Polypore, Rockwood Shares Gain Amid Speculation On Tesla Gigafactory

Traders and investors are speculating Thursday about the possible beneficiaries from Tesla's

gigafactory development project. Last night the maker of electric vehicles announced that it

for developing the company's gigafactory and Gen III vehicles. Wedbush analyst Craig Irwin noted Polypore

could see an “attractive” future royalty stream from the Tesla gigafactory. This is based on royalties received by Polypore from Sumitomo for use of certain lithium-ion separators. Sumitomo is a supplier to Panasonic for separators used to assemble cells for the Model S. In the fourth quarter, Polypore received $3.5 million in royalty payments from Sumitomo. Aleksey Yefremov, analyst at Bank of America, believes supplier Rockwood Holdings

is “best positioned” among global lithium producers for Tesla's gigafactory. Rockwood would be a direct seller of lithium to supply the new Tesla factory. Yefremov estimates that the gigafactory may consume 9k tons of lithium, translating into a $0.25-$0.30 earnings per share opportunity for Rockwood. Shares of Polypore are trading up nearly 2 percent to around $32.70; Rockwood shares are up about 3 percent to $80.67 at last check.