Tesla Replaces Oracle On Nasdaq 100 Index

4 years ago by Jay Cole 3

Tesla Joins NASDAQ 100 On July 15th, 2013

Tesla Joins NASDAQ 100 On July 15th, 2013

When Oracle said that it was moving to the NYSE  (New York Stock Exchange) from the Nasdaq in June,  it was pretty big market news as it was quite a pick-up for NYSE Euronext (symbol NYX).

Oracle Leaves The NASDAQ For The NYSE

Oracle Leaves The NASDAQ For The NYSE

So who will replace Larry Ellison’s 146 billion dollar tech giant that had $37 billion worth of revenue and almost $11 billion in profit at the NASDAQ?  How about Tesla?

And on Monday, July 15th, Tesla Motors (symbol TSLA) makes that move official by being added to the NASDAQ’s listing of the top 100 securities trading on the exchange.

Tesla closed this past Monday (July 8th) at just over $120 a share; which gave the California automaker a market cap about a 10th that of Oracle, but at a still very meaty $14 billion dollars.

Tesla ended its last fiscal year with revenues of $413 million dollars, which netted them a loss of $396 million.  However, through the sale of ZEV/green credits worth about $68 million, (that are not re-occurring) the company managed to post a profit of about $15 million in the last quarter.

3 Month Chart Of Tesla

3 Month Chart Of Tesla

It is hard to say at this point whether or not Tesla will mature into the company it has been valued at, but that realized result will not come in the near-term, and Tesla will certainly now face an unparalleled amount of focus and scrutiny.

Sometimes it is easy to forget that Tesla is still an automotive company at its core, and they compete in a market that is notoriously hard to make a profit in; especially in the plug-in segment.

Or that Tesla has only sold about 12,500 Model S sedans so far, and that long-term demand is still far from assured, although the automaker has gotten off to a great start.

 

Tesla Maps Out Their Plans For The Next 4 Years (click to enlarge)

Tesla Maps Out Their Plans For The Next 4 Years (click to enlarge)

As for the future:

Tesla plans to sell another 11,000-12,000 electric sedans to end out this year, and between 23,000-25,000 in 2014 (according to a report by Goldman).

Volume sales of the Model X SUV (based on the S) arrive in 2015, with the higher volume entry level car (codenamed Bluestar) arriving in 3-4 years according to the CEO, Elon Musk.

In a nutshell, Tesla with its $14 billion market cap currently has 34 boutique stores, and has plans to perhaps sell 75,000 cars between 2012 and 2016 worldwide…with full year/current year profitability far from being assured.

As a comparison, GM with a market cap about 3x that of Tesla, will sell that many cars (75,000+) in the next 8 days in the US alone.  (GM sold 264,843 in America in the past 4 weeks).

Don’t misunderstand us, we love and believe in Tesla motors, and we love and believe in the Model S, but there is a limit to how high one can fly on market sentiment before encountering some turbulence.  So, while entering the NASDAQ 100 clearly marks the high point in the company’s history…we are afraid it might also mark the high point in the company’s history.

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3 responses to "Tesla Replaces Oracle On Nasdaq 100 Index"

  1. Josh says:

    The key to the Tesla valuation is 25% gross margin guarantee by Musk. And to do that they need to be able to sell direct to consumers. It remains to be seen if they can pull off both of those.

    At the same time, they have to make sure the competition does not beat them at their own game: long range, high performance, fast recharge.

    Not an easy feat, but it seems like it is clear sailing on everything other than the NADA issues for the next couple years. The stockpile of cash pretty much guarantees that they will get Model X to market, build out the supercharger network, and expand the retail/service presence.

    They are going to have to really start minting money Apple style to get Gen III designed and into production though.

  2. Jay Cole says:

    Nothing to do with Tesla, but Elon Musk’s other project (SpaceX) had a big day this month:

    /good stuff

  3. Roy_H says:

    Tesla stock is priced way beyond reason, but I am glad Tesla was able to take advantage of that and pay off the DoE loan. I would suggest anyone holding Tesla stock, to sell now as I believe a severe price correction will come soon.