Shares of the electric-car maker passed $200 for much of the day Thursday before falling back to close at $199.63. That's a record high for Tesla, whose stock lingered at $40 just a year ago. That gave Tesla a market value of $24.5 billion, an astonishingly high amount, especially considering that GM is valued at $56 billion and Ford Motor (F) at $59 billion.
But that’s the kind of faith investors have in Tesla and its engaging chief executive, Elon Musk. It may also reflect excitement building in anticipation of the company’s fourth-quarter earnings report Wednesday. Wall Street is looking for Tesla to report a profit of 19 cents a share on $646 million in sales, a vast improvement from the loss of 65 cents on $306 million in revenue a year earlier.
The excitement is curious considering how much Tesla disappointed shareholders the last time it reported earnings. Back in November, shares fell more than 11 percent after the company announced it had lost $38 million, once items like stock-based pay and interest expenses were factored out.
All in all, the quarter was pretty decent, it’s just that investors expected so much more.
During that quarterly conference call, Musk did hint at better times ahead. “We really are production-restrained, not demand-constrained,” he said. In other words, according to Musk, Tesla is making its Model S as fast as we can. “I think we’ll see some relief on that constraint next year,” he added.
Well, next year is here, and investors are waiting for that improvement to show up.
Tesla’s also riding high on its prospects in China. Last month, the company’s showroom in Beijing took a couple hundred orders for the Model S in its first two days, MarketWatch reports. And the car won’t even be delivered until August.
Finally, people are just getting a little revved up over Tesla’s upcoming Model X, which Musk says will have the flashy falcon-wing doors best associated with the DeLorean.
Tesla’s crazy share price spike is all about the future of the company. Of course, every notch up the chart sets expectations that much higher for Musk and crew. The quarter had better hit top speed, or else investors will shift into reverse.