(Tesla factory located in Shanghai, China, https://thecargossip.com/2020/03/17/tesla-china-shares-giga-shanghai-safety-measures-against-covid-19-virus/)
Tesla, a company that has only been around since 2003. Tesla specializes in long-range car battery technology and only in 2008 did they release their first car. Since becoming a public company in 2010, their stock has been quite unpredictable. However, recently Tesla seems to be (mostly) on a one-way path upwards.
In 2010, Tesla’s initial stock price was just worth about $5. From 2010 to 2012, Tesla focused on the production of one of its first electric cars, the Roadster. However, Tesla scrapped the Roadster in order to concentrate their resources on the Model S Sedan, this would eventually be the pivot car that Tesla needed. Between 2015-2017, the Model X and Model 3 were released and all car had Tesla’s autopilot technology installed. Between the time of all those events from 2010-2017, Tesla’s stock spiked up to roughly $45 in 2014, but bounced between $40-$70 from 2014 and 2017. This left investors split on whether Tesla would ever break though.
(Tesla Model 3, https://th.bing.com/th/id/OIP.m762sJ-4SVGnaF0NqrFrEQHaE6?w=276&h=183&c=7&o=5&dpr=2.25&pid=1.7)
After several years, in 2019, Tesla finally caught a break. After investing in a $2 billion factory in Shanghai, improvements in efficiency of their technology, and more affordable cars, Tesla finally had their long awaited spike. From October 2019, to February 2020, Tesla’s stock jumped from $45 to $110. However, shortly after, due to the COVID-19 pandemic, Tesla dropped back down to $85 in March, still marginally higher than their price in 2019. During the market rebound after the initial shock wave in March, Tesla’s stock surged up to $441 by August 28th.
On August 31st, Tesla underwent a 5-1 stock split. This means, any shareholder in Tesla would receive 5 shares for every share they had at a proportional price. A company may do this to lower their stock price to make it accessible to a larger amount of smaller dollar investors. For example, before Tesla’s stock split, the price for 1 share was actually worth roughly $2000, however all the prices I have used for Tesla’s stock throughout the blog reflect the 5-1 split for consistency. After Tesla’s stock split, the company had mixed results.
Tesla’s stock initially surged after the stock split on August 31st by over 7%, however that proved to be short term as the next day it was down over 10% due to its non-inclusion in the S&P 500, one of the most popular stock indexes in the world. Investors were heavily banking on the inclusion as Tesla is the worlds 11th largest company in terms of market cap. Tesla eventually rebounded to where it stands today at $446 and investors consider it a matter a time before Tesla is added in the index and its stock will likely skyrocket again once it happens.
I think that the concept of stocks is so interesting, only because I feel that it is one of the only fields where fluxuation is normal. The fact that Tesla’s stock price was initially $5, and then sky rocketed to $2000 is quite insane. I believe that though Tesla rebounded to the $446, where it stands now, we have only seen the beginning of this company. I am glad to say that I will be able to see Tesla blossom in my lifetime.
This is another amazing analysis. The Tesla brand really is a revelation. It really emphasizes the progress that we have made in technological advancement. The functional caliber that those cars accentuate are literally unreal, so I wasn’t surprised when you mentioned that Tesla was the world’s 11th largest market cap company.
Do you know why the stock jumped from $85 to $441? That is such a huge jump! All of the other fluctuations seem to have perfectly aligned with the company’s actions and global events, but this drastic change that has “made” Tesla seems as though there isn’t as concrete of a reason. I also find the idea of the stock split very interesting. I didn’t know that was a thing before reading this. Your explanation made a lot of sense and allowed someone who doesn’t know a lot about the stock market (me) to be able to keep up.
I was a little confused reading this, because you talked about how Tesla’s stock has dropped since the pandemic started, yet I’ve seen multiple posts on social media slamming Elon Musk for cutting his employees pay while Tesla’s stock skyrocketed. Is there any basis for this claim or was I just reading false information? Either way I read that Tesla employees are also given a shares of Tesla stock as part of their salary, which I thought was a really good idea and wondered why more businesses didn’t implement the same practices.