Volkswagen CEO tweets, Musk-style, on market-cap milestone

Volkswagen CEO tweets, Musk-style, on market-cap milestone

LONDON/FRANKFURT — When the sector benefit of Germany’s Volkswagen briefly rose previously mentioned the 100-billion-euro mark on Wednesday for the initial time since 2015, the boss of the normally staid carmaker took to Twitter, Elon Musk-style, to crow about it.

VW shares soared as a great deal as 6% soon after expenditure bank UBS lifted its price tag goal on the stock by 50% and mentioned the company’s new electrical car system was set to problem Tesla’s dominance in the battery electric powered auto (BEV) market place.

Herbert Diess, main executive of VW Team, highlighted the UBS be aware on Twitter and shared the market capitalisation milestone.

“The marketplace has been waiting around for our #BEV-ramp-up and desired to see some evidence details,” Diess posted.

Traders reacted with comparisons to Tesla main Elon Musk who regularly employs Twitter to communicate up products created by his businesses, cryptocurrencies or other buzzing technologies.

The comparison, at the very least for now, ought to close there.

Diess sent his to start with tweet utilizing the “@Herbert_Diess” cope with considerably less than two months back and has considering the fact that tweeted 51 situations. Although he has managed to amass pretty much 25,000 followers in this time, Musk can boast of 48.3 million.

“The sheer fact that he begun his individual account apart from the formal VW account tells me, that between the traces he desires to categorical: We are below,” a Germany-primarily based trader mentioned.

Though unrelated and far more a marketplace-relocating tweet, one more trader highlighted scenarios of a probe by the U.S. Securities and Exchange Commision on Musk’s tweet in 2018 that he was thinking of using Tesla private at $420 a share.


But even with current share value gains — up 20% this calendar year — VW’s current market capitalization is just a person-sixth that of Tesla. Shares trade 7.5 moments 12-thirty day period ahead earnings probably its function in the EV transition is not fully priced.

Tesla meanwhile trades at 160 moments 12-month ahead earnings, degrees numerous think about bubble-like.

On the market capitalization hole, UBS stated VW’s only can take into account its EV company out to 2025, and won’t price its cash movement-abundant legacy enterprise, indicating there is home for the share selling price to increase.

It included that VW would very likely “grasp” the transition to shut the quantity gap with Tesla in 2022.

Volkswagen CEO tweets, Musk-style, on market-cap milestone

At 300 euros, UBS has the most bullish selling price target on VW. Analysts’ median cost target on its shares was 191 euros, in accordance to Refinitiv knowledge.

Preferred shares, which are stated in Germany’s benchmark DAX index, hit January 2018 highs on Wednesday, even though standard shares rose as a lot as 5.6% to their best considering that July 2015, two months in advance of the diesel scandal broke.

VW closed 4.7% larger at 185.18 euros for each share on the day, having its sector value to 99 billion euros.

Tesla vs VW

(Reporting by Thyagaraju Adinarayan in London and Christoph Seitz in Frankfurt Editing by Sujata Rao and Jonathan Oatis)

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