Tesla Inc (NASDAQ:TSLA) CEO Elon Musk — basically labeled a snake oil salesman by former General Motors Company (NYSE:GM) vice-chairman and legendary “car guy” Bob Lutz — is helping juice his company’s stock price Thursday thanks to a series of new product announcements that reinvigorated the hype machine.
This time, in a series of tweets, he hinted at the unveiling of the “Tesla Semi” in September, a Tesla pickup truck in 18 to 24 months, and a new roadster convertible. This confirms the “Master Plan” road map Musk unveiled last summer. Tesla stock responded with a 3% spike near the end of Thursday’s trade.
As a reminder, TSLA has been in full-on momentum move since December, up some 70% into Tuesday’s high on growing excitement over the looming launch of the Model 3 sedan later this year. Musk hinted that the Model 3 would be unveiled in July.
Never mind problems, as outlined by Lutz, including a massive cash burn rate, constant need for capital raises and equity dilution and intensifying competitive pressures (GM’s own Chevy Bolt, for instance). When Musk speaks, people believe in his dream of a renewable, carbon neutral future where solar panels on your roof charge a peak-cycling battery pack in your garage to help power your Tesla Model S.
Execution risks could hardly be higher: The company is targeting the production of 500,000 vehicles next year, up from just 84,000 last year. And valuations are eye-watering: Tesla’s market capitalization hit $51.2 billion earlier this week, eclipsing GM’s $51.1 billion and Ford Motor Company’s (NYSE:F) $45.1 billion valuations.
Much of the rise in Tesla stock has been driven by the allaying of capital raising fears after China’s Tencent Holdings (OTCMKTS:TCEHY), owner of Chinese social network WeChat, acquired a 5% stake in the company. Also playing a role has been a recent Piper Jaffray analyst note assigning a $368 price target on the admittance that rational arguments by the TSLA bears “probably won’t matter.”
Tesla will next report results on May 3 after the close. Analysts are looking for a loss of 78 cents per share on revenues of $2.59 billion.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.