Tesla Motors Inc.
) sued machinery maker Atlas Technologies Inc. regarding an
arbitration agreement. In a July 16 filing with Delaware Chancery
Court, the electric carmaker revealed that Atlas executives are
refusing to honor an agreement to "arbitrate a contractual
GENERAL MOTORS (GM): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
NISSAN ADR (NSANY): Get Free Report
TESLA MOTORS (TSLA): Free Stock Analysis
To read this article on Zacks.com click here.
Atlas Technologies is a unit of Productivity Technologies Corp.
and is based in Fenton, Mich. It manufactures equipment used in
the car-production process
TSLA more than tripled this year. The stock recorded an all-time
high of $133.26 on Jul 15, the day it debuted in NASDAQ-100, but
started falling, witnessing its biggest one-day drop of 14.3% to
$109.05 on Jul 16 since Jan 2012 due to a bearish report by
) on the stock. However, the stock started escalating again,
rising 9.7% last Friday since Jul 16.
The turnaround gain of TSLA was attributable to optimism raised
by some brokerage firms about the automotive industry in the U.S.
as well as about the company being a leading electric vehicle
maker. Moreover, Fed chairman Ben Bernanke's recent announcement
of continuing with the stimulus policies raised optimism among
Tesla Motors CEO, CTO and co-founder Elon Musk, who is also the
co-founder of electronic payments system PayPal and CEO of rocket
ships and spacecraft builder company SpaceX, surprised investors
in its tweeter comments on Jul 15 by revealing its dream of
building a hyperloop rapid transit system in the future. Musk has
been talking about this "fifth mode of transportation" alongside
trains, planes, cars and boats for almost a year.
Tesla Motors, named after the renowned physicist and inventor
Nikola Tesla, posted its first-ever quarterly profit of $15.4
million, or 12 cents per share, on an adjusted basis, in the
first quarter of 2013. This indicated a whopping positive
earnings surprise of 271.4% given the Zacks Consensus Estimate of
a loss of 7 cents for the quarter.
Revenues jumped manifold to $561.8 million from $30.2 million in
the first quarter of 2012. Thanks to the impressive 5,000 units
of Model S electric car sales during the quarter.
In May, TSLA also paid off the remaining $465 million U.S.
Department of Energy (DOE) loan much earlier than expected. The
electric carmaker received the loan in Jan 2010 and agreed on a
10-year repayment program. However, the company repaid the full
outstanding amount of the loan in the second installment itself.
Electric cars have always been criticized for limited driving
range leading to their weak demand. This led to limited sales of
vehicles such as
) Leaf and
) Volt. However, Tesla's innovative ideas about making electric
cars much more affordable and driver-friendly give it a
competitive edge over rival automakers.
The revelations of Tesla's innovative ideas and mounting stock
price pose a threat to prominent automaker such as General
Motors. Recently, the Detroit automaker revealed that it has
assigned a team to study the challenges faced from the
California-based automaker in electric vehicle technology.
Tesla's success spotted the failures of a big automaker like GM
in advancement of electric car technology.
Currently, shares of Tesla retain a Zacks Rank #1, which implies
a short-term (one to three months) rating of Strong Buy.