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Tesla Motors Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Tesla Motors (Nasdaq: TSLA  ) popped 18% in intraday trading today after an analyst upgraded the stock.

So what: Morgan Stanley upgraded Tesla to "overweight" with a $70 price target, more than three times yesterday's closing price of $23.71. The analyst believes rising oil prices and increasing government support will create greater-than-forecasted demand for electric vehicles.

Now what: Morgan Stanley, which helped take Tesla public in June 2010, said the company has the "opportunity" to establish itself as the fourth largest automaker in America, with the biggest risk being execution of its plan. It is not clear whether Tesla will ever turn a profit, or even survive. The stock seems pricey for the "opportunity" to become a major auto player -- or another DeLorean Motor Co.

Interested in more info on Tesla? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 31, 2011, at 1:57 PM, tgauchat wrote:

    Total BS analyst. Gotta love it.

  • Report this Comment On April 01, 2011, at 8:00 AM, CaddyKen wrote:

    so let me get this straight-

    Morgan Stanley, the company that put them on the market with an IPO is now the company pumping their stock.

    yup. got it.

  • Report this Comment On April 02, 2011, at 7:02 PM, maiday2000 wrote:

    If you are counting on rising government support for a $100,000 car in this environment and this congress, you must be on some serious drugs.

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