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Tesla passes General Motors to become the most valuable US automaker
Key Excerpts from Article on Website of CNBC News
Posted: April 16th, 2017
http://www.cnbc.com/2017/04/10/tesla-passes-general-motors-t...
Tesla's market capitalization is now bigger than General Motors', making it the largest U.S. based automaker by that metric. Investors are clearly betting on Tesla's potential, and are undeterred by factors such as Tesla's loss of $773 million in 2016, and the fact that it sells only a tiny fraction of the cars delivered annually by established competitors. General Motors sold about 10 million cars in 2016 compared with Tesla's roughly 76,000. Tesla has only had two profitable quarters in its history as a public company, while GM earned a profit of more than $9 billion last year. On Monday, PiperJaffray analyst Alexander Potter published a note upgrading his rating on the stock from neutral to overweight and raising his price target from $223 to $368. "In many ways, TSLA seems to play by its own rules," Potter wrote. For instance, the company burns through cash at a rate "better-established companies would likely be crucified for," devises "unreasonably fast" production timelines and "spurns industry norms," by doing things such as choosing to sell directly to customers, rather than through dealers. Morgan Stanley analyst Adam Jonas said in a note published Wednesday that the company could potentially enter markets collectively worth trillions of dollars. These include a car-sharing business with a value Jonas estimates at around $10 trillion, a $1 trillion logistics market, and a $2 trillion to $3 trillion energy storage market.
Note: Tesla's success comes despite car industry collusion with government to thwart direct-to-consumer sales of its vehicles.
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