Electric car manufacturer Tesla has a higher market capitalisation than it “deserves”, its chief executive said

October 25, 2013 Leave a comment

October 24, 2013 10:00 pm

Tesla admits market cap is supercharged

By Henry Foy in London

Electric car manufacturer Tesla has a higher market capitalisation than it “deserves”, its chief executive said. Tesla, which expects to sell just 21,000 cars this year, is worth about $22bn, roughly half the value of Ford and a third of the value of General Motors, which sold more than 9m vehicles last year. The California-based company, which counts Hollywood stars such as Cameron Diaz as customers, has seen its stock price rise about 400 per cent so far in 2013. “I think that we have quite a high valuation, and a higher valuation than we have any right to deserve,” chief executive Elon Musk said at an event to mark the opening of a new Tesla showroom in London.The carmaker, whose rise in California’s luxury market has raised eyebrows at global carmakers that have invested in electric vehicles such as Toyota and Nissan, has said it wants to bring a mass-market version of its cars to the market within three years.

Tesla, whose futuristic designs and Californian roots have drawn many to compare it with Apple, on Thursday announced it had hired a former executive at the electronics company to head development of its new vehicles. Doug Field, who began his career at Ford, was charged with developing products such as the MacBook Air, MacBook Pro and iMac at Apple, Tesla said.

Tesla’s flagship Model S, a sleek sedan, has quickly become an environmentally friendly status symbol in San Francisco and starts from $62,400 inclusive of a $7,500 federal tax credit offered on all new electric cars in the US.

The carmaker reported its first quarterly profit in May after going public in 2010, seven years after it was founded.

Its meteoric rise in value has been cheered by green energy campaigners, but some market analysts have questioned whether the stock is overvalued.

The company would work to justify its interest from investors, Mr Musk said on Thursday, and would work to ultimately command a higher value than it does today.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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