Tesla stock is up more than 4000% since its debut 10 years ago
Tesla went public ten years ago today, pricing shares at $17, higher than its expected range of $14 to $16.
The company raised around $226 million in its IPO, with shares surging that day by around 41% to close at $23.89. Today, shares in the electric vehicle maker closed at $1,009.35, meaning Tesla’s stock has risen by 4,125 % since the close of its first day as a public company.
That stock performance puts Tesla in rarified air, alongside Netflix, which was the top-performing stock on the S&P 500 during the 2010s. (Netflix rose 4,181% between Jan. 2010 and Dec. 2019.
But Netflix shares more than doubled in price between Jan. 2010 and June 2010, when Tesla went public. That means Netflix has “only” gained 2,657% in value since Tesla’s debut.) It also means Tesla stock has outperformed other big tech names like Amazon and Apple, as well as all the major automakers.
The stock has had plenty of ups and downs along the way, including a 30% drop in the month after Aug. 7, 2018, when a CEO Elon Musk tweeted that he had “funding secured” to take the company private.
The SEC accused Musk of misleading the public, as he allegedly knew the funding was contingent, and both Musk individually and Tesla as a company paid $20 million fines to settle the suit.
Since going public, Tesla has never achieved a full year of profitability. The company has reported seven quarters with net income greater than zero, since its IPO — the first was Q1 of 2013.
It has now reported three consecutive quarters of GAAP profit, with some accounting adjustments along the way, and is scheduled to report Q2 earnings next month.
Tesla is now gunning for inclusion in the S&P 500, which requires a minimum of four consecutive quarters of profitability, among other things.
Tesla Inc. has grown from Silicon Valley gadfly to the world’s second-largest automaker by market capitalization in the decade since its initial public offering. It’s been a roller-coaster ride for the electric-car maker’s shareholders, who have experienced dizzying swoons on the way to record highs thanks in part to self-inflicted crises.
“There’s always a lot of drama with Tesla, but they have spurred the auto industry on to embrace electrification as key to the future of mobility,” said Tony Posawatz, the former leader of General Motors Co.’s Volt plug-in hybrid program, ex-CEO of Fisker and current director at Lucid Motors Inc. “Whether they are profitable or not, they have impacted the luxury auto market forever more.”
Tesla no longer makes the Roadster, but it sells four other models in markets around the world. Besides design, one of the company’s biggest advantage lies with its batteries: A version of the flagship Model S now boasts a range of more than 400 miles. No other electric car comes close.
“Their products create a lot of enthusiasm among customers,” Posawatz said.
Ari Wald, head of technical analysis at Oppenheimer, said Monday that one key level should indicate whether the stock has more room to run.
“It still screens positively in our trend work, and for that reason we stick with it,” Wald told CNBC’s “Trading Nation.”
“Here’s a stock that’s trying to break through its February peak. And I think from a trading basis, you like to see the stock price hold above its 50-day moving average at around $900 support if this this breakout is going to occur sooner rather than late.”
“More broadly speaking, we continue to expect these higher-growth companies to receive a premium in this low-rate and low-commodity world so you have top-down portfolio tailwinds to boot. Stick with it,” said Wald.
In the identical “Buying and selling Nation” section, Quint Tatro, president of Joule Monetary, stated he sees it as a inventory that trades extra on religion than fundamentals.
“Tesla simply has this glorious historical past of proving each single particular person fallacious, so it’s totally robust to wager towards this firm – the inventory or [CEO Elon Musk],” Tatro stated. “We have been in the identical camp that we have been in for a very long time — that’s, it is not a elementary play, it’s a play based mostly in your perception in him as a visionary and as an entrepreneur.”
Nevertheless, he added, after such a steep run-up this yr, now could be the time to leap in.
“It pays to essentially purchase this firm within the inventory when it is overwhelmed up and everyone thinks it’ll exit of enterprise after which [Musk] comes and pulls a rabbit out of his hat and it is off to the races,” stated Tatro.