Tesla Motors CEO Elon Musk appears to have a realistic shot at doing something no one else has been able to do since about the first third of the 20th Century: found a successful, new North American automobile manufacturing company. Preston Tucker and the abortive partnership of industrialists Joseph W. Frazer and Henry J. Kaiser tried in the 1940s and ’50s (Kaiser later taking the car company solo), Glenn Pray and Brooks Stevens (sort of) in the 1960s and ’70s, Malcolm Bricklin tried in the 1970s, and former General Motors executive John Z. DeLorean in the 1980s—to name the six most prominent new U.S.automaker startup attempts since World War II.
Kaiser and Frazer perhaps came closest to achieving qualified success, their companies building passenger automobiles for nine years from 1947 to 1956, and through their 1953 purchase of Willys-Overland living on as independent Jeep-maker Kaiser-Willys. This was changed in 1963 to Kaiser-Jeep, until purchased by American Motors Corp. in 1970, and subsequently by Chrysler in 1987.
Tesla Motors is certainly the most impressive and promising automaker startup since the Kaiser-Frazer effort. Last week, shares of Tesla Motors Inc. hit a new 52-week high of $97.12 on May 14, well above its high water mark of $88.00 a day before, closing at $83.24 on the same date. The closing price represented a whopping one-year return of 176.9% and year-to-that-date return of 135.4%. Later in the week, Tesla stock passed $900 for the first time ever, settling at $905 on Thursday, following news that Elon Musk, who reportedly is worth $4.5 billion, will invest $100 million of his own money into Tesla Motors, which has announced plans for a 2.7 million share secondary offering.
Zacks noted that the Palo Alto, California-based leading manufacturer of electric vehicles and electric vehicle powertrain components now has a market cap of an amazing $10.05 billion, with the average volume of shares traded over the last three months standing at approximately 4,651.6K, and that shares of the company began climbing after release of the company’s surprising 2013-first quarter results on May 8, when Tesla Motors posted its first-ever quarterly profit of $15.4 million, or 12 cents per share, on an adjusted basis, in the first quarter of 2013, compared with a loss of $79.3 million or 76 cents in the corresponding quarter of 2012. This indicates a whopping positive earnings surprise of 271.4% given the Zacks Consensus Estimate having been a loss of 7 cents for the quarter.
Zacks also says that Tesla revenues skyrocketed to $561.8 million in Q1/13 from $30.2 million in the first quarter of 2012, thanks to an impressive 5,000 unit sales during the quarter of the Tesla Model S electric car—recently rated by Consumer Reports as the best car it has tested since 2007.
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Back to Tesla Motors, there is speculation that the outstanding Q1/13 sales and market performance makes Tesla an even more likely takeover target, and Elon Musk himself has dropped hints that an acquisition wouldn’t necessarily need to be an unfriendly one. One potential suitor proposed in the rumorsphere is Apple, for which Tesla would seem a logical vehicle to make the late Steve Jobs’s vision of an Apple iCar become a reality.
Elon Musk has referred to the Tesla Model S as his “Macintosh,” and indeed the sleek, all-electric Tesla sedan has an Apple-esque aura about it, with even the smallest details having been lavished with attention in order to be as distinctive and elegant as possible.
However, Editor-in-Chief of Yahoo! Finance and host of The Daily Ticker Aaron Task notes that anyone now looking to buy Tesla—the whole company or just a few shares—is looking at a much higher price vs. just a few weeks ago with the stock having surged over 80% in the past month.
Christian Science Monitor guest blogger John Voelcker, in a column last week entitled “Would Apple really buy Tesla?” thinks Tesla looks unlikely to stay independent in the long run, but he’s skeptical about Apple as a potential buyer, suggesting that more logical candidates would be a established automakers like Daimler or Toyota Motor, both of which are already Tesla investors, and also citing a Green Car Reports suggestion that Ford might be a logical acquirer of Tesla as well.
Bloomberg’s Alan Ohnsman reported May 9 that Elon Musk himself mused to Ohnsman and a Bloomberg editor that an acquisition isn’t expected to happen soon, but he was willing to comment on hypotheticals like another car company such as Daimler or Toyota becoming takeover suitors, noting that from the perspective of a large automaker, “Tesla just seems very expensive. How many cars do we make? What’s our market cap? It seems nutty to them.”
“How about Apple?” he was asked. “They do have a lot of cash,” Musk replied tantalizingly, adding: “I’d guess it would come from outside the auto industry. It would be a buyer with a very large cash position.” Sounds like Apple to a “T”(esla?)