The stock is up 106% so far in 2020 alone.
(Updated: 5:30 p.m. EST, Feb. 4, 2020)
Topline: Tesla continues to skyrocket, surging to a new record intraday high of $961 per share on Tuesday thanks to a fourth quarter earnings report last week that topped expectations and a host of Wall Street analysts recently predicting further upside for the stock.
- Tesla stock kept up its recent momentum and rose nearly 20% to a new record high on Monday—gaining over $100 and finishing at $780 per share.
- On Tuesday, the stock kept going: Tesla rose up to 23%—to a new high of around $960 per share, before paring back gains somewhat and ending the day at $887 per share.
- The recent surge in price comes after Argus Research on Monday raised its price target for Tesla from $556 to $808—among the highest on Wall Street, citing the company’s strong fourth quarter results and rising vehicle sales.
- Another boost came from ARK Investment Management recently updating its valuation model to reflect Tesla’s massive upside potential: The firm believes that the stock could be worth $7,000 per share—and up to $15,000 in the best case—by 2024.
- Tesla handily beat earnings last week, reporting its second consecutive quarter of profitability and promising investors that it should continue to be profitable going forward (it is yet to be so on an annual basis).
- Tesla, which impressed Wall Street with rising deliveries and a China factory that came online faster than expected, vowed to increase its global vehicle sales by more than a third in 2020—to “comfortably exceed” half a million units, up from 367,000 last year.
- Tesla’s shares have steadily risen and moved ever-higher in recent months, as the company works to transform itself from a niche manufacturer into a mass-market electric-vehicle producer. The stock has gained nearly 170% over the last six months alone, far outperforming the benchmark indexes.
Crucial quote: “Despite past production delays, parts shortages, labor cost overruns and other difficulties, we expect Tesla to benefit from its dominant position in the electric vehicle industry and to improve performance in 2020 and beyond,” Argus Research said in its note on Monday.
Big numbers: Investors who bet against Tesla’s stock have been losing droves of money since the beginning of the year—including $2.5 billion on Monday alone. Tesla has more short sellers than any other U.S. stock—18% of its publicly available shares are sold short, according to data from market analytics firm S3 Partners. Short sellers usually borrow shares from a bank and then sell them with the hopes that the stock will go down so they can profit on the difference. But with Tesla, the stock price has steadily trended higher in 2020, forcing short sellers to take losses when buying back shares at a higher price. If too many short sellers buy the stock in tandem, as is the case with Tesla, that can in fact create higher demand and drive share prices even higher, known as a “short squeeze.” Including the $2.5 billion lost by Tesla short sellers on Monday, investors who bet against the electric-vehicle maker are down a total of $8.3 billion so far this year, according to S3.
Tangent: CEO Elon Musk is the company’s biggest shareholder and Monday’s share price gain pushed his net worth to $39.3 billion, Forbes estimates.
Key background: Tesla struggled through the first half of 2019, amid doubts over consumer demand and whether or not the company could achieve profitability. But the stock bounced back in the second half of the year, hitting a bevy of new all-time high share prices and reporting profits in both the third and fourth quarters. Earlier this year, Tesla became the first U.S. automaker to hit a $100 billion market cap. That’s now grown to $140.5 billion—almost twice the combined size of rival automakers General Motors ($48 billion) and Ford ($36 billion). Only Toyota has a higher market cap at this point.
What to watch for: Whether the fast-spreading coronavirus, which has now infected more than 17,000 people and killed at least 361, adversely impacts Tesla’s supply chain and production capabilities. With the company having just built a new gigafactory in Shanghai—its first in China, Tesla said during its earnings call last week that the virus could negatively impact upcoming first-quarter results for 2020.
Further reading: It’s Okay To Completely Ignore Tesla’s Insane Stock Surge (Antoine Gara)
