Tesla CEO Elon Musk: Coronavirus shelter-in-place order poses ‘serious risks’
Tesla CEO Elon Musk on concerns over resuming production in the Bay Area amid the coronavirus pandemic.
Tesla CEO Elon Musk thinks the company’s stock price has gotten out of control.
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Shares of the Palo Alto, California-based electric-car maker soared 87 percent this year through Thursday, dramatically outperforming the benchmark S&P 500, after the manufacturer impressed Wall Street with its ability to navigate the upheaval of the COVID-19 pandemic. Tesla’s market capitalization was about $140 billion before a sell-off on Friday.
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“Tesla stock price is too high,” tweeted Musk, who has an option to buy 1.69 million shares at $350.02 apiece if the company's market capitalization maintains a 6-month average above $100 billion. Doing so would give Musk a paper profit of about $590 million at Friday's price near $700 a share.
Some Wall Street analysts, like Dan Ives of Wedbush Securities, agree with Musk that Tesla shares are overvalued in the near-term.
In a note to clients following Tesla's quarterly earnings report on Wednesday, Ives raised his 12-month price target to $600 a share due to results being "better than feared."
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But others like Oppenheimer's Colin Rusch say shares aren't high enough. He raised his price target to $968 apiece due to Tesla's "ability to disrupt the auto market" and its cheap valuation.
Tesla reported a surprise adjusted profit of $1.24 a share in the three months through March, easily beating the 36-cent loss that was expected. The company earned $16 million on a net basis.
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It delivered 88,400 vehicles in the three months through March, a record for the first quarter, despite disruptions at factories in Shanghai and Fremont, California.
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