Tomahawk, WI 09/04/2014 (Basicsmedia) – Tesla Motors Inc. (NASDAQ:TSLA) valuation in the electric car segment continues to be a bone of contention with Vilas Capital CIO and CEO, John C. Thompson, of the opinion that the company is five times over-valued. Mr. Thompson argues that there is no way Tesla can be more valuable in terms of market cap when compared to other industry veterans.
In an interview on CNBC, Thompson reiterated that Tesla can only be worth $5 to $10 billion and not the current speculated margin of $35 billion.
“[…] Tesla Motors Inc. (NASDAQ:TSLA) got a bigger market cap than John Deere; it has twice the market cap of Fiat and as Phil just said Fiat owns Chrysler, Maserati Ferrari and obviously Fiat. You know it is such a big market cap that I don’t see how they get it in any reasonable time frame live up to that valuation,” said Mr. Thompson.
Longboard Asset Management CEO, Cole Wilcox, remains bullish on Tesla valuation at $35 billion maintaining that its valuation is’ based on current market status and position. Tesla is already 66%up this year and still going strong. It goes without saying that Tesla is in a transition course with the release of Model-X, as well as the construction of the battery Gigafactory.
“We made a lot of money on the move from $35 to $200 we stepped aside; we are back in it, and you know it is not a valuation trade. I like stocks that go up and make new highs and you know this thing seems to have a lot of juice, and they are going to new product cycle with Model X,” said Mr. Wilcox.
Improved production with the release of Model-X according to Wilcox looks set to be the main play for Tesla, which should allow it to compete against other automakers like General Motors Company (NYSE:GM). Wilcox expects Tesla’s Model X to enjoy success in the industry compared to Model S due to improved production capacity.