It is just not true that Tesla is worth more than GM in the common understanding of that. The real answer to "Why Tesla is Worth More Than GM" is one sentence: GM has more debt than Tesla.
People understand (and the article gives reasons why) "worth more than" to be that the GM brands + factories + assets + future prospects are worth less than Tesla brands + Tesla factories + Tesla assets + Tesla future prospects. But this is not true in actuality. This is because Tesla is worth more than GM based on Market Capitalization, not Enterprise Value. The difference between these companies is that GM has $51B in net debt while Tesla has $2.6b.
If GM wanted to be "worth more than Tesla" (using market cap), they could do it tomorrow by issuing $51B in new stock and paying off their debt. Why doesn't GM do this? Because they actually believe their stock is undervalued, and would rather buy their own stock than sell it.
Debt (leverage) is different across different companies. If you aren't familiar with how different debt levels affect the market cap, the following pages are worth a read:
People understand (and the article gives reasons why) "worth more than" to be that the GM brands + factories + assets + future prospects are worth less than Tesla brands + Tesla factories + Tesla assets + Tesla future prospects. But this is not true in actuality. This is because Tesla is worth more than GM based on Market Capitalization, not Enterprise Value. The difference between these companies is that GM has $51B in net debt while Tesla has $2.6b.
If GM wanted to be "worth more than Tesla" (using market cap), they could do it tomorrow by issuing $51B in new stock and paying off their debt. Why doesn't GM do this? Because they actually believe their stock is undervalued, and would rather buy their own stock than sell it.
Debt (leverage) is different across different companies. If you aren't familiar with how different debt levels affect the market cap, the following pages are worth a read:
https://medium.com/@ruzbehb/tesla-is-not-valued-at-more-than...
http://www.investopedia.com/exam-guide/cfa-level-1/corporate...
http://www.investopedia.com/terms/l/leverage.asp