Tesla's Run May Be Stalling Out
SAN FRANCISCO (TheStreet) -- Shares of Tesla Motors
When Tesla issued convertible debt to help pay off its Department of Energy loan earlier this year, the convertible debt becomes convertible at $184 a share, some $25 away from where the stock is trading. While Tesla's run is no doubt incredibly impressive, annual moves of more than 400% are outliers, not the norm, no matter how impressive the company might be.
In Tesla's second quarter, revenue was $405 million, impressive for a small automaker, much less one credited with changing the industry. The Model S, of which Tesla delivered 5,150 units in the second quarter, continues to be a hit with consumers, the media, and analysts. Having personally driven the car, I can say it is the best driving experience I've ever had.
Last week, NYU professor Aswath Damodaran put out a valuation piece, saying he got an estimated fair value price of $67.12, prompting much debate on social media. Professor Damodaran's piece was questioned as he looked at the Palo Alto, Calif.-based Tesla purely as an automotive company, and not one that disrupts other industries, including batteries and power train systems. Tesla, which gets a portion of its revenue from selling power trains to Toyota Motors
Even CEO Musk, who in addition to running Tesla, also runs SpaceX, has said that Tesla's valuation is generous. Tesla is being valued right now not as a technology company or an automotive company, but rather a disruptor to the market it is in. Disruptor companies, like Amazon.com