Is Nikola Tesla overrated

Scion's shortseller Mike Burry bets 500 million against Tesla

This post shows the price development of the Tesla share and provides information on relevant news about the technology company.

The Tesla stock is a phenomenon. Ten years ago, in June 2010, the California-based auto, IT and energy company launched on the stock market. Since then, as of July 1, 2020, the market value of the shares has risen tremendously. But the development is far from over: This article sheds light on how the market capitalization of the Californian technology company has changed over time. With a lot of ticker messages that influence the price.

Overview of the important news from Tesla that is driving the share price and market value of the cleantech company:

Tesla stock news

The shortsellers are back and are betting against Tesla

In the rally of Tesla stock between March 2020 and January 2021, shortsellers betting on falling prices lost $ 40 billion. The tech sector has now corrected significantly since January - Tesla shares have also lost around 35 percent of their value since January 27, 2021, while the Dow Jones gained 12 percent.

While part of the decline is likely to be due to the general exaggeration in the tech sector before, coupled with fears of inflation, it is also likely that Tesla is at risk of losing its source of income from carbon credits. In 2020 Tesla generated 1.6 billion dollars in sales - to speak of the “most lucrative source of income”, as the Handelsblatt does, is rather exaggerated in view of annual sales of 31.5 billion dollars.

But now shortsellers are gaining the upper hand because Tesla shares are on the decline. One who wants to take advantage of this is Mike Burry, a hedge fund manager who once predicted the 2007 financial crisis. His hedge fund Scion Asset Management bought $ 500 million worth of warrants in the first three months of the year. The bet is: if the price goes down, the hedge fund will make a profit.

Burry is in good company: According to S3 Partners, shortsellers have so far increased $ 4.3 billion this year. In total, shortseller bets of $ 24 billion have been placed again. However, there are equally high profile analysts who see Tesla stock at $ 1,000 by the end of the year. Who wins?

Tesla shares collapse by 7.5 percent shortly before the start of US trading

Tesla shares will now experience a black Tuesday on May 11, 2021 after a weak Monday. The shares of the technology and automotive group are currently losing around 7.5 percent in German stock trading and are now only around 480 euros. This decline is in line with the US requirements: In pre-market trading, Tesla's papers are cheaper to $ 587 - and the price has fallen by more than 6.6 percent.

Currently (as of 14:00) the rate in the USA has fallen below the important mark of 591 dollars. The closest support zones can be found at $ 541 and just over $ 500. Last week the stock slipped briefly below the stated $ 591 mark, but then rebounded.

The slump is spicy: Hydrogen stocks in particular have recently been under pressure because companies like Nel or Powercell delivered extremely weak figures - a clear correction of the exaggerated hydrogen hype. Tesla is known to sell battery electric vehicles, and most recently delivered a record quarter. A record quarter can also be expected for the second quarter - apparently the cars are already sold out for the entire quarter. According to current production capacity, around 200,000 vehicles are likely to switch to Tesla owners in the second quarter.

But what is causing the unrest now? I think it's a mix of the weak overall market for technology stocks on the one hand and some indications of uncertainties that directly affect Tesla. The key words are the chip crisis that Elon Musk spoke about in the Q1 call. This has worsened recently. In addition, a delay of at least three months is to be expected in Grünheide - because documents have to be reinterpreted. No vehicle will roll off the assembly line there before autumn.

Another element could be Tesla's statements about his own cells, which were presented on Battery Day. It will probably take another 12 months before mass production is possible. In addition to Tesla, Tesla's suppliers LG, CATL and Panasonic are also working on manufacturing processes, which in turn should give more confidence. Another risk factor is the poor PR work in China, where there has recently been significant criticism of Tesla. The company's reaction to this has been rather unprofessional.

Elon Musk, meanwhile, has time to host Saturday Night Live and make fun of his own brain. It definitely was. However, competitors Ford, Volkswagen and Lucid cleverly used the show through advertising campaigns to show the world that Tesla is no longer alone in selling electric cars in the world. Apparently that in turn contributed a little to the realization that the competition was catching up. On closer inspection, this seems to be more of a hope of the Tesla opponents.

Finally, there is still uncertainty about a fatal crash with a Tesla Model S near Texas. The responsible authority has made it clear in an interim report that the Tesla autopilot may not have been active, but so far it has been unable to shed much light on what exactly happened. According to the report, the owner of the vehicle and his passenger drove only a few hundred meters before they landed the Tesla on a tree. The vehicle burned out and the occupants died. Further investigations will follow. Here is the report.

Another explanation regarding world politics was provided by Reuters two hours ago: According to this, Tesla has put the expansion plans in China on hold because of the trade dispute with the USA. Among other things, this involves buying additional land. To this end, the proportion of Chinese vehicles in the group is to be reduced.

Tesla may therefore want to supply Europe in particular more from Texas and Fremont, and less from China. Even the USA should be supplied with the Tesla Model 3 from Shanghai beforehand. This plan has now apparently failed, according to Reuters. However, it does not seem to affect the expansion of the factory in Shanghai in general, as a quote in the Reuters article shows.

Tesla on track to sell one million cars in 2021

On the last day of trading in April, Tesla shares soared, rising more than 4.75 percent. With that, she returned above the strategically important $ 700 mark. One of the reasons for the development: Despite the now certain delay in the construction of the Tesla Giga 4 in Grünheide, from which the first Model Y should not come out until the end of the year, it is becoming increasingly clear that the car manufacturer is likely to double the number of vehicles sold in 2021 .

In the first quarter of 2021, the number of deliveries was 184,800 vehicles - excluding Model X and Model S, which were both in refresh mode. The first quarter is traditionally the weakest quarter of the year - there were also restrictions due to the pandemic and supply bottlenecks. Despite these adversities, it was enough for a record quarter.

Rumors have been circulating since February that Tesla is aiming for 100 percent growth in the world market this year. But analysts still only expect an increase of a little more than 50 percent. This attitude could have changed now: After all, some Tesla suppliers have significantly raised their annual forecasts in the past few days. For example the electronics and chip manufacturer STMicroelectronics. STM makes silicon carbide transistors - and 80 percent of its business depends on Tesla.

Now the company has raised its forecast for the year to $ 550 million in sales. An unmistakable sign that Tesla has requested higher quantities. There is more background information in the video from cleanthinking cooperation partner Teslanews - subscribe to the channel and find out every day what is happening at Tesla:

Tesla's new quarterly records bring new momentum to the stock

On Good Friday, Tesla announced the new quarterly records for production and delivery. It is "a paradigm shift," according to Wedbush analyst Dan Ives. Because despite many negative aspects, Tesla delivered 184,800 vehicles worldwide in the usually weak first quarter than in the fourth quarter of last year. The automaker exceeded the expectations of Bloomberg analyst surveys by 14,000 vehicles.

Since the stock exchanges were closed on Friday, the reaction of Tesla shareholders in the USA cannot be expected until today, Monday, and then tomorrow, Tuesday in Europe. For Dan Ives one thing is clear: the analyst has raised the target for the share from 950 to 1,000 dollars in the next 12 months - and is forecasting 1,300 dollars per share in the long-term scenario.

In the first quarter of 2021, Tesla did not sell a single Model X or Model S. Both vehicles are currently receiving a major facelift. It is all the more remarkable that Model S and Model Y alone achieved this new record. In addition, there was a fire in a factory in California, combined with a few days of production stoppage, and the chip crisis, which also partially affected Tesla.

Since such a good result was achieved despite these adversities, expectations for the year as a whole are rising. So far, analysts assume that only 850,000 Teslas will be delivered in 2021. That would be a jump from 500,000 vehicles in 2020 - but Tesla has long been fighting internally to deliver more than a million vehicles. If the establishment of production in Shanghai (expansion), Texas and Grünheide succeeds as planned, even 1,100,000 vehicle deliveries are conceivable.

Dan Ives has raised his expectations from 850,000 to 900,000 cars - more analyst comments will follow in the next few hours: New quarterly records bring new momentum to the stock. Tesla is expected to announce the quarterly figures on May 5.

Cathie Wood’s bull scenario: $ 9,000 per share in 2026

Like most tech stocks on the NASDAQ, Tesla stock is currently in a sharp corrective movement. According to analysts, the fundamental conditions for the car manufacturer have not changed in recent weeks. The stock is currently trading at just under $ 600 in New York.

One reason for the nervousness of the markets is fear of inflation. The high market values ​​of the tech stocks are primarily based on an expectation of future profits. But when these future earnings expectations are squeezed by interest rate hikes, investors tend to move away from these stocks and may be more likely to invest in stocks that promise a safe dividend.

Nobel laureate Joseph Stiglitz, however, considers the fear of inflation to be unfounded, because it could be counteracted in a targeted manner if there were actual reports for it. Much more important is that the states invest in revitalizing the SME landscape. Exactly what US President Joe Biden did with the stimulus package, which is about to be realized. Europe, on the other hand, according to Stiglitz, would not invest enough (statements in the Handelsblatt). So will the stock market calm down again this week?

Meanwhile, Cathie Wood from ARK INVEST has been working on new price targets for Tesla and forecast the development of the shares in several scenarios. These scenarios for Tesla are about to be announced. "It will be a festival for Tesla fans," says Al Root from Barron’s, who already knows the assessments.

There is a useful rule of thumb on Wall Street known as the "Rule of 72": The number 72 divided by the annual return is the years it will take for a stock to double in value. Means: With 15% the result is 4.8 years. Every value in the ARK INVEST portfolio must reach at least this 15 percent in order for it to be purchased.

Cathie Wood says Tesla will achieve “significantly more” than 15 percent even in the worst scenario (Bear). Cathie Woods Tesla Cases until 2026:

  • BEAR CASE: $ 1,600 per share (150 percent return in 5 years) (return 20 percent per year)
  • BASE CASE: $ 3,500 per share (40 percent return per year)
  • BULL CASE: $ 9,000 per share (worth 9 trillion) (return 70 percent per year)

Means: According to these scenarios, the setback phase could end soon and bring new all-time highs in the long term. If Cathie Wood is right.

Tesla analysts: long-term target of 500,000 deliveries is achieved

Tesla shares closed on December 30th on Wall Street at $ 694.78, more than four percent higher than the day before. There is a reason for this optimism: In the meantime, more and more analysts are assuming that Tesla will significantly exceed the long-term target of 500,000 vehicles delivered in 2020. To achieve this, Tesla would have to have delivered 181,000 vehicles - Wedbush analyst Dan Ives, for example, expects a result of 190,000 to 200,000 vehicles delivered for the full year, which brought significant challenges due to Corona.

It has been five years since Elon Musk set the annual target of 500,000 vehicles to be delivered - it is impressive that precisely this target has been achieved so precisely. Despite production hell and other difficulties within those five years. Tesla is expected to release the actual numbers on January 4th.

Tesla shares before new all-time high

Tesla's entry into the S&P 500 index is imminent. A one-time trading volume of Tesla shares of 80 billion US dollars is expected tonight in Germany. From Monday, Tesla shares will then be part of the index - and make up more than one percent. Tesla shares have risen 60 percent since mid-November, with trading in the United States ending yesterday at $ 655.90 - a new all-time high.

The background to this is that funds that track the S&P 500 index as an important indicator for the development of the economy 1: 1 can trade their shares immediately before new companies are accepted. In order to reflect the future image of the index, the trading volumes mentioned are to be expected. In particular, “passive” funds will have to take action here.

On normal days, Tesla shares are traded to the value of 18 billion US dollars - Tesla significantly exceeds even Apple in terms of trading volume (14 billion US dollars). While Tesla shares are expected to jump to new all-time highs today or on Monday, there may well be a sharp setback afterwards. With the stock soaring in 2020, it is expected that investors will sell portions of their shares in order to realize profits.

Stock jumps: Tesla from December 21 in the S&P 500

The index operator S&P Dow Jones Indices announced the inclusion of Tesla shares in the S&P 500 tonight, German time (11 p.m.). Accordingly, trading will start in the coming week. From December 21st, the paper will be an official component of the index, which covers the 500 largest companies in the USA.

The Tesla share reacted after the hours to the news, which had been expected for a long time, with a price jump of around 13 percent. In Lang & Schwarz's pre-trading session, the share gained a little more than eight percent up to 7.45 a.m. The decisive factor will be how the share will perform in real trading from 8 a.m. or 3:30 p.m. (New York).

This news could free the stock from the sideways trend of the past few weeks and quickly bring it to new all-time highs. Because funds that cover the important index must now be supplied with Tesla shares within the next two months. That should be an important signal for the stability of the share.

Existing shareholders have an interest in pushing the price up at least until December 13th - and being able to sell their share certificates to the funds as expensively as possible. A joyful Christmas surprise is looming here for all those who have the share in their portfolio.

However, to be clear: The inclusion in the S&P 500 can give the share a boost, but this may be over about a month after inclusion, i.e. in mid-January, should Tesla miss the annual target of 500,000 Teslas sold, for example, or that emerging solar business is weakening.

One of the decisive prerequisites for being included in the S&P 500 is profitability: Tesla has, as reported, achieved profits for five quarters in a row, and has consistently exceeded analysts' expectations.

Tesla exceeds expectations, but shares react cautiously

Update 10/21/2020: Tesla has presented its quarterly figures for the third quarter of 2020 - and reported a profit for the fifth quarter in a row. The automaker exceeded the high analyst expectations. In the third quarter of 2020, earnings per share were $ 0.76 - expectations were $ 0.56. Sales rose surprisingly sharply to $ 8.77 billion - $ 8.26 billion had been expected.

The Tesla share initially increased by around four percent after the figures were announced, and gave up almost all of the profits by 10:30 p.m. German time, i.e. within 30 minutes. The share price is currently (10:37 p.m.) at $ 430.

Perhaps one fact contributes significantly to the reluctance of the stock exchange: Tesla generated a profit of 331 million dollars. The income from the sale of CO2 certificates was over, at 397 million US dollars. To derive a negative evaluation of a highly growth-intensive company from this is whining at the very highest level.

Quarterly figures Q3 2020: How does the share react?

Update October 21, 2020: Tonight (October 21st to October 22nd, 2020) German time, Tesla presents the quarterly figures for the third quarter of 2020. The record deliveries and far-reaching expansion plans have raised expectations. On the one hand, there is a slight panic on the stock market because the corona crisis is worsening again. On the other hand, the Tesla share is still slightly in positive territory today during the trading day.

The question regarding the Q3 quarterly figures that Tesla will present tonight will be: Did the high deliveries also boost sales and profits - or eat up the investments, the technology company is currently building or expanding factories on three continents , this profit, so to speak.

Traditionally, the quarterly figures are presented at 10:30 p.m., shortly after the market closes, and then discussed in an earnings call. We will update this post as soon as the numbers are available!

Downhill despite the battery revolution: Tesla shares

Tesla held the long-awaited Battery Day on Tuesday night. The share could not benefit from this: the shares lost 5.6 percent before the trading day and were quoted at $ 424 at 10 p.m. In the aftermath of the hours - i.e. at the beginning of Battery Day - things went even further down despite the convincing presentation. With another minus of 29.03 points, the stock closed at 395 US dollars.

At Battery Day, Tesla presented a very concrete path for how the company intends to achieve the terawatt scale in battery production, which it identified as a crucial bottleneck. The 4680 cell, which will be produced in-house in the future, was presented for this purpose. Perhaps the stockbrokers did not like the fact that Tesla could not show a finished product this time, but only showed words and videos of the pilot line.

Of course, the realization of all the announced improvements is still relatively far away with a minimum of 12 and a maximum of 36 months - nevertheless it clearly shows the path how the linear cost curve (dollars per kilowatt hour) can actually be broken out. Tomorrow will show whether the analysts will correct their assessment after reading many media articles from specialist publications.

New rally before Battery Day

The Tesla share experienced August like a textbook: The shares rose from 250 euros to almost 450 euros at the end of the month. In between, the share split was at a ratio of 1: 5. At the beginning of September, the news that Tesla will (initially) not be included in the S&P 500, coupled with a general setback of the so rapidly rising tech stocks, led to a setback to below 300 euros.

But Elon Musk and the company quickly managed to reintroduce optimism: Among other things, with his visit to Germany, during which Musk indicated that the Tesla Model Y should be produced there completely differently than in the USA and Shanghai. For this purpose, the first Giga Press in the USA was put into operation.

And: Musk chirped that “many exciting things” would be presented at Battery Day on September 22nd. A general preview of the important event can be found here. It is to be expected, among other things, that Tesla will show how it should be possible to manufacture batteries on a terawatt scale. With today's Panasonic machines in Fremont, there would simply not be enough space for this. However, through many improvements, Tesla could have quadrupled the speed of production of new cells.

If you want to delve deeply into the subject of cells, batteries and Tesla predictions around Battery Day, you should take the time to watch this video:

As a result of all these developments, combined with the optimism that Tesla will achieve its annual target of 500,000 vehicles despite the Corona break, is now leading to the next rally of Tesla shares, which is likely to last a week until Battery Day. Within a week, the price in Frankfurt rose from 280 to 380 euros. The fascination for the work of this cleantech company continues.

Tesla shares for the first time at $ 2,000

Today, August 20, 2020, there was a historic moment: After a full daily increase of six percent and a breathtaking weekly rally, a Tesla share cost more than 2,000 US dollars for the first time at 19:04 German time. The stock's rally began with the stock split announcement a week ago.

It turns out: Elon Musk's words should be put on the gold scales. Weeks ago he said the price of a Tesla share was too high. The share split was announced a little later. A few days ago Elon Musk said that his electric cars are not affordable for everyone - for days there have been reports about how Tesla can reduce its costs and thus the prices for the cars.

One mechanism is the famous economies of scale in battery production as the most expensive component of an electric car. The expectation is that Tesla will explain at Battery Day on September 22nd how the company intends to multiply its production capacity without requiring additional large areas.

And: The car manufacturer wants to massively reduce costs by only requiring one component for the body instead of 70 components. A gigantic “Giga Press” is currently being installed in Fremont for this purpose.

Tesla is splitting the stock at a ratio of 5: 1

The carmaker announced tonight that the shares would be trading at a ratio of 5: 1 on August 21 and 28, respectively (5-to-1 split) is split. This means that every shareholder who holds Tesla shares on August 21 will receive four additional shares per share as a "dividend". These shares will be distributed on August 28th after the stock exchange closes. Finally, on August 31, the share price will be corrected on a “split-adjusted basis”. The value will then be one fifth of the then relevant closing price.

Background of the decision: Tesla traditionally issues shares to its employees, including those who earn less than an engineer, for example. With a share price of $ 1,300 or more, that's difficult to do. Therefore, the split should be carried out. And: Certainly there is also psychology in it: A share worth $ 1,300 is easier to "feel" classified as overvalued than a share worth $ 250. Rationally, of course, other criteria are important.

What does the 5-to-1 split mean for shareholders?

The 5-to-1 split has no noticeable effects on shareholders - apart from the fact that the share price jumped six percent after the trading hours. The German closing price at Tradegate was most recently at EUR 1,169.40 - the price has tended to move sideways for a while with a slight downward trend. This trend may now be broken again. TheStreet has researched that the stock could be included in the S&P 500 in the next three weeks.

Shareholder meeting on September 22, 2020

While the share price reached another record high at the end of the week, breaking the $ 1,500 mark for the first time, the important date for the shareholder meeting has now been set: The event will take place on September 22nd in Fremont, California. The event had been postponed again and again due to the corona pandemic.

And: Expectations for the day are high: Tesla Battery Day will also take place on the same date - with an optional tour of a new pilot production facility for battery cells. In the meantime, Elon Musk has revealed that production in Gigafactory 4 in Grünheide will be a revolution - it is assumed that Tesla will then need far fewer components for the Model Y to produce the body.

Tesla shares close at record levels

After Independence Day in the USA, last Friday the stock exchange was closed there, Tesla shares continued to grow dynamically. Probably not because Elon Musk added short shorts to the range of the Tesla online store at the weekend - but out of the expectation that the rise into the S&P 500 index will succeed.

The price in Tradegate trading closed at 10 p.m. at 1,210.80 euros. That was an increase of 12.36 percent. In the US, the rally stopped at the final bell at 1,371.00 points. In the aftermath of the trading day, 10 minutes after the market closed, the stock was already up another 10 dollars. Market capitalization rose to more than $ 254 billion.

Delivery figures exceed Wall Street expectations

Tesla has surprisingly published the delivery figures for the 2nd quarter before the market. Accordingly, it was possible to significantly exceed Wall Street's expectations. Whether the leap into the profit zone has also been successful will be announced in a few weeks with the quarterly figures.

  • 2nd quarter production: 82,272 electric cars
  • Deliveries in the 2nd quarter: 90,650 electric vehicles

Deliveries are at the upper end of analyst expectations. On average, however, only 72,000 deliveries were assumed. According to its own statement, Tesla has brought its most important factory in Fremont back to the level it had reached before the Corona period.

The numbers are very well received on the stock markets. The Tesla share is more than 8.50 percent in the plus - only yesterday the sound barrier of 1,000 euros per share was broken in Frankfurt. As of 2:15 p.m., the price was 1,078.80 euros.

Tesla shares cost more than 1,000 euros for the first time

While the share in the US has been priced at more than $ 1,000 for a long time, today, around 4:35 p.m., it made the first jump over the € 1,000 mark. The paper in Frankfurt am Main is currently up more than 4 percent. The reason is still the fantasy due to the expected figures for the 2nd quarter. It remains exciting ...

Tesla is now officially the most valuable automaker on the planet, according to Bloomberg. Contrary to the market capitalization figures at Yahoo, the ratio is now 207 billion dollars (Tesla) to 202 billion dollars (Toyota). At Yahoo Finance, Toyota's market capitalization is estimated at 172 billion. It's not clear where the difference is coming from. One thing is clear: nobody in the automotive sector is more valuable than the California rocket.

Numbers fantasy drives share to record (July 1, 2020)

Yesterday, Tuesday, Tesla shares hit a new all-time high. At 1.79.81 US dollars, the shares were quoted well above the important 1,000 dollar mark for the first time. Market capitalization grew to $ 200 billion - Toyota, the world's second largest automaker after Tesla, is at $ 174 billion.

Specifically, the share rose 6.98 percent and took Monday's price swing with it. At the beginning of the week, the price was still at $ 956.91. The reason for the upward trend after weeks of sideways movement: An email from Tesla CEO Elon Musk leaked on the electric car portal Electrek suggests that Tesla may have broken even in the second quarter, which was heavily influenced by the corona pandemic could.

Reason for optimism: Tesla's business in China is going well, with forecasts of up to 30,000 vehicles delivered. This leads to a particularly optimistic assessment that Tesla could have delivered 90,000 to 100,000 electric cars despite the corona pandemic. Other predictions are closer to 70,000 to 80,000 vehicles.

According to Electrek, Elon Musk wrote to the workforce: Breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory! (Breaking even looks super tight. It really makes a difference to every car you build and deliver. Please do everything you can to ensure victory!).

By “victory” Elon Musk could also have meant something else. According to Bloomberg, this victory could also consist of being included in the globally relevant S&P 500 stock market index. If Tesla achieves a quarterly profit, all criteria for this would be met. The result is that many funds and analysts have to pay special attention to an S&P 500 stock.

A profit in the difficult second quarter would at least be a notable achievement for Tesla. Instead, analysts expected an average GAAP loss of almost $ 2 per Tesla share on Monday with only 60,000-70,000 electric cars delivered from April to June. According to the news agency Bloomberg, the "victory" mentioned by Musk could be that Tesla is included in the globally significant S&P 500 stock market index because the criteria for it are met with another quarterly profit.

Tesla usually publishes its 2nd quarter 2020 figures on the 2nd or 3rd of the following month. This means that the quarterly figures, which are likely to have a significant impact on Tesla shares, are expected on Thursday of this week after the market closes, i.e. around 10:15 p.m. German summer time.

More electric car news at Cleanthinking

In addition to Tesla shares and beyond the Californian electric car pioneer, there is more news from the world of electrified mobility on four wheels. Read more news from the world of electric cars here.

Note on the author and on this post

The author of this post is a small shareholder and holds shares in Tesla. This article about the Tesla share is to be understood as purely informative, it is not a buy or sell advice on this or any other share. The article develops continuously in the sense of a ticker and is continuously updated. The latest articles can be found at the top.

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