Two days ago when the Share price of Tesla Inc. was trading above $950, pushing Tesla’s market cap above $160 billion, most Tesla analysts were in shock and couldn’t give a reasonable answer to why the stock blew through all their price targets.
On Wednesday, Tesla market cap shed billions falling -17.18% over fears and worries that coronavirus outbreak will eventually delay the car deliveries in China.
Tesla Share closed at $734.70 at the end of the day, bring the market cap of the electric car maker below $160 billion to $132.426 billion. A solid achievement still, if you asked me. a valuation so massive that famous short-seller Andrew Left of Citron Research claimed that even Elon would go short at these levels if he was a fund manager.
Most skeptics compared Tesla price action to that of Bitcoin. in December 17 2017 the price Bitcoin hit All Time High, trading at $20,000. Yet still, Tesla’s short-sellers have already lost more than $8 billion in 2020 – with $2.5 billion lost on Monday alone. Therefore, shortening the business has traditionally been a very bad idea.
Tesla Vice President Tao Lin said Wednesday at the Chinese social media platform Weibo that deliveries expected from the company’s Shanghai plant in early February would be postponed. Tesla said last week that the coronavirus outbreak would delay production at its plant because the city authorities had extended the Lunar New Year’s holiday from 30 January to 9 February, forcing the plant to close down.
Is This The End Of The Rally?
Well, the question is left to you, dear readers :).
Should I Buy A Share Of Tesla, When Should I Buy Tesla Stock
Is it still safe to buy a share of Tesla?. That is the question most investors new to the Tesla story are asking at the moment.
Long Term Tesla investors are not selling at the moment, except for day traders and some investors that have a commitment to keep the percentage of their exposure to Tesla at a fixed level, let say 10% of portfolio max.
If you believe in the Tesla story and don’t mind holding on for another couple of years, let say 2024, when Tesla is expected to hit Homerun according to Ark Invest, and trade closer to $7000, then getting onboard now may be reasonable.