In August 2018, Tesla's share plummeted terribly after a rather dubious tweet from top executive Elon Musk. The eccentric billionaire said on the social media channel that there was financial support to get Tesla off the stock market. This caused quite a bit of unrest among shareholders and therefore a plummeted share price. The fact that the news turned out to be not true at all did not immediately lead to improvement. It took more than a year before that changed again, partly because the company did not perform so well financially. But in the meantime the share has increased enormously in value in the last months of 2019. What has happened that Tesla is suddenly worth more than General Motors and Ford?
The peaks and valleys of Tesla
The cars that Tesla produces so far are incredibly popular. So popular that demand cannot be met. Many have ordered an electric car but have been waiting for delivery for months. Especially the affordable Model 3 is not dragged on. That there is so much demand for it is good for a company, but the fact that it causes supply problems makes it less good. The fact that a factory is now being built in China, the construction of which seems to be on schedule, is doing something for confidence. Also, since the tweet in question, Elon Musk, the man behind Tesla, has kept himself a bit more quiet and made less striking statements. done. Shareholders simply do not like unguided projectiles who lead such a company. And certainly not if they start selling this kind of nonsense out of the blue. Confidence was badly damaged, but seems to be restored. And then there was the introduction of the indestructible pick-up truck, also known under the (working) name Cybertruck. The futuristic-looking car, which could have come out of a movie like Mad Max, was introduced with a lot of bombing on November 21. This would be the safe car of the future. The motto was indestructible. We could all see that the prototype was not live. The intention was for an employee to throw an iron ball against the windows to prove that the truck is indestructible. Unfortunately this failed, and the ball yielded a big star in the window. A second attempt at a different window produced the same result.
The price trend of Tesla shares
The fact that the launch of the Cybertruck was not entirely satisfactory resulted in a fall of approximately 6% in 24 hours. But this recovered quickly, probably mainly because of the news that, despite the defects, as many as 250,000 people placed a pre-order within 2 days. For this they make a down payment of $ 100 per person, which means that Tesla again generates $ 25 million! The biggest recovery of Tesla's shares started in October 2019. This was after the quarterly results were announced. Against all odds, these were positive. Positive results are also expected for the fourth quarter, and the market is responding. In just three months, the Tesla share achieved an increase of no less than 60%. There are very few shares that they imitate! The share was at its lowest (in 2019 then) on 3 June. At that time, the Tesla share was “only” worth $ 178.97. At the start of the year, the same stock fluctuated around $ 300, so it made a nice move down. Slowly Tesla climbed out of that valley again, to record $ 255.58 on October 22. It is now almost Christmas and we note a rate of $ 419.22 on December 24.The share price of Tesla has risen mainly since October. Before that, the share was worth less than half.
Buy Tesla Shares, or not?
Now that the stock is on the rise, it may be tempting to invest in it. But is that wise? Let's look at what the experts say about it. The IBD check-up gives Tesla a rating of 79, the maximum is 99. It means that Tesla outperforms 79% of the shares (all shares!). The relative strength of the share is estimated at 97 out of 99. This is a representation of how the share has performed in the past 52 weeks (a calendar year) relative to other shares. The EPS rating is low at 25, ie the annual and quarterly earnings per share are less than that of many other shares. In the IBD car manufacturer rating Tesla is at 4. Only Ferrari, Toyota Motors and Fiat Chrysler score higher. In other words, the ratings betray a strong share, but with a low dividend. The rate keeps on rising, but the question is: how long. That is something that nobody can predict, and will also be (partly) dependent on the figures for the last quarter of 2019. These will probably be announced in mid-January. If the expected growth is achieved, it looks good for the company and the Tesla share. If that growth is not achieved, and the company does not come up with green (or black) figures, it could well be over with the growth quickly. Specify a decrease or increase in the Tesla share at Plus 500!
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High (production) costs
In addition, Tesla has high costs because they have the entire process in their own hands. Higher than a traditional car manufacturer, which purchases parts or parts of it. Research and development, in particular, have high costs that do not immediately pay for themselves. Because of the high costs, and therefore the chance that they fall into the red when there are lesser sales or production problems, the share is not very certain. There is little margin within the company, so little certainty. This can certainly change, but for the time being it is primarily a risky investment, according to experts. Buying or not? As we always say: it's up to you. But be wise and only invest with money that you can miss. Totally in a share like Tesla that is now at an enormous height!