Tesla ()
“Doubt” has been worn like a badge of honor by naysayers when placing bets against Tesla (TSLA) CEO Elon Musk. How’s that playing out? Smart investors, on the other hand — those who have latched onto Musk’s promises — have gotten rich calling shotgun. For your sake, you were on the right side of the trade Monday.
Tesla stock raced more than 7% higher Monday, reaching to an all-time high of $299. The stock, which has has already soared 40% year to date, besting the 5% rise in the S&P 500 index, has pushed Tesla ahead of Ford (F) in terms of market cap. The California-based electric vehicle company, which on Sunday said it delivered 25,000 cars in the first quarter, is now valued at about $3B more than Ford, which sold more than 236,000 cars in March alone.
At it current pace, Tesla — only fourteen years old — is poised to surpass 120-year old General Motors (GM), which has a market cap $51 billion as of Monday’s close. Tesla has punished the short sellers, who held almost 20% of the float as of March 15. These days, “doubt” — that once distinctive emblem, purported to be intelligence — has been replaced by the marks of tire treads as Tesla continues to run over its enemies and its own estimates.
On January 3 — when TSLA stock traded at around $213 — I made a case for why the shares would be dominant in 2017, posting as much as 60% returns. Much of the optimism was based on the premise that Musk would make good on his promise that Model 3 deliveries will begin in 2017. Tesla’s ability to deliver $35,000 Model 3 vehicles would inject significant cash flow to the company’s given there is a waiting list of about 400,000 people who have each paid a $1,000 as a registration fee.
Beyond the Model 3, on Sunday not only did Tesla top its own delivery forecast of 23,000 to 24,500 vehicles, marking an almost 70% rise year over year, the company now expects to deliver between 47,000 to 50,000 cars in the first half of 2017. “This [47,000 delivery target] bodes well for the company and should add to recent positive sentiment for Tesla's fundamental performance,” said CFRA Research analyst Efriam Levy.
All told, the fortunes of Tesla and the credibility of Elon Musk have taken a right turn. And while Tesla is still losing money taking on larger players Ford and GM, which are both deep-pocketed, it is TSLA investors who are cruising all the way to the bank. Seatbelts are optional.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
