Business Insider about a sharp increase in the cost of Tesla stock. In early April, Teslas market capitalization surpassed the market capitalization of General Motors — $51 billion. Thats $15 billion more than Tesla estimated a large part of 2016.
And about $7 billion more than Ford. All this has no basis in fact, says Business Insider. The basics of business, Tesla has not changed since the end of last year. Shipments in the first quarter set the tone for 2017, and this means that the company will produce 100 thousand cars per 12 months — only 20 thousand more than in 2016.
The only explanation for the recent surge can be that “shortest” (players in the fall) gave up and started to buy the shares back, journalists. This is logical, since Teslas shares are regularly Shortt on Wall Street, and lately players on the decline is very hurt. According to research Analytics firm S3 Partners, this years “shorts” Tesla lost $3.2 billion. But given the fact that the Tesla costs were overestimated at the expense of its core business of creating and selling expensive electric cars, and that the assets of the company consist of only a few billion dollars, a logical step for investors would be to revise the assessment of the future of Tesla.
Now, when stocks are soaring, the companys revenues in the first quarter look like the ability to more rationally assess the value of the company. In addition, it puts new investors in this position, in which the proportion of shares may be blurred.
However, the overall trend in growth stocks is positive, and the companys shares have always been volatile, say experts. Elon Musk himself only laughs at those who sorta shares of the company. Stormy weather in Shortville.
How Tesla is growing rapidly on the background of the lack of real news and in spite of numerous challenges the company will face this year, causing concern to the market. The bulls, playing on the shares of Tesla, saying that the company Elon musk in the future will be more General Motors and Ford, as the electric vehicle will replace the transport on ice within a few decades, and Tesla will have the largest brand and a great advantage.
The company is unprofitable, but only due to the fact that, like Amazon (which is tipped to become the first company with a market capitalization of a trillion dollars), investing every dollar into the development, moving in the direction of business expansion — the production of not only cars, but also solar panels, roofs, batteries, energy storage systems, charging stations and software. The bears (predicted decline in the value of an asset or the overall market and takes short position) insist that Tesla is simply a scheme for the destruction of capital.
They talk about the inability of the company to make money over the 10 years of its existence, and the failure Mask to consolidate the business, preferring instead to move on and, for example, to release a budget electric car (Model 3). Or create a business in energy storage. Or buy the unprofitable company SolarCity more than $ 2 billion. If growth stocks is really a request for future cash flow, this increase suggests that this cash flow can be equal to zero.
Both perspectives ignore the most obvious problem of the company. Tesla — the automaker that still produces very good cars. The vehicles that the company produces are impressive. But I expect the Mask, the supply of cars in 2018 will reach 500 thousand and 1 million by 2020. The first is a five-fold increase in comparison with anticipated production in 2017, and the second requires a doubling of power plant in Fremont, or the construction of a new plant.
Considering the situation in this context, Tesla traded at $311 per share, are crazy, says Business Insider. Even if they can sell 1 million cars by 2020, most of them will be small cars with a small margin. The owners of the most profitable segments of the market — SUVs and pickups — will still remain the “Detroit three” (GM, Ford, Fiat Chrysler Automobiles), which, in the opinion of the market in the future will cost less than the company Mask.
Tesla plans to start construction of a plant in the Chinese province of Guangdong. This means that the products will be subject to lower taxes, and the automaker will be able to enlist the support that the province provides to manufacturers of electric vehicles. And Musk, meanwhile, reveals new details of implementing your plan. Tesla Semi truck unveil set for September.
Team has done an amazing job. Seriously next level. @NoahMagel unveil a Pickup truck in 18 to 24 months.
The situation with the Tesla rating is likely to escalate before it becomes rational. The race began this year, after another loss-making fourth quarter. Solace to those who enthusiastically “sortit” Tesla, can only be the fact that stock chart Tesla has always been a roller coaster.
Stocks are constantly falling, usually taking with them billions of dollars in market capitalization. Chart GM, Ford and FCA, in turn, look bored: The press wonders why for the last three months, Teslas grown so much in the stock indices based on the formula the value of the index, such as NASDAQ. The markets were a race from the time of the presidential elections in the US, but for Tesla it turned into a mega-race.
It is not like something that usually happens with the stock in the beginning of the year, when investors revise their expectations and, if they have been for some time own shares of Tesla to make a profit. In addition to the dynamics of traders long or short positions — the growth of Tesla is not the result of performance of the company, and focus anyone who is considering a Tesla as a speculative bubble. All of this is not new, as the company was analyzed, and the obvious conclusion is that if the stock price more than $ 300 apiece, the company needed a level of performance that Tesla has not yet reached. At the moment the bubble Tesla seems obvious — just as in the beginning of 2016. The only difference is that it has become so big that it starts to scare you.
“But dont write off the Mask, and resources SpaceX. When Tesla was a difficult time, the company has issued bonds with a very low interest rate, and SpaceX, at that time received a contract from NASA bought them. Musk, in turn, buys the shares of Tesla, increasing its share, and he does it with borrowed money under a pledge of its own shares, owning nearly a quarter of the entire company. Given the relatively small free flow of Tesla stock, Musk will be able at any moment to bury all of shortstop,” concludes Business Insider.