Tesla’s Market Valuation Tops Fiat’s

Shares of Tesla Motors Inc. soared 24% on Thursday to close at $69.40. At that price, Tesla has a market capitalization of $8 billion, surpassing Fiat SpA's $7.8 billion valuation.

The Palo Alto, Calif.-based electric vehicle maker's stock soared after the company announced its first-ever profit $11 million for the January-March period of 2013, and its Model S electric sedan received a rave review from Consumer Reports.

Fiat's stock price has been battered by plunging vehicle sales in Italy and the rest of Europe. But thanks to the carmaker's 58.5% stake in Chrysler Group LLC, Fiat posted a $41 million profit in the first quarter. The companies sold a combined 1.02 million vehicles in that period.

Tesla's share price has more than doubled this year. Analysts tell Bloomberg News that surge is being driven by optimism about the company's future prospects not the fundamentals of its current business. Tesla sold 4,900 vehicles in the latest quarter and expects to sell 21,000 units this year.

The news service notes that short sales of Tesla stock equal 45% of the shares available to the public. Short-sellers borrow and sell a company's stock when they expect it to fall sharply, thus allowing them to buy back and return the borrowed shares at a lower price.