Tesla CEO Elon Musk.
Topline: After last week’s volatile swings—in which Tesla shares were at one point up by 50%—the stock is on the move yet again, rising slightly on Monday even as some analysts on Wall Street warn that its wild speculative trading has led to stretched valuations.
- Tesla’s stock rose up to 7% in early trading on Monday, briefly surpassing the $800 per share level it hit last week before paring back gains: It is now up by just around 1.5% for the day, sitting near $760 per share.
- Much of that was thanks to positive news out of China: The Shanghai municipal government said last Friday that it would help companies dealing with coronavirus closures, like Tesla, to “resume production as soon as possible,” Reuters first reported.
- Tesla’s new gigafactory in Shanghai—its first in China, a potentially huge market for the electric-vehicle maker—has been temporarily closed in recent weeks amid the coronavirus outbreak, but is now scheduled to reopen on February 10.
- Part of Tesla’s stock moves on Monday were also tied to a report from Forbes contributor group Great Speculations, which analyzed how Tesla could be an attractive M&A target for Google parent Alphabet. In the analysis, the team argues that a hypothetical deal with Google could see Tesla’s value rise to $1.5 trillion.
- The stock’s wildly speculative trading looks set to continue this week, even after the stock surged by double digits on Monday and Tuesday, reaching a record high of almost $1,000 per share, before then plummeting almost 20% on Wednesday.
- Wall Street analysts on the whole have recently been more pessimistic about Tesla stock than they have ever been, according to CNBC. Nearly half of analysts give it a “sell” rating, while only 19% are bullish on the stock—an all-time low for buy recommendations.
Key background: Tesla stock soared early last week, rising by as much as 50% after double-digit gains on Monday and Tuesday. That was thanks to a lasting boost from reporting strong fourth quarter earnings last month, as well as several analysts at the time predicting further upside for the stock, which caused a short squeeze. The stock’s rapid surge caused short sellers to buy back shares and cut losses, which in turn spurred higher demand and drove the share price up. The stock crashed on Wednesday, however, amid concerns that the coronavirus would delay the company’s Model 3 deliveries in China and impact its first quarter earnings for 2020. What’s more, Wall Street analysts began warning that the stock had become a speculative bubble detached from reality. By last Friday, the stock was down 23% from its peak of $968.99 per share. Overall, shares rose about 15% last week, from around $650 to $750 per share.
Crucial statistic: Even after last week’s wild swings, Tesla shares are still up by around 78% so far in 2020. CEO Elon Musk’s net worth has risen to nearly $39 billion as of Monday, according to Forbes’ estimates.
Big numbers: More than $55 billion worth of Tesla stock changed hands last Tuesday alone—that’s more than any stock ever in a single day, according to Barron’s. Almost $170 billion worth of Tesla stock value was traded in total last week. Short sellers who bet against Tesla stock have now lost $8.4 billion since January, according to the Wall Street Journal.
Surprising fact: Droves of investors have been trying to understand why Tesla’s stock has been on a roller coaster ride recently, to the point where some have even compared it to Bitcoin’s parabolic rally in 2017. At one point last week, a Google search for the phrase “Should I,” prompted the top two results of “should I buy Tesla stock?” and “should I sell Tesla stock?”.
Further reading: Here’s Why Tesla Stock Just Surged Past A Record $900 Per Share
Tesla Shares Reverse Course, Falling Almost 20% As Coronavirus Delays Model 3 Deliveries
