BEIJING, Feb. 9 (Xinhua) — Tesla made history on Wall Street this week, with hundreds of dollars of two-way swings in its share price, with some investors scrambling to buy the company’s stock and others eager to make up for their short bets on the controversial stock. The stock opened just over $670 a share this week, the highest level on record after Tesla’s better-than-expected quarterly earnings last month.
But it’s nothing compared to what happened later.
Tesla’s shares rose for the second straight session after a number of upbeat forecasts for future growth. The stock rose nearly 20 percent on Monday and nearly 14 percent on Tuesday, surging to a high of $968.99 at one point in the session.
But there have been very optimistic forecasts for the stock. Why is there such a big change this week? It’s not clear.
“We’ve never seen share prices rise so fast that we completely ignore fundamentals or past records,” Needham analyst Rajvindra Gill wrote in a report to investors entitled “Irrational Exodus To the Record High.” “
But then Tesla fell from that high point. The company’s shares fell 17.2 per cent on Wednesday on delays in production and sales in China and fears that the stock had become a speculative bubble.
In addition, in the first three days of the week, Tesla’s trading volume broke the company’s previous record. Until then, Tesla traded about 18 million shares a day. Trading volumes on Monday, Tuesday and Wednesday broke records, reaching a record 47m, 60m and 48m shares respectively.
The stock was much quieter on Thursday and Friday, with relatively small swings, up 1.9 per cent and 0.1 per cent respectively.
Let’s take a look back at what happened to Tesla stocks over the past week.
Monday: Rocket launch
Tesla’s shares surged 19.9 percent on Monday, posting its biggest one-day gain since May 2013. Argus Research raised its target price for the stock to an all-time high.
Steve Eisman, a prominent investor who announced his abandonment this week, said he had suffered a big loss from Tesla’s “crazy” rise. Esman is known for betting on the subprime crisis a decade ago.
“Everyone has a pain threshold. When a stock can’t be valued because of some dynamic growth factor and a cult-like factor, you have to leave,” says Mr Eisman.
Tuesday: Close to $1,000 per share
Ron Baron, Tesla’s main shareholder and investment tycoon, has scored a rally, predicting before the opening that the company’s revenues would exceed $1 trillion over 10 years and continue to grow.
“By then, it’s not over,” Mr Barron said Tuesday. From that moment on, there are many growth opportunities ahead. “
The stock gradually broke through $800, $850 and $900 a share in early trading, eventually closing at a high of $970 a share.
“I can’t believe this damn stock. It’s crazy,” Roth Capital analyst Craig Irwin said Tuesday. “
Although the stock retreated in the last hour of trading on Tuesday to close at $887.06, it was still well above its all-time high. With Musk holding about 19 percent of Tesla’s stock, Musk’s net worth rose $8.1 billion on Monday and Tuesday.
As Musk’s fortunes grew, the shorts took a hit. As of Tuesday, short losses had risen to $11.5 billion since the beginning of the year.
But at the hottest point of the market, Citron Research, a well-known short-sing agency, warned that Tesla’s share price had risen to its current level and that even Musk, the company’s founder, should short the stock. “We love Tesla and promise never to be empty again,” he said. But when computers started to drive the market, we believed that even Elon, if he were a fund manager, would be shorting the stock here. It’s no longer about technology, it’s become the new Wall Street casino. “
Wednesday: Overnight into a bear market
On Wednesday, Tesla Vice President Lin Tao said in response to a user’s question on Twitter that delivery, originally scheduled for early February, would be delayed. Tesla’s shares plunged 17.2 percent, ending a run of gains, as China’s growing electric car market was crucial to Tesla. Coupled with Tesla’s previous move to close its Shanghai plant, investors are worried that the company’s production and costs will be lower than previously thought.
Ralph Nader, a prominent US consumer activist, also warned on Wednesday about the recent surge in Tesla’s stock and called on regulators to consider an investigation into potential insider trading. Tesla sold fewer than 400,000 cars last year, but the valuation exceeds that of Volkswagen and General Motors combined. He believes the SEC should investigate whether there is insider trading, potential market manipulation, and so on.
He Xiaopeng, founder of Xiaopeng Automobile, a domestic smart car company, commented on Tesla’s stock price surge, arguing that the difference between cars and mobile phones is so great that it is difficult to form a huge winner’s pass and ultra-high gross margin, so he doesn’t see the logic of such a high valuation at the moment; The proportion of private vehicle modes will still far exceed full-time sharing models.
Thursday: Closes up after a big sell-off
Michael Novogratz, us billionaire and founder and CEO of Galaxy Digital Capital Management, said on Thursday that shorting Tesla’s stock had made him a “black eye” because the company’s share price had soared in recent days at a rate almost as fast as the bitcoin bubble. “I was so arrogant that I wanted to pierce it on top of a bubble and got a black eye, ” says Mr Novograz. “
Canaccord Genuity analyst Jed Dorsheimer, on the other hand, took a cautious view, cutting his rating on Tesla’s stock from buy to hold, but said he would not short the stock and keep its target price at $750.
In addition, a Tesla salesperson announced that its stores in mainland China would be temporarily closed. Tesla’s share stake initially fell more than 6 percent after the news, but has since recovered as above-average volume swelled the company’s share price up and down the day. But Tesla’s shares rose slowly, closing up less than 2 percent.
Friday: Markets finally calm down
On the last day of the week, the market finally calmed down. The company’s shares fell just 0.1 percent, with below-average trading volumes at the close of the day.
Tesla’s shares closed up 15 percent this week. Since 2020, the stock has risen more than 75 percent.