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Class of 2012: Commerce Student's Analysis Moved the Market

May 15, 2012 — While other students were relaxing over spring break last year, University of Virginia student Tyler Matuella buried himself in research about Tesla, the upstart electric carmaker.

Spurred by his longstanding interest in cars and technology – which made Tesla particularly exciting – he put to work the business analysis skills he was learning as a then-third-year at the McIntire School of Commerce, throwing himself into more than 100 hours of research over his 10 days away from classes. "I was a huge nerd for those 10 days," he said.

He concluded that Tesla Motors was a likely takeover target for an established luxury automaker, as he explained in a 3,000-word article, "Why Electric Carmaker Tesla Motors Will Likely Be Acquired," which was published by Business Insider, an online business news source.

The thought never crossed his mind that his analysis, co-authored with fellow Commerce student Mannie Ajayi, might impact the stock of this multi-billion-dollar company, he said. But by the end of the day, more than 1,500 people had viewed the article, and Tesla's stock price had risen as much as 3.5 percent as investors contemplated a potential stock price bump from a future takeover. Bloomberg News reported on the surprising impact of the student-authored article, prompting a public response from Tesla CEO Elon Musk, who – as expected – downplayed the risk of Tesla being a takeover target. The next day a "story about the story" was picked up by a dozen more online news sources, including Automobile Magazine and Motor Trend.

The whole experience was "wild and also really humbling," he said.

"I'm a huge fan of Elon Musk, the company and the cars," Matuella said. While his analysis reviewed many Tesla successes, it also pointed out several substantial challenges facing the company, including the difficulties of profitable manufacturing on a relatively small scale (by car industry norms), the financial risks of a narrow product line based on new and unproven technology, and vulnerabilities to production disruptions and technical setbacks because the company has only one factory along with a nascent, minimal service and dealer network. Acquisition by a major automaker like Daimler would remedy those vulnerabilities, making Tesla a prime takeover target, Matuella argued.

"It was wild to think that after just six months in the Commerce School, using the thought framework they gave me in the classroom, I could apply it in the real world and do a reasonable and thoughtful-enough analysis that sophisticated investors would actually trade money on it," he said.

"The McIntire School has definitely taught me well how to think and how to research."

Matuella put his Commerce School training to use on two other financial analysis articles for Business Insider – one about the risks of general inflation and the other about the safety of investing in U.S. Treasuries. Both have proven to be accurate and prescient.

"Tyler invariably had an interesting, timely and thought-provoking take on each issue," McIntire School professor Robert Webb said.

His articles caught the attention of several prospective employers, including KippsDeSanto Investment Bank in Tyson's Corner, co-founded by 1989 McIntire School graduate Robert Kipps, who serves on the McIntire Advisory Board. Matuella turned down other investment banking and consulting job offers to take an analyst position at KippsDeSanto. He will focus on mergers and acquisitions in government services, cybersecurity, intelligence, aerospace, defense and technology industries.

Far from being one-dimensional, Matuella worked for four years for U.Va.'s Center for Politics. He helped manage the publication of two election analysis books edited by center director Larry Sabato, University Professor of politics. The job required Matuella to manage and coordinate chapter submissions by more than 30 professors and professional authors from across the country.

"A professor has a tough time getting students to meet a deadline," Sabato said. "Tyler had the chore of getting dozens of professors to meet deadlines, and he succeeded, twice. I'm convinced he's ready for just about anything now."

Matuella also worked alongside local business owners and nonprofit leaders to create the Community Investment Collaborative, a new microfinance loan fund in Charlottesville. While there, he established a for-credit internship program for U.Va. students starting this summer.

As a first- and second-year student, Matuella won funding from the Jefferson Public Citizens program to travel with a student team to Nicaragua to explore social enterprise solutions for clean water, health care and alternative energy. U.Va.'s Center for Undergraduate Excellence recognized his team's work with an award for creativity and innovation.

The Lawn resident and recipient of three merit-based scholarships will graduate from the Commerce School with concentrations in finance and accounting and a minor in foreign affairs from the College of Arts & Sciences.

– by Brevy Cannon

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