Have you looked at the stock prices of Apple and Tesla since the announcement of the Stock Split?
The stock prices of both these companies have been unstoppable for the past couple of weeks since the split announcement. Apple’s at $498 per stock and Tesla is at $2050 (both prices in USD).
Will this trend ever stop post the split or even before that?
Is the stock price of Tesla (TSLA) really justified for the big gains? Let’s begin.
Tesla Stock Overview
First of all, Tesla is one of the best technology companies in the world. The vehicles they produce are some of the best in the industry with highest customer satisfaction rating.
Tesla stock price since the stock split is announced (1-month chart):
Tesla stock price for the past 1 year:
Tesla stock price since its inception:
Quarterly Financials of Tesla (Most recent):
What Are the factors driving up the Tesla Stock?
In layman terms, below are the factors I believe are driving up the Tesla Stock prices:
Possibility of Inclusion in the S&P 500 Index. Remember, Tesla right now is not even part of the S&P 400 Index and adding it to the 500 Index straight will be huge news and Index fund houses will be given a couple of days time to buy the stock to its portfolios (in dollars terms millions of Tesla stock will have to be bought by the fund houses from the open market). With the most recent quarterly report, Tesla reported 4 consecutive quarterly profits which is one of the base criteria for the S&P 500 Index inclusion. Other than the profits, Tesla meets every other criteria to be added to the S&P 500 Index.
Elon Musk, the genius and the man behind Tesla is extremely innovative and always delivers what he says and promises. Tesla is miles ahead in terms of its competition. If you haven’t yet watched Cathie Woods, from ARK Investments talk about Tesla, please do so. BTW, ARK investments are one the best fund houses with massive portfolio returns.
Next up, its the Tesla stock split news itself, 5-for-1 stock split. If you hold 1 stock of TSLA today or before August 31st, you’ll end up getting 4 free shares on August 31st, 2020. This is driving up the stock price, almost 50% gains since the announcement of the split.
The future of cars/automobiles is EV and Tesla is already in China and delivering cars. As you might know, Tesla has the Giga Factory in Shanghai, China and is already delivering the Model S cars. Production of Model Y should start early next year. Remember, China has hundreds of EV companies, but they are the cheap ones and can’t be compared to Tesla and technology inside. This year alone Tesla plans to deliver 500,000 vehicles around the globe with 2 million expected the next year.
The massive potential of Tesla SOLAR panels in the future
Tesla Cybertruck release this year
Tesla Battery Day – Million-mile battery announcement (September 21st, 2020)
Tesla Autopilot – This is huge. Tesla eventually plans to phase out vehicle deliveries and make profits of $30,000 per vehicle through a Robo-taxi network.
Tesla Giga Factories in Germany, US (Texas), the US (new plant identified)
Tesla Super Computer
Now, that was a huge list. I know. But that’s why Tesla stock is surging so much. People just love the company and what Elon Musk. Do you remember the SpaceX launch? He is not afraid to fail and deliver.
My Personal View On the Tesla Stock? Should You Buy?
First of all, I do own the Tesla stock as of today and I am not planning to sell it anytime soon. Not until at least 2030. I believe in Elon and the company.
I will ride along with Tesla. It’s one of the few innovative companies in the world at this scale, valuation (9th biggest company in the US) and it’s trying to make something good for the world through EV’s and Solar.
You never know what Elon thinks, he is a go-getter. Just watch any of the Tesla presentations or wait for the batter day on the 22nd, September. He’s a charmer and an extremely hard worker to achieve his dreams. The company is finally delivering huge numbers with profitability. I believe it’s just the beginning.
I am not here to recommend anything to anyone, it’s just that I am laying down my points and why I believe Tesla is the future of the world. Get in early if you wish and make good returns. As Cathie Wood says. she expects Tesla to be at $7000 per share and %15,000 a piece in the next 7 years (bull case). Only time can answer this question.
As I said, Tesla is one of the best tech innovation companies in the world. There is no second thought to it. While innovation at Apple and Google is fading way, this company always promises to surprise everyone with what they do.
Elon Musk, I believe is just getting started. He has miles to go with this company. BTW, SpaceX is not part of Tesla and the valuations.
I’m a super proud stockholder of Tesla and I believe in the long term of the company. Thanks for reading, let me know your thoughts and comments below.
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Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.