Are we seeing a repeat of 1999?
Tesla's run reminds me of much of what took place in the late 1990s. Back then, any stock that had anything to do with the Internet was sent into the stratosphere. Some might remember Yahoo at $475 per share.
This, of course, is a bit different. Tesla is far from a start up. The company was started back in 2003 and went public in 2010. The company has delivered close to 1 million vehicles, a feat not accomplished by a new automaker in the United States in over 100 years.
In short, the company is a disruptive force in the automobile and energy sectors. Elon Musk set huge goals for the company. The problem is Tesla's history is littered with missed deadlines, outrageous behavior from the CEO, and mounting losses.
I wasn't going to write another Tesla article until I saw this.
A big move one day is not that newsworthy. However, in light of what a 6 month chart tells us, this is stunning.
Look at that move. What the heck is going on here?
The cause for today's big run up is an updated outlook from a major analyst.
Shares of Tesla soared as much as 11.5% on Monday after Argus Research raised its price target to $808 from $556.
The firm’s analysts cited Tesla’s strong fourth-quarter financials, which exceeded Wall Street’s expectations last week. It also raised its earnings per share estimate to $8.01 from $5.96 and expects that to double by 2021.
https://www.cnbc.com/2020/02/03/tesla-stock-soars-hitting-700-per-share-for-the-first-time.html
A move up from $550 to over $800? That is a pretty big shift.
It seems Tesla is finally getting a lot of love from Wall Street after so many years of being the pincushion. The question is whether it is warranted or not.
Tesla is making great strides as a company and it was overlooked by the market. However, what took place the last couple months is mind-boggling. It seems a lot are trying to play catch up. We know the stock is heavily shorted so buying to over is part of it.
Nevertheless, this appears to be more than a short covering. It does appear a mania set in. I mean, serious, a $250 increase in the analysts price? Either that mean it was horribly wrong before or is amiss now. The bottom line is something does not add up.
I believe in Tesla and Musk's vision but this appears to be too much, too soon. Of course, I thought that about $200 ago so take that for what it is worth.
I guess while Tesla is the hottest story on Wall Street, might as well keep following it.
As always, this is not financial advice.
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Posted via Steemleo