Business Maverick

Business Maverick

Tesla Soars Past $1,000 After Musk Seizes on Nikola’s Hype

Elon Musk Photographer: Andrew Harrer/Bloomberg

Elon Musk wasn’t about to let a revenue-less manufacturer of zero-emission semi trucks steal the spotlight from Tesla Inc.

Elon Musk sent an email to employees before the market opened Wednesday declaring that it is “time to go all out” and put Tesla’s Semi into volume production. Musk didn’t give a time frame for when he expects mass output to actually happen. Just six weeks ago, Tesla said it was postponing initial deliveries to 2021, roughly two years later than initially planned.

If Musk was looking to regain the attention of any investors whose eyes had wandered toward Nikola Corp., the market got the memo. Tesla’s stock surged past $1,000 for the first time, while shares of newly listed Nikola sold off after days of hype about its plans to bring battery-electric and fuel-cell haulers to market in the coming years.

“This is Elon making noise because of Nikola,” said Ben Kallo, an analyst at Robert W. Baird. He said other factors are fueling the stock’s gain, including strong sales in China and the anticipation of a “Battery Day” event as soon as this month.

Read more: Wedbush is bullish about Tesla’s China prospects

Tesla soared as much as 8.4% to $1,019.86, lifting its market capitalization to an intraday peak of $189 billion. It’s gaining ground on Toyota Motor Corp., the world’s most valuable auto company at $215.9 billion.

After passing VW, Tesla gains on Toyota

Nikola shares fell as much as 17% on Wednesday after advancing 122% the prior two days. It’s planning to start delivering a battery-electric semi next year, followed by fuel-cell rigs in 2023.

“Given some of the other news flow in the past month to two months on the Class 8 truck market, I think he’s probably trying to keep Tesla in the marketing cycle just for all the mega trends going on in trucking,” Jeff Osborne, a Cowen & Co. analyst, said of Musk. He rates Tesla the equivalent of a sell.

Trevor Milton, Nikola’s 38-year-old founder, took Musk’s memo in stride.

Reuters reported Musk’s email to Tesla employees earlier Wednesday. The CEO confirmed its authenticity to his more than 35 million Twitter followers.

Gallery

Please peer review 3 community comments before your comment can be posted