Triumphant Tesla joins Nasdaq 100 index

Tesla trumpeted a trio of triumphs in the past few days, and its stock has settled into a steady uphill march. Last week, an announcement of several hundred Model S orders in Hong Kong gave Tesla shares a big boost. The company has forecast sales of 21,000 units this year, with deliveries to Europe and Asia beginning in the second half.

The big news, however, is that Tesla has been chosen as a member of the Nasdaq 100 Index, replacing Oracle (ORCL), which is moving to the NYSE. TSLA crept to a new all-time high of over $123 on the news, which represents a gain of about 264 percent for the year.

As Bloomberg explained, becoming a member of the benchmark index is a great boon for a public company, because it provides a guaranteed shareholder base. “It’s a coming of age, recognition that a company has market cap and liquidity,” said Sandy Mehta of Value Investment Principals Ltd. “Once the stock joins the index, you will have some buying.”

Meanwhile, Tesla won a symbolic victory in its ongoing war with the large auto dealers’ associations. A White House petition to allow Tesla Motors to sell directly to consumers in all 50 states got 111,985 signatures, far more than the 100,000 threshold for the administration to review it.

Earning 100,000 fans only guarantees that the Obama administration will “review” the petition, not that they will do anything about it. Indeed, it’s not clear that the federal government has the authority to overrule the state legislatures in this matter. However, we predict that it’s only a matter of time before you’ll be able to pick out a new Model S as a wedding present for a couple of any persuasion, in any state in the Union.

 

Source: Bloomberg, Businessweek