The firm, which has owned Tesla shares since 2013, added that “Tesla no longer faces difficulties in raising capital at scale from external sources, but if there were serious pullbacks in the share price, we would welcome the opportunity to ramp up once again. our shareholding “. Anderson said.
It seems that moment came earlier than expected.
In trading between the close of Tuesday and Friday, Tesla shares fell 12% to close Friday at $ 418, after falling more than 16% since Monday.
The outlook for the electric vehicle maker has always been contentious, and the bears have long argued that Tesla has a business model problem – that is, its core business will never make enough money to justify the high stock price. .
In fact, Tesla shares have seen a meteoric rise in recent months, nearly 560% from March to Tuesday’s peak. To put that in perspective, Tesla shares were up about 33% in all of 2019. And it has left many on the streets wondering if the electric vehicle maker is worth its current multiple (even after its stock split).
And for longtime bulls like Wedbush’s Dan Ives, Tesla’s recent moves, including a 5-for-1 stock split and a capital increase of up to $ 5 billion, “only add more credibility to the bullish thesis. long-term from Tesla. ” Ives said recently. he told Fortune. Its bullish argument for the stock is $ 700 a share, which would represent an additional 40% gain from Friday’s close.
Meanwhile, many predict that, having reported earnings in its second quarter (the fourth in a row), Tesla will soon be added to the S&P 500 Index. The inclusion would be “important from an institutional standpoint,” Ives recently told Fortune, as Institutional investors have shown growing interest in stocks in recent months, he says. However, Tesla investors will have to keep waiting, as the Elon Musk-led company was not among those added to the S&P 500 on Friday.
Regardless of where Tesla is located, one thing is for sure: As financial advisers always recommend, this week’s changes surely show the power of regularly rebalancing your portfolio.
