The Tesla company’s shares recently increased 20%, or $129, making its market value an astounding $140.6 billion.
That is more than U.S. automakers GM, Ford and Chrysler are worth, combined. This, even though those three companies sell more cars in two weeks than Tesla in a whole year.
This is part of an increase that has been in the making for some time. Over the past six months, Tesla shares have increased by 233%!
Share Increases Dismay Those Short-Selling Tesla Stock
This is hard news for those who are short-selling, or shorting Tesla stock. Shorting is when an investor borrows shares and immediately sells them, in the hopes that they can scoop them up later for a lower price.
Shorting can be rewarding, and a lot of money can be made when the stocks are returned to the lender, and the buyer pockets the difference. But shorting can be risky. The stocks don’t always go down, as Tesla stocks show.
Tesla shares are the most shorted in the U.S. There are a lot of people hoping that the Tesla stocks will fall, but they keep going up. Those who have shorted Tesla have lost more than $8 billion on paper in the early part of 2020.
What is Driving the Gains for Tesla
Factors that are contributing to this gain is the current bullish sentiment in general, as well as the company’s new plant in Shanghai that is driving growth. This factory came online faster than was expected.
Tesla has a goal to increase its global vehicle sales by more than a third in 2020, to half a million units, up from 367,000 the previous year.
Japan’s Panasonic made earnings, and it is Panasonic that supplies the batteries that are needed for Tesla.
Wall Street Has Been Impressed by Tesla
In addition, Argus Research, which provides independent research and analysis on U.S. equities, raised its price target for Tesla from $556 to $808, which was among the highest on Wall Street.
This, due to Tesla’s strong fourth quarter results and increasing vehicle sales.
It would seem that investors are beginning to believe that Tesla can produce mass-volume electric vehicles. And it’s not only Tesla that can benefit and make money from electric vehicles, but other automakers, battery makers and suppliers.
Possible Stock Market Troubles
A chief investment officer has noted that pricing in everything that may go well in the future without pricing in anything that could go wrong will make correct valuation difficult.
World events and circumstances affect the stock market, which in turn can affect Tesla and its stock. The latest world-wide event that is affecting the market is the fast-spreading coronavirus.
It remains to be seen how it will impact Tesla’s supply chain and its production, especially since it just built a new gigafactory in China. Tesla has said the virus could impact the first-quarter results for 2020.
The company has worked hard to go beyond being a niche manufacturer to a mass-market electric vehicle producer, and all indications are that they can succeed.