For the year 2020, Tesla stock is up more than 300%.
If you are like other thousands of investors that are wondering why Tesla is rising exponentially for months, today is your lucky day as we will be diving deep into this insane rally and try to shed light into why the stock is up over 300% year-to-date.
At a market cap of over $300 billion, making it the 10th largest U.S. stock by market value according to FactSet, it’s no surprise that CEO Elon Musk is arguably the most talk about celebrity-ceo in town.
Last week Friday, after the Shares of the electric car-making giant closed for the first time ever at $1546, beating search giant Google in terms of closing price, CEO Elon Musk zoomed past Warren Buffett on the Bloomberg Billionaires Index to become the world’s seventh wealthiest person. Musk’s fortune rose more than $6 billion Friday, according to Bloomberg, after Tesla’s stock surged 10.8% to a record $1,544 per share. Its market value stood at $286.5 billion.
Tesla shares is up over 50% this month alone after the electric vehicle maker smashed delivery estimates in the second quarter, delivering about 90,650 vehicles.
On opening today, Tesla’ stock gaped up to open at $1,659.00, shocking both bulls and bears, and sending short sellers deeper under the water.
Tesla short sellers lose more than $1.5 billion in one day as Tesla stock skyrockets on earnings back in January 2020. Investors betting against Elon Musk’s electric-auto maker Tesla collectively lost more than $1.5 billion on Thursday, January 30th 2020 after its solid earnings. Those numbers are now like a joke next to the over $20 billion that short sellers are now down with.
Last week Thursday, CNBC reported that Tesla short sellers were down $18 billion this year, including another $4 billion in July, we believe short sellers are now down over $6 billion for the month of July at the moment.
According to S3 Partners director Ihor Dusaniwsky: “The reason behind Tesla’s short squeeze is obvious and straight forward, large mark-to-market losses are forcing out some short sellers as they hit their loss limit thresholds,” Dusaniwsky wrote. “If Tesla’s stock price continues to trend upward, we expect even more short covering as mark-to-market losses accumulate.”.
Why Is Tesla Stock Price Skyrocketing All Of A Sudden?
Tesla’ stock was consolidating for over 5 years, within 2013 – 2019, before the massive rally began. The chart below shows the price action of Tesla stock price before and after the massive rally began.
In February 2020, Ark Invest CEO Catherine Wood told CNBC that she stands by her latest five-year price target of $7,000 per share for Tesla.
“Our confidence level that this stock is heading for $7,000 over the next five years is very high,” Wood, the founder and CEO of Ark Investment Management, said on “Fast Money.”
“We’ve arrived at that price by weighting the probabilities of 10 different scenarios, including bankruptcy, to be honest. So we’ve tried to be as fair and balanced as we could possibly be,” added Wood, whose firm has about $11 billion in assets under management.
“The electric vehicle is going to drop below the price of a gas-powered vehicle, like-for-like, within the next 18 months to two years, and then will continue to fall,” Wood said in an interview on Barron’s Market Brief. “So, it’s going to be a no-brainer. Electric cars are going to be cheaper and they’re better cars, they’re better calls.” She added.
Tesla Suspends And Resumes Production
In March 20, 2020, Tesla’s shares went down 8% in after-hours trading following the decision to suspend production at the Fremont, California plant, when local authority instructed people to stay at home in a bid to stop the spread of the coronavirus.
That announcement was made just as Tesla was ramping up production of its Model Y sport utility vehicle at the factory.
It took Tesla CEO over 5 weeks to fight back and force local authority to allow his employees to get back to the factory and continue the Model Y ramping.
Tesla Fan Base
Elon Musk is the only CEO that response directly to customers using twitter. Anybody can contact the billionaire CEO on twitter and luckily get a response. This amazing selfless acts has helped Elon Musk build a massive super loyal fan base, Frunkla.com included.
Tesla fans have created massive educational contents on Youtube and reached out to millions of people using personal blogs, websites, word-of-mouth, social media, among others, which directly and indirectly is helping Tesla mission to accelerate the world’s transition to sustainable energy.
You can never find as many loyal super fans elsewhere as you would find in the Tesla fans community.
Just 3 weeks ago, Youtuber “Solving The Money Problem” bought a 1000 pieces of Tesla Shares when the share price was $1000. He made a video about it and titled it “All In On Tesla Stock — My $1M Stock Portfolio Revealed“.
Another popular Tesla super fan that has built a business around Tesla is known as Vincent, founder of Tesmanian.
Tesla, Inc!. Q2 2020 Financial Results and Q&A Webcast
Set to take place on Jul 22, 2020, 2:30 PM PDT. This is literally the most important date in 2020, apart from Tesla Battery Day.
This is the day that is most likely to continue or break the insane parabolic price rally that started last year, with no end in sight.
“Tesla will post its financial results for the second quarter of 2020 after market close on Wednesday, July 22, 2020. At that time, Tesla will issue a brief advisory containing a link to the Q2 2020 update, which will be available on Tesla’s Investor Relations website. Tesla management will hold a live question and answer webcast that day at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time) to discuss the Company’s financial and business results and outlook.“ – Teslatesla.com
As of June 30th, analysts expected Tesla to report a GAAP loss of $1.82/share and a non-GAAP loss of $1.16/share according to estimates compiled by FactSet. There is a higher chance of Tesla beating expectations again which leads us to the end of this amazing educative blog post,…..
The S&P500 Inclusion.
Tesla jumps over 13% today, following the s&p 500 inclusion speculation. As the company’s market cap. climbs ever higher, speculation is growing that Tesla will soon join the S&P 500.
Standard and Poor:
The S&P 500 is a stock market index that tracks the stocks of 500 large-cap U.S. companies. It represents the stock market’s performance by reporting the risks and returns of the biggest companies
According to Reuters, in a Friday article discussing Tesla’s index inclusion, Tesla could rise 60% if included in the s&p 500. The article pointed to what happened to Yahoo’s stock after it was included in the S&P 500 back in 1999, saying that shares of Yahoo! jumped “64% in five sessions between the announcement …and its actual entry.” Reuters also wrote that analysts predict high demand for shares upon Tesla’s entry.
“If Telsa was to “pull a Yahoo,” the stock could hit $2,200 and give the company a market value of more than $400 billion. That math is fun with numbers, but bullish Tesla investors can hope.” – Barrons
Please share your opinion with us in the comment section. Weather the psychological resistance of $2,200, according to Barrons, will stop this mad bull run or not.