- If you have stakes in Tesla from the time it went public, it’s giving not less than 1190% return.
- I would never buy Tesla and I would never sell it short – Charles Munger – Vice President Berkshire Hathaway
If you think that Tesla is wooing the world with its cars (and ideas) you’re partially correct. Tesla’s biggest gift to the world has been going public in 2010.
Since then the stock value of Tesla has only grown. The J curve clearly tells about the carmaker’s performance. NASDAQ’s 10-year-old public limited company and its zero-emission battery-electric Model S, X and 3 cars are the centers of attraction.
Elon Musk talks about making 500,000 vehicles a year. Tesla finished 2019 with 367,500 output. With this growth rolling out 500,000 cars in 2020 seems to be a smooth ride for Elon Musk.
Model 3 now outsells every vehicle in the luxury entry category be it in Germany, Japan or in the US. When Tesla’s Cybertruck was put on the show last year in November, the company went home with 200,000 pre-orders in 3 days.
With this powerful performance, not only Tesla but its investors are also enjoying a smooth ride. The stock value of Tesla is worth 37% more than General Motors and twice the value of Ford ($37 billion).
Tesla gained 22% this year, more than 14% average for the 10 largest automakers. Over the past 2 years, Tesla is no.1 with 31% returns when its competitors lost 4%. Since 2017, Tesla is No.1 with a 99% return.
This is why the stock value of Tesla is one big reason why it is the decade’s best performing car maker company. Toyota having worth $230 billion and Volkswagen $98 billion among 38 automakers globally.
Nothing comes without controversies!
There are people who are not impressed by the stock value of Tesla. Greenlight Capital, the hedge fund led by David Einhorn comments that Tesla’s wheels are falling off and that he will continue his short selling because electric-car companies face a stream of unending losses. (Source).
On Thursday when Tesla announced it will sell 2.65 million new shares of stock, the share price jumped nearly 5%. After it announced the new stock will sell at $767 a share on Friday, the stock fell 2% in premarket trading.
Tesla earned $1.86 a share in Q3 exceeding the most optimizing forecast and the consensus estimate for a 24-cent loss. The stock value of Tesla is increasing only because it’s short selling a percentage of shares traded is down to 9.2%.
The short-selling ratio was as high as 30% in June. Higher as compared to any company in the S&P 500 index a year ago. During the last 6 months, Tesla appreciated 85% and it’s the best performer in the S&P 500 and No.1 among 38 other in the Bloomberg Intelligence Global Automobile Index.
Charles Munger vice president of Berkshire Hathaway said “I would never buy Tesla and I would never sell it short. Also, never underestimate the man who overestimates himself. I think Elon Musk is peculiar and he may overestimate himself, but he may not be wrong all the time.”
“He’s trying to do something to improve a product, and I salute him for that. It’s not easy to do that.” Warren Buffet – the man needs no introduction.
Anyone who purchased Tesla when it went public in 2010 has a bonanza of 1,190%. No automaker can match Tesla’s growth. After the stock value of Tesla increasing 10 times since 2014, the revenue of Tesla will advance an additional 14% in 2019.
“The same thing happened with Amazon for years” – Cathie Wood – CEO of Ark Investment Management and also a Tesla shareholder.
Ending Note:
No share can be profitable in short selling as well as in holding on to it. While short-sellers might not reap the best of it, but people who believe in Elon Musk and his vision through Tesla know very well about their worth and stock value of Tesla.
It will be an interesting watch but in the long-run. Some stocks are better to be invested in and forget for 5 years. Because when you reopen them, they always give you a reason to smile and dance at the same time.
