- Shana Lynch
- Managing Editor- Silicon Valley Business Journal
- Email | Twitter | Google+
But is this stock price sustainable? Do investors have anything to worry about?
Here are the three reasons for the booming stock - and three reasons to stay a little wary.
1. Ditching the loser sentiment
CEO Elon Musk has the golden touch these days. He paid off Tesla’s government loans nine years early, and unlike some of his company’s early competitors (Fisker Automotive, for example), Tesla made a profit for the first time this past quarter. The company scored one of the best ratings Consumer Reports has ever given an electric car just this month, as well. The company is having a banner month.
2. More customers kicking the tires
Tesla, which sold about 4,900 cars in its most recent quarter, estimates it will make 21,000 cars in 2013, and maybe as many as 25,000, according to a bullish Goldman Sachs report. The report also notes Tesla is seeing order rates of about 200 cars a week in Europe, with Germany expected to become the company’s biggest market in the region. China is expected to be the Asia stronghold for the carmaker. Oh, and those rumors about a cheaper Tesla continue to surface - if legit, the move would widen Tesla’s market and help it compete with the cheaper Nissan Leaf.
3. Investors want in
Since its May 8 earnings, the stock has been on fire, up 98 percent. And today’s positive report from Goldman Sachs (which also highlighted battery performance and more efficient manufacturing) helped push Tuesday’s stock price up nearly 14 percent from Friday’s close of $97.08.
Shana Lynch is Managing Editor at the Business Journal. Her phone number is 408.299.1831.
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