Oct 14 (Reuters) - People worry that electric cars might not have enough power to ferry them to their destinations. That’s a risk with Tesla Motors, too, according to the Heard on the Street column in the Wall Street Journal.
While Tesla’s new Model S sedan is winning all sorts of praise, the Journal says, that doesn’t necessarily translate into a winning investment.
The problem, according to the Journal, is that Tesla’s steroid-like rise, up 63 percent since its June 2010 initial public offering, values the company at 118.3 times earnings-a valuation more befitting a company in tech, not autos.
And, the Journal adds, despite its celebrity cachet, Tesla still faces daunting competition from other auto makers who are also developing alternative-fuel vehicles.
Shares of Tesla closed trading down 2.1 percent on Friday at $27,65, with shares trading below their 50 -day moving average and well below the $32.54 close of September 17.
Tesla Motors Inc TSLA.O Chief Executive Elon Musk, on October 4, dismissed fears the electric carmaker was in financial trouble and said it was making an advance payment on the federal loan used to make its Model S sedan.
Tesla,in late September cut its full-year revenue forecast due to a slower-than-expected rollout of the Model S and said it was raising another $150 million through a share offering.