What Is Going On With Tesla’s Stock?

Tesla  is more or less still a startup in the auto industry, with all the associated risks. Tesla’s stock price is also very volatile. It dropped off precipitously toward market close Tuesday after rising to about $955. The electric car company’s current stock price gives it a market capitalization a rough proxy for what you could sell the company for $160 billion, making it now in league with the value of Salesforce, McDonald’s, Citigroup, and Netflix. That is also approximately equivalent to the GDP of Algeria.

  • A very big short squeeze

Tesla is one of the favorite stock for short-sellers, investors who are making money by betting the stock price is going to go down. Indeed, it’s the most-shorted US equity. They are forced to close out their position and buy the stock to stop further losses. This is added demand from Tesla’s short sellers caused what is called a short squeeze, which drives the price of the stock even higher.

  • A very good earnings report

Tesla’s fourth-quarter earnings report last week beat analysts’ earnings expectations. Its forward-looking estimates were sunny, too, with the electric car company promising to grow sales by a third this year. A month earlier, the company had announced record vehicle sales and deliveries, which had been a continual worry for shareholders who questioned whether the company could meet its lofty production goals.

  • A pleasant surprise with Model Y

NASDAQ: TSLA (Tesla Stock Quote, Chart, News NASDAQ: TSLA at https://www.webull.com/quote/nasdaq-tsla)company is announced last month that it’s going to deliver its crossover SUV, the Model Y, months ahead of schedule. Originally slated for fall 2020, Tesla expects the highly anticipated Model Y to ship next month.

  • A very good TV spot

On Tuesday, major Tesla investor Ron Baron went on TV to say he thought the company could reach $1 trillion in revenue in 10 years. Tesla’s 2019 revenue was $24 billion. Baron, whose investment firm already holds almost 1.63 million Tesla shares, said in the interview that if it were up to him, he’d buy even more.

  • Mainstream popularity attracts inexperienced investors

That is the level of widespread popularity for investment causes serious demand. It is also a serious warning sign that things are getting too heated. CNBC reported that lots of new investors are buying Tesla stock at its now very high price by options trading, with 12,000 accounts on consumer stock trading appbuying it for the first time yesterday. It is currently the fastest-growing stock holding on the site.