image: Motley Fool)
The New York Times reported that, "While G.M. and Ford may have strong profits and healthy balance sheets, Tesla offers something Wall Street loves much more: the potential for dramatic growth." Karl Brauer, a senior editor at Kelley Blue Book explains: "Investors want something that is going to go up in orders of magnitude in six months to six years, and Tesla is that story. Nobody thinks Ford or G.M. is going to do that. [And] Tesla is very vocal in talking about how they are positioned as we move from humans driving cars powered by gasoline to computers driving cars powered by batteries."
Above: Wall Street Journal Detroit bureau chief John Stoll discusses Tesla's meteoric rise (Youtube: Wall Street Journal)
Tesla is also positioned as more than just an automaker. It's a technology company — many see its expertise as a battery manufacturer. “It’s almost like Tesla is positioned in people’s minds as an energy storage company that happens to put most of its batteries on wheels... while you have Ford and G.M., and they’re these decades-old, more-institutional industrial companies,” said Andrew Stewart, chief investment officer at Exchange Capital Management. At the end of the day, Tesla is not a company that echoes the past, it's one that represents the future. Elon Musk reminded us, "Tesla is absurdly overvalued if based on the past, but that's irrelevant. A stock price represents risk-adjusted future cash flows."