Tuesday, May 16, 2017

Who Gets A+ For Leadership: Tesla Or GM?

On April 10, 2017, the market capitalization of Tesla, a 14-year old company, surpassed that of 109 year-old General Motors. That day, Tesla’s market capitalization (total shares in the market times the closing price of one share of stock) totaled $50.84 billion versus GM’s $50.79 billion.

Pundits asked: How could Tesla, a company that has never earned a profit be worth more than GM? Even in the first quarter of 2017, Tesla reported earnings per share (EPS) substantially below market expectations. In contrast, GM’s EPS was up 37% — the highest quarterly earnings ever reported. Why is Tesla valued more than GM? And what does leadership have to do with stock prices?

May 16, 2017 at 10:44PM

from Editor