Tesla reached a tipping point with Hertz deal, $1T market cap
Wedbush Securities managing director Dan Ives said Monday that Elon Musk's $Tesla(TSLA.US$reached a "tipping point" with a deal to sell 100K electric vehicles to rental car company $Hertz Global Holdings, Inc.(HTZZ.US$.
In an interview with CNBC, Ives added that the company reached a "watershed moment" by passing the $1T market cap mark, as the company remains in the early innings of a "green tidal wave."
Early Monday, Tesla revealed a deal to provide 100K vehicles to HTZZ, which plans to offer the EVs to its rental customers. Bloomberg reported that the deal will represent about $4.2B in revenue.
News of the deal sparked a nearly 13% rally in TSLA on Monday, adding to gains posted last week.
Fueled in part by its recent earnings release, shares set a new all-time high last week, with Monday's advance extending that peak. TSLA reached an intraday 52-week high of $1,045.02 before closing at $1,024.86.
Monday's gains also sent TSLA's market cap above $1T, putting it in a class with $Apple(AAPL.US$, $Microsoft(MSFT.US$, $Alphabet-C(GOOG.US$and $Amazon(AMZN.US$. $Facebook(FB.US$has been in the $1T club as well, although it has fallen below that level recently.
Asked how TSLA can maintain its market leadership as the EV market becomes more crowded, Ives pointed to several advantages the company holds over latecomers to the industry.
"I think Tesla has a battery technology moat, the supply moat ... and then you look at just the brand and the cache that Musk has built," he said.
Ives asserted that his figures show TSLA demand outstripping supply by about 10%.
"We've never viewed Tesla as an automotive company. We've viewed it as a disruptive technology company," Ives noted, highlighting his firm's $1,500 bull-case price target.
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Tiptopptrader : A deal to sell cars to a bankrupt rental company increased Tesla’s valaution more than the entire market cap of General Motors. The clown show continues.
Tesla added over $100 billion to its value as a result of this 100k car announcement. So Mr. Market thinks Tesla will make one million dollars on each car it sells to Hertz? Good luck Tesla - that's a tough bar to clear.
Stock price movements can't be explained by such news alone most of the time...
Tesla gets a car order for $4.4B and their Market Cap increases $115B. This makes perfect sense. LOL!
TeslaBull999 : Don’t read the news on the surface only.. 100,000 cars means millions of ppl will be able to drive Tesla car on rent before deciding to buy their own car. This is marketing genius don’t you think so?
TeslaBull999 : Tesla has unlimited demands and Tesla needs to ramp up production of model 3 and model Y to match those demands
NotRoss : Tesla's market value has surpassed the sum of 11 traditional car companies including Toyota, Volkswagen, BMW, and GM
10bagger moo : Tiptoppttader is Gordon Johnson