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After eight years as a public company, Tesla still has teething problems



Electric car maker Tesla Inc. celebrates its eighth anniversary as a public company on Friday, and investors getting in early and sticking to their holdings are enjoying some nice winnings.

Since the stock

TSLA, -1.28%

closed at $ 23.89, or 41% above its initial bid price, on its public debut on June 29, 2010, it has shot by a factor of nearly 15 , [19659002] That would lead to significant profits for Chief Executive Elon Musk if he had retained his original stake in the company. Musk announced a stock value of $ 670 million at the time in an initial SEC filing of 28.4 million shares or 29.1

% of its outstanding shares on February 3, 2011. That investment would be worth about $ 9.84 billion today. (Tesla's recent release of Musk's stake showed that he held 33,737,921 shares or 19.9% ​​of the outstanding shares on June 12, 2018.)

For comparison, shares of rival Ford Motor Co.

F, -0.13%

have gained 14% over the last eight years while shares of General Motors Co.

GM, -1.19%

increased by 34%. The S & P 500 Index

SPX, + 0.72%

has almost tripled in the same time (plus 161%).

But Tesla's stock rally has come to a standstill last year as analysts are still at odds with Musk, who has taken a more aggressive stance on perceived losers in recent months.

The stock has lost 3.3% in the last 12 months, losing almost 10% since September 18, 2017, a record $ 385. Meanwhile, Ford shares rose 0.7%, GM shares up 15% and S & P 500 up 13%.

Mobile Destinations

The anniversary comes at a crucial time for Tesla and Musk, who is under pressure to reach the company's goal of producing 5,000 copies of its Model 3 sedan a week by the end of June? This goal has been pushed back time and time, and there have been reports of manufacturing problems and disruptions in battery cells, module assembly and factory automation lines.

At the same time, the company was confronted in its factories and state investigations with questions about working conditions in the safety of its autopilot driver assistance system.

Musk's assurances that the company will put production on track, be profitable in the third and fourth quarters, and even achieve a positive net cash flow in the second half of the year, without having to raise fresh capital, were reported by Bears in New York Asked and greeted by cops.

Tesla's free cash flow increased from minus $ 277 million in the fourth quarter to minus $ 1 billion in the first quarter. Analysts expected a negative free cash flow of $ 889 million.

Musk's fighting stance in recent discussions with financial analysts and the media has further polarized the investment community over the company and its outlook: for bulls, he's a visionary genius; for Bears, a leader increasingly unsuited to leading a maturing corporation, and whose many projects – space travel, hyperloops, bringing people to Mars – may make him a little too thin.

Read Again: Elon Musk behaved like an idiot and the Tesla stock paid the price

Musk makes headlines almost daily thanks to an active Twitter account and the habit of critics to attack in a slightly undignified light.

This month alone, he has appeared in a story outlining a quarrel with an artist from Colorado about a picture of a farting unicorn; he has warned a bearish Goldman Sachs analyst that he is "for a rude awakening"; he lit Twitter with a talk about an electric pick-up truck – the production problems of the Model 3 are damned.

There is more. Musk accuses a former employee of sabotage and the threat of violence in the workplace; he has shown a new production line that is literally housed in a tent: and he has warned short sellers that they have about three weeks "before their short position explodes."

Also read: Trump tariffs would be bad for the entire global auto industry, says Moody's

In May, Musk unveiled in a notable fit by Pike, plans to create a Yelp-style site where people can gauge the credibility of journalists and news organizations, and suggested he call them Pravda, the main propaganda scandal of the former Soviet Union.

Analysts interviewed by FactSet have an average valuation of Tesla shares and an average stock price target of $ 306.25, or 12% below the current level.

Baird analysts released a bullish note on Thursday, saying they expect the company to report second-quarter deliveries by next Tuesday and that the news will be bullish and support the stock. Analyst Ben Kallo said he expects the company to deliver about 25,000 Model 3s in the quarter, with more in the channel.

"We think there is a chance that Tesla will announce a path to further production expansion, which is likely to be a positive catalyst," he wrote in a note reiterating an outperformance of the stock.

On Friday, Instinet Analysts reiterated their positive stance on the stock, even though they warned of probable price volatility on the back of the delivery report next week.

Now reading: It's soon time for Tesla's board to move on to Elon Musk

"We expect Tesla to reach its 5,000 / week Model 3 production target by extrapolating peak production past Goals, "wrote analyst Romit Shah. He reiterated his buy rating and target price of $ 450, which is 28.5% above his current trading level.

But others are still bearish, especially as traditional car makers make progress in developing and selling their own electric vehicles and continue with self-propelled technology.

Hedge fund manager David Einhorn has questioned this week if Tesla has a viable business model Nothing that had failed to make a profit, as it had a peak demand for its vehicles and no competition, wrote Janney analysts in one Note.

Einhorn actually expects the competition to heat up quickly, which could be the biggest growing pain for Musk's Tesla.


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