Is Tesla’s rise sustainable? Dell going public again, Facebook’s Instagram Gap

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Tesla has seen its shares shoot up to $361.22, a 5% increase or $18.27. This is after the company announced in the morning of 2nd July that it had achieved its goal of producing 5,000 units of its Model 3 sedan per week in the quarter. Tesla has produced 5,031 Model 3s in the final seven days of the quarter. Most people did not expect the total production of 53,339 to be achievable in the quarter. With claims that Tesla will have a positive GAAP in the third and fourth quarter of this year, the company says that it expects to make 6,000 units per week by the end of July.

On the morning of 2nd July, two harsh critics gave differing reactions saying that betting against Tesla is both stupid and insane. However, Rajvindra Gill raised a question that many are already asking; is the growth sustainable? In particular, he notes reports indicating that Panasonic could slow production rates due to constraints on the battery.

Dell going public
On July 2nd this year, conglomeration and tech giant Dell announced that in exchange for tracking stock shares of its ownership in VMware, its class v technologies, dell would trade its common shares. In the offer, $109 for a share has been offered to DVMT holders. Michael Dell, the company’s CEO and chairman, will continue to own a majority of the stocks in Dell. According to Dell, their board decided the stock swap was the best way in “simplifying the capital structure”. The exchange offer gives bulls like Shebly Seyrafi of FBN Securities relief as shares of VMware rose by 5.5% or $8.12 to $155.09. As Dell is the main shareholder in VMware, it gets paid a majority of the $12.6 billion cash to be paid to the shareholders. VMware is also going to pay a dividend of $11 billion in cash.

Facebook-Instagram gap
Facebook shares have risen 13 cents to $194.45. This is after Ken Sena of Wells Fargo increased his price target for the shares in the morning of July 2nd to $250 from $230. Sena notes that Instagram has a meaningful returns opportunity with Facebook’s 400 million users. Sena, however, writes that Instagram only “monetizes” at 25% of the rest of Instagram since stories make up only 6% of the total Instagram revenue. He continues saying that the ‘gap’ could close quickly based on his chats with agencies and advertisers.

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