Even so, Teslas share price has risen 70% since the beginning of 2020.
Why did Tesla suddenly become the target of Wall Street? Is it really time to revalue Tesla? Is Teslas share price likely to continue to soar? At this point in time, Wall Street has diverged dramatically about Teslas prospects.
From auto company to technology company
From this, the Bulls find the fulcrum of firm holding.
Ron Baron, a billionaire and major shareholder of Tesla, believes that Teslas revenue will reach $1 trillion in 10 years. He said he would not sell one of his nearly 1.63 million Tesla shares, this is just the beginning.
In addition, Tesla plans to expand the model 3 / y production capacity of Fremont Spy Factory in the United States to 500000 vehicles in the middle of 2020, and it is expected that the model y will start to be delivered at the end of March, half a year ahead of schedule. This model is expected to relay model 3 and become a new driving force for Teslas growth.
Reuters also noted that Teslas share price has outperformed this year, thanks to the companys first quarterly profit in its battery business with Panasonic.
From the perspective of all parties of futu securities, Teslas share price soared for two reasons.
First of all, the global new energy vehicle industry has accelerated. The cooperation between Tesla and Ningde times indicates that the industrial development will be greatly accelerated, the cost will be greatly reduced, and the demand will continue to grow. At present, the market share of pure electric new energy vehicles in the world is only about 2% - 3%.
Second, Tesla is becoming more and more like apple. The results of the fourth quarter of 2019 confirm that the companys business model is keeping pace with Apples, and the continuous charging of software services will become the most important bright spot in the future. With Zhuyu in front, the market is also full of confidence in Teslas software and application service ecological development prospect.
We think Tesla is a leader in battery and electric vehicle technology, Adam Jonas, an analyst at Morgan Stanley, said in an interview. Tesla has moved from being seen as an automotive stock to being seen as a technology stock. It coexists with Amazon, apple and Google.
People have realized that Tesla stands out in terms of electric vehicle technology, said Peter Rawlinson, chief executive of lucid motors, at the Bloomberg new energy finance summit in San Francisco. They are even ahead of the media, and I think the gap is widening, not narrowing.
Once promised never to short Teslas rafters also began to short
According to the latest data from S3 partners, a data company that tracks short selling, Teslas short position lost $2.7 billion as of the morning of February 4, with a record $3.2 billion loss the previous day.
According to some analysts, Tesla may be short, that is, the rising stock price forces short sellers to buy back their positions to stop losses.
Specifically, as Teslas price rises steadily above the price at which the short sellers initially sold, they will suffer losses, so short sellers will often have to rush to buy shares to protect themselves from further losses.
The surge in Teslas share price also attracted more retail investors, further boosting the share price. Tesla shares traded 47 million shares on February 3, the most active day on record. Craig Irwin, a senior research analyst at Roth capital, points out that large financial institutions and hedge funds are also taking advantage of the momentum to enter the market, because they are afraid that they will miss the car and miss the game, which brings huge momentum to the stock price rise.
As more and more investors do so, they push up Teslas share price further, forcing short sellers to buy more shares.
Since Teslas share price fell below $200 in June last year, Teslas short positions have closed $12.6 billion worth of shares. It may also be one of the factors driving Teslas rebound. Ihor dusaniwsky, head of forecasting and analysis at s3partners, said.
However, short institutions did not give up, and even bulls began to short.
According to the data of S3 partner, as of the closing on February 3, Teslas open short position still amounted to 24.1 million shares, accounting for 18% of the outstanding shares, with a nominal market value of 18.8 billion US dollars (about 131.6 billion yuan).
Its not just short sellers who think Teslas share price is dangerous.
Pierre ferragu, an analyst with new street research, a firm that has been strongly bullish on Tesla, lowered his stock rating, saying there is limited room for appreciation in the next 12 months: we believe that Tesla will perform well in 2020, but this is largely in line with expectations. With the end of short selling and the decline of gross margin in the first quarter of this year, we think there is a certain risk in the stock price.
Ross Gerber, chief executive of Gerber Kawasaki, which has $1.1 billion in assets, said the rise in Teslas share price was driven in part by retail investors and mutual funds seeking to own the stock at any price. Others think it could be a temporary squeeze, as short sellers buy quickly to cover their positions.
He noted that Tesla creates a sustainable future for the people of a company through its automotive, solar and battery businesses.
Tesla has proven that it can do it, and I think its the only company in the world that can really create solutions for climate change, Gerber added Still, he said, I like the company and I think it has a bright future, but I dont recommend people buy shares for $900.
BespokeInvestmentGroup also said that the big gains could be comparable to some of the biggest bubbles in the stock market history, including the technology Internet bubble and housing related stocks before the financial crisis.
Teslas bubble looks much bigger than that of biotechnology, housing builders and so on, the agency wrote. We dont know how much Teslas stock will earn, but because the companys valuation is higher than most of the largest stocks on the planet, its hard to take it seriously except for speculative over investment and positioning.
Tesla has become a parabola, said Matt Maley, chief marketing strategist at Miller Tabak. This puts Tesla well above what its current fundamentals support. In the near future, stocks will collapse completely.
Teslas share price has started to recover. As of 11:05 on February 5, Tesla fell 10.37% to $794.14. Its current price is 18% lower than yesterdays record high of $968.99, and its market value is down to $140 billion.