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Category: Tesla (TSLA)
Date: 1 September 2020 Tesla (TSLA) stock price: $498.32 In this article we take a look at the astronomical surge in the stock price of Tesla (TSLA) and caution investors against investing in the horribly overvalued stock of Tesla. In addition to this we take a look at the fact that Tesla stock split 5 to 1 recently.
Again we caution investors. Do not buy the stock of Tesla hoping to make a fortune of it. Its a bubble and it will burst. |
Tesla, a favorite among amateur investors on online trading firm Robinhood Financial, has been one of the largest beneficiaries of the boom in retail investing during pandemic lockdowns. At one point last month, almost 40,000 Robinhood accounts added Tesla shares during a single four-hour span. "
More About Tesla (TSLA)
We design, develop, manufacture and sell high-performance fully electric vehicles (“EVs”) and energy generation and storage systems, and also install and maintain such energy systems and sell solar electricity. We are the world’s first vertically integated sustainable energy company, offering end-toend clean energy products, including generation, storage and consumption. We have established and continue to grow a global network of stores, galleries, vehicle service centers, Mobile Service technicians, body shops, Supercharger stations and Destination Chargers to accelerate the widespread adoption of our products, and we continue to develop self-driving capability in order to improve vehicle safety. Our sustainable energy products, engineering expertise, intense focus to accelerate the world’s transition to sustainable energy, and business model differentiate us from other companies.
We currently produce and sell three fully electric vehicles: the Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan. All of our vehicles offer high performance and functionality as well as attractive styling. We commenced deliveries of Model S in June 2012 and have continued to improve Model S by introducing performance, all-wheel drive dual motor, and Autopilot options, as well as free over-the-air software updates. We commenced deliveries of Model X in September 2015. Model X offers seating for up to seven people, all-wheel drive, and our Autopilot functionality. We commenced deliveries of Model 3, a lower-priced sedan designed for the mass market, in July 2017, and we have significantly ramped its production. We are now embarking on the delivery of Model 3 in international markets and are focusing on lowering manufacturing costs while continuing to increase its production rate. We also intend to bring additional all-electric vehicles to market in the future, including Model Y, the Tesla Semi truck, a pickup truck and a new version of the Tesla Roadster.
We currently produce and sell three fully electric vehicles: the Model S sedan, the Model X sport utility vehicle (“SUV”) and the Model 3 sedan. All of our vehicles offer high performance and functionality as well as attractive styling. We commenced deliveries of Model S in June 2012 and have continued to improve Model S by introducing performance, all-wheel drive dual motor, and Autopilot options, as well as free over-the-air software updates. We commenced deliveries of Model X in September 2015. Model X offers seating for up to seven people, all-wheel drive, and our Autopilot functionality. We commenced deliveries of Model 3, a lower-priced sedan designed for the mass market, in July 2017, and we have significantly ramped its production. We are now embarking on the delivery of Model 3 in international markets and are focusing on lowering manufacturing costs while continuing to increase its production rate. We also intend to bring additional all-electric vehicles to market in the future, including Model Y, the Tesla Semi truck, a pickup truck and a new version of the Tesla Roadster.
Quick facts about Tesla:
2nd quarter 2020 production numbers compared to 2nd quarter of 2019
Model description June 2020 June 2019 Year on year percentage change
- Tesla is listed on the Nasdaq under share code ticker: TSLA
- Tesla has 48 817 employees
- Revenue for 2Q 2020: $6.03 billion
- Automotive gross margin in 1Q 2020: 25.4%
- Earnings per share for 2nd quarter 2020: $0.50
- PE ratio of Tesla: 1000
- What this is saying you are paying $1000 for every $1 profit Tesla makes. So if you buying Tesla at $2000 a stock. Just know for a full year the firm is likely to make $2 a stock in profits. So do you honestly believe Tesla is still a good investment? Or that that type of return is a good investment?
- Shares in issue: 207 million
- Cash and equivalents on balance sheet: $8.61 billion
- Operating margin for Tesla: 5.4%
- Stockholders equity in Tesla: $9.855 billion
- Stockholders equity per share in Tesla: $47.60
- Tesla is trading at 42 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at. For some perspective the average price to book value firms in the S&P 500 trade at is 3.7
2nd quarter 2020 production numbers compared to 2nd quarter of 2019
Model description June 2020 June 2019 Year on year percentage change
- Model S/X 6 326 14 517 - 56%
- Model 3/Y 75 946 72 531 5%
- Total 82 272 87 048 -5%
Tesla (TSLA) founder Elon Musk now 3rd richest person in the world
The article below, obtained from Bloomberg discusses Tesla (TSLA) founder's wealth and Tesla's recent stock split
(Bloomberg) -- Elon Musk is now the third-richest person in the world.
Musk passed Facebook Inc. co-founder Mark Zuckerberg Monday as shares of Tesla Inc. continued their unrelenting rally after undergoing a forward stock split. Musk is now worth $115.4 billion compared with $110.8 billion for Zuckerberg, according to the Bloomberg Billionaires Index. Also Monday, Jeff Bezos’s ex-wife MacKenzie Scott became the world’s richest woman, passing L’Oreal SA heiress Francoise Bettencourt Meyers. Scott, 50, who received a 4% stake in Amazon.com Inc. as part of her divorce from founder Bezos, is now worth $66.4 billion.
Musk, 49, has seen a meteoric rise in his wealth, with his net worth growing by $87.8 billion this year as Tesla shares surged almost 500%. Also helpful: an audacious pay package -- the largest corporate pay deal ever struck between a chief executive officer and a board of directors -- that could yield him more than $50 billion if all goals are met.
Tesla, a favorite among amateur investors on online trading firm Robinhood Financial, has been one of the largest beneficiaries of the boom in retail investing during pandemic lockdowns. At one point last month, almost 40,000 Robinhood accounts added Tesla shares during a single four-hour span. And the trend isn’t limited to the U.S.: South Korean retail investors have piled into Tesla this year and hold about a 1% stake in the American auto maker.
Tesla’s $464 billion market value now exceeds that of retail behemoth Walmart Inc., the largest company in the U.S. by revenue. Last week, Musk joined Zuckerberg, Bezos and Microsoft Corp. co-founder Bill Gates in the rarefied centibillionaire club as tech stocks rose.
The heady pace of wealth accumulation in recent months is in stark contrast to the state of the global economy. Growth has slumped sharply since the pandemic began with companies laying off millions of workers and consumer demand cratering. The brunt of economic pain has been borne by young and lower-wage workers, whose jobs are typically more vulnerable to Covid-related layoffs. The rising income inequality has provoked sharp responses from many progressive politicians and critics on the left. U.S. Senator Bernie Sanders this month introduced legislation to tax “extreme wealth gains” during the pandemic. Musk still has a long way to become the world’s richest person. Bezos is worth more than $200 billion.
(Bloomberg) -- Elon Musk is now the third-richest person in the world.
Musk passed Facebook Inc. co-founder Mark Zuckerberg Monday as shares of Tesla Inc. continued their unrelenting rally after undergoing a forward stock split. Musk is now worth $115.4 billion compared with $110.8 billion for Zuckerberg, according to the Bloomberg Billionaires Index. Also Monday, Jeff Bezos’s ex-wife MacKenzie Scott became the world’s richest woman, passing L’Oreal SA heiress Francoise Bettencourt Meyers. Scott, 50, who received a 4% stake in Amazon.com Inc. as part of her divorce from founder Bezos, is now worth $66.4 billion.
Musk, 49, has seen a meteoric rise in his wealth, with his net worth growing by $87.8 billion this year as Tesla shares surged almost 500%. Also helpful: an audacious pay package -- the largest corporate pay deal ever struck between a chief executive officer and a board of directors -- that could yield him more than $50 billion if all goals are met.
Tesla, a favorite among amateur investors on online trading firm Robinhood Financial, has been one of the largest beneficiaries of the boom in retail investing during pandemic lockdowns. At one point last month, almost 40,000 Robinhood accounts added Tesla shares during a single four-hour span. And the trend isn’t limited to the U.S.: South Korean retail investors have piled into Tesla this year and hold about a 1% stake in the American auto maker.
Tesla’s $464 billion market value now exceeds that of retail behemoth Walmart Inc., the largest company in the U.S. by revenue. Last week, Musk joined Zuckerberg, Bezos and Microsoft Corp. co-founder Bill Gates in the rarefied centibillionaire club as tech stocks rose.
The heady pace of wealth accumulation in recent months is in stark contrast to the state of the global economy. Growth has slumped sharply since the pandemic began with companies laying off millions of workers and consumer demand cratering. The brunt of economic pain has been borne by young and lower-wage workers, whose jobs are typically more vulnerable to Covid-related layoffs. The rising income inequality has provoked sharp responses from many progressive politicians and critics on the left. U.S. Senator Bernie Sanders this month introduced legislation to tax “extreme wealth gains” during the pandemic. Musk still has a long way to become the world’s richest person. Bezos is worth more than $200 billion.
Tesla (TSLA) stock price history over the last 5 years
The image below shows the stock price history of Tesla (TSLA) over the last 5 years. And the massive decline towards the end is due to the 5 to 1 stock split. Basically if you held 1 Tesla stock before the split, you now hold 5. So the massive price decline is made up for by the fact that you now own a lot of shares.
So why is Tesla (TSLA) stock overvalued?
So why do we believe the stock of Tesla (TSLA) is overvalued?
Well let's start with its Price to Earnings Ratio (PE)
Earnings per share for 2nd quarter 2020: $0.50
Next lets take a look at Tesla's Price/Stockholders equity per share ratio
Stockholders equity in Tesla: $9.855 billion
Lets take a look at the production numbers of Tesla:
Model description June 2020 June 2019 Year on year percentage change
So total production numbers declined by -5% compared to the same quarter of the previous year, yet the group's stock price surges to new all time highs?
Come on people. Surely after reading this you will realise that Tesla (TSLA) stock is one big fat bubble that has sucked in a lot of investors all hoping to get rich from the continuing surge in its stock price. These type of people are created by excess cash in markets. And some of the Covid-19 stimulus cheques have found their way into the stock market and definitely into Tesla's stock and has driven up the stock price of Tesla to levels it should definitely not be at
If you currently own Tesla our advice is to get out while you can and take your profits (if you made some). And if you are planning in buying Tesla now, our advice is to rather not. We rate the stock of Tesla (TSLA) as a SELL
Well let's start with its Price to Earnings Ratio (PE)
Earnings per share for 2nd quarter 2020: $0.50
- PE ratio of Tesla: 1000
- What this is saying you are paying $1000 for every $1 profit Tesla makes. So if you buying Tesla at $2000 a stock. Just know for a full year the firm is likely to make $2 a stock in profits. So do you honestly believe Tesla is still a good investment? Or that that type of return is a good investment?
Next lets take a look at Tesla's Price/Stockholders equity per share ratio
Stockholders equity in Tesla: $9.855 billion
- Stockholders equity per share in Tesla: $47.60 ($9.52 after the 5 to 1 stock split)
- Tesla is trading at 52.3 times its stockholders equity per share, which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- If Tesla were to sell all their assets, settle all their liabilities and distribute what is left equally amongst its stockholders each stockholder will receive $47.60 a stock. So does the $2000 stock price still look like a good investment?
Lets take a look at the production numbers of Tesla:
Model description June 2020 June 2019 Year on year percentage change
- Model S/X 6 326 14 517 - 56%
- Model 3/Y 75 946 72 531 5%
- Total 82 272 87 048 -5%
So total production numbers declined by -5% compared to the same quarter of the previous year, yet the group's stock price surges to new all time highs?
Come on people. Surely after reading this you will realise that Tesla (TSLA) stock is one big fat bubble that has sucked in a lot of investors all hoping to get rich from the continuing surge in its stock price. These type of people are created by excess cash in markets. And some of the Covid-19 stimulus cheques have found their way into the stock market and definitely into Tesla's stock and has driven up the stock price of Tesla to levels it should definitely not be at
If you currently own Tesla our advice is to get out while you can and take your profits (if you made some). And if you are planning in buying Tesla now, our advice is to rather not. We rate the stock of Tesla (TSLA) as a SELL
Tesla (TSLA) stock support and resistance levels
The two images below shows the Tesla stock price and its shorter term support and resistance (10 and 30 day moving averages) and then longer term Tesla support and resistance levels (50 and 200 day moving averages)
Tesla stock 10 and 30 day moving averagePotential short term support and resistance levels of Tesla (TSLA) stock
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Tesla stock 50 and 200 day moving averagePotential longer term support and resistance levels of Tesla (TSLA) stock
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So now we have a few potential support or resistance levels for the stock price of Tesla (TSLA). Lastly we will take a look at Pivot Points (based on monthly data) to calculate potential support and resistance levels for Tesla. The image below shows the potential support and resistance levels for Tesla (TSLA) stock based on pivot points
Summary of the Tesla (TSLA) support and resistance levels based on pivot points:
- Resistance 3: $2504.82 ($500.8 after stock split)
- Resistance 2: $2149.91 ($429.98 after stock split)
- Resistance 1: $1790.33 ($358.8 after stock split)
- Pivot Point: $1435.42 ($287.1 after stock split)
- Support 1: $1075.84 ($215.2 after stock split)
- Support 2: $720.93 ($144.2 after stock split)
- Support 3: $361.35 ($72.3 after stock split)