Since last year, Tesla has successfully counterattacked, transforming from a controversial company to an emerging giant in the technology field. Since the beginning of this year, the capital market has almost never stopped pursuing Tesla . In less than three quarters, the company's market value has increased by nearly five times.
Recently, Tesla even struck while the iron was hot and split the stock at a ratio of 1:5 (this move is intended to lower the price of each stock to attract more investors to participate). Although the company's fundamentals have not changed, the stock price of Tesla has risen further.
On August 31, Eastern Time, Tesla surpassed Visa to become the seventh-ranked company in the US stock market. Tesla CEO Elon Musk also ranked among the top three richest people in the world with a net worth of more than 110 billion US dollars.
However, with the release of two consecutive "bad" messages, the myth of Tesla soaring in also pressed the pause button. In the past two trading days, the share price of Tesla fell 4.67% and 5.83% respectively, and now it closes US$447.37 per share. The company's market value evaporated by US$47.5 billion in two days - equivalent to a drop in the market value of General Motors.
On September 2, Eastern Time, Tesla fell by more than 15% during the session, the largest drop in more than five months. The sudden decline in the stock price of Tesla also caused fluctuations in other technology stocks and automobile stocks. For example, the stock price of Apple once fell by more than 5%, and finally closed down by 2.07%. Chinese stocks listed in the list of NIO, Ideal Auto, and Xpeng Motors also fell by more than 8%, 7%, and 6%, but in the end, it only closed at a drop of 1.09%, 2.3%, and 2.41%.
On the same day, the three major U.S. stock indexes closed up collectively, with the Dow Jones Industrial Average rising 1.59%, the Nasdaq rose 0.98%, and the S&P 500 rose 1.54%. Among them, the Dow Jones Industrial Average rose more than 450 points, the Nasdaq closed above 12,000 points for the first time, and the S&P 500 index continued to hit a new closing high. Two major "bad" of
have caused the stock price to fall? On the news of
, Tesla announced two major "deficiencies" in the past two trading days: one is to issue US$5 billion in new shares for refinancing, and the other is Baillie Gifford, the company's largest external shareholder, cashed out and reduced its holdings, and its shareholding ratio dropped from the previous 6.32% to less than 5%. The latter has especially hit the confidence of many investors.
According to the U.S. Securities and Exchange Commission (SEC) filing, Baillie Gifford currently only holds less than 5% of Tesla . Based on the scale after the stock split, Baillie Gifford reduced its holdings by 19.284 million shares. If calculated based on the company's closing price of $498.32 per share on August 31, Baillie Gifford's total cash out amount is $9.61 billion.
Baillie Gifford said in a statement that it is still a long-term "believers" of Tesla and that the reduction is only due to portfolio restrictions.
statement stated, "The sharp rise in the stock price of Tesla means we need to reduce our holdings. We intend to maintain the position of an important shareholder of Tesla in the next few years, and we are still very optimistic about the company's future. Tesla will no longer face any difficulties in raising funds on a large scale from external sources, but if the stock price of Tesla declines sharply, we will still be very happy to see such an opportunity to increase positions." The above judgment of
seems to make some sense, but from the market reaction, although Tesla does not face any difficulties in raising funds on a large scale from external, it is still not good news. Earlier on September 1, Tesla announced that it would issue new shares one after another to raise about $5 billion, but the market gave a "punch".
Overall, market doubts mainly focus on two aspects. Analysis pointed out that, first, Tesla failed to clearly explain the purpose of the funds, and simply vaguely stated that it will be used to "strengthen the balance sheet" and general corporate purposes, which disappointed investors; second, after the stock split, additional financing was initiated, it seems that Tesla began to shift the focus of financing to retail investors. Gordon Johnson, a GLJ analyst who is fiercely bearish on Tesla , pointed out that this means that institutions' demand for Tesla stocks is "drying out".More than 80% of analysts do not recommend entering
As Tesla stock price continues to rise, cautious views on the company's valuation have gradually increased. Especially since the announcement of the split of stocks on August 11, the trends that have nothing to do with fundamentals have caused the company's stock price to rise by 80% in more than half a month.
According to Tencent Finance, among the 36 analysts surveyed by financial information provider FactSet, only 7 (19%) rated Tesla stock equivalent to a "buy", while half of the analysts gave a neutral rating. The average target price for all analysts is $261.85, 41.4% lower than the closing price after two consecutive days of declines.
Joseph Spak, an analyst at RBC Capital Markets, believes that Tesla is "basically overvalued." He agrees that Tesla is clearly ahead of its competitors, has relatively cheap capital channels and the ability to attract talents, and is an "incredible" brand, and understands that "narrative, momentum and other factors" can affect stock prices, but he still emphasizes that ultimately, the value of a company should be related to fundamentals.
The above analyst does not hide the fact that he once underestimated the value of Tesla . He has been bearish since January 23, 2019, but later he had to raise the target price of Tesla from $170 to $290. "We recognize that we underestimate a key valuation point: investors seem to have an endless demand for alternative/clean cars."
In fact, Tesla has never lacked bears, and the controversy over its stock price and market value has never stopped. However, the company has not stopped since it gained strong support in the Chinese market and started production. At the same time, as the company's own operating performance improves, the market has also given unprecedented generous trust to the new car company.
An analysis by Fortune magazine said that in order to prove that Tesla is reasonable, it needs to achieve an annual revenue of US$204 billion by 2030, that is, sell 3.5 million electric vehicles, each selling price of US$58,000. In comparison, last year, Tesla had revenue of US$24.6 billion last year and was not profitable yet. Although the future direction of electric vehicles is a blue ocean, Musk is also facing huge challenges.
However, for many followers, it is too underestimated to just regard Tesla as a car manufacturing company. In their minds, Tesla 's business and imagination space are far more than car manufacturing, but also include autonomous driving, software, solar energy and other aspects. Even Musk's other projects (such as the recently announced Neuralink, which successfully implanted chips into pig brains) have largely constituted the push to the stock price of Tesla .
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