“Comparisons between Tesla Motors and Apple have long been bandied about by the press, Wall Street and some in Silicon Valley. Both focus on cutting-edge technology, place a premium on aesthetics and have done well in the higher end of their respective markets,” Chris Ciaccia reports for TheStreet. “Now, Tesla CEO Elon Musk is getting in on the act.”
“On the fourth-quarter earnings call, Musk noted that the company is ‘going to spend staggering amounts of money on CapEx.’ In the letter to shareholders, Musk noted that those ‘staggering’ capital expenditures would cost around $1.5 billion,” Ciaccia reports. “By justifying the huge increase in capital expenditures, Musk said that the company could potentially become like Apple when it comes to valuation.”
Ciaccia reports, “Musk commented: ‘If you take this year’s revenue, around $6 billion or thereabouts, and if we are able to maintain a 30% growth rate for 10 years, add to your 10% profitability number, and have a 20 P/E, our market cap would basically be the same as Apple’s is today. That’s going to require a bit of — on the order of $700 billion — obviously, getting there will requires some significant CapEx, but I am hopeful that we can do this without any significant dilution to the company, maybe minor dilution but nothing serious.'”
“Tesla is still production-constrained,” Ciaccia writes. “But comparisons to Apple, which recently surpassed $700 billion in market cap and is the most valuable public company in the world, may be a bit premature.”
Read more in the full article here.
MacDailyNews Take: Only $714 billion — or BMW+Toyota+GM+Volkswagen+Tata+Daimler+Ford+$100 billion — to go, Elon!