In recent months, Tesla shares have been hit hard. The company continues to face increasing pressure from investors as competition in the electric vehicle market intensifies. The path forward will be challenging for Tesla, so how should investors position their portfolios going forward? Some analysts believe that Tesla is one of the best stocks to buy now. That answer starts with an understanding of where we are now and how we got here. To put things in perspective, let’s take a look at Tesla’s stock history and its future forecast.
The History of Tesla Stock
Tesla began as a tiny Silicon Valley startup in 2003, but the company was able to raise $35 million in its IPO. At the time, that was the largest IPO of any American car manufacturer in decades. Tesla stock began trading on the NASDAQ exchange, and it quickly climbed to a high of $291 per share. However, the bulk of Tesla’s success came from raising additional capital through equity offerings. This allowed Tesla to stay private longer than most companies at the time. In addition to the $35 million raised in the IPO, the company raised $517 million in secondary offerings in 2006 and 2007. Tesla raised $1.19 billion in equity financing before going public again in 2010. The company’s second IPO was a huge success. Tesla shares climbed as high as $29 per share on the first day of trading, and they ended the month with a market cap of $6 billion. Tesla was valued at more than $12 billion after its first day on the New York Stock Exchange (NYSE). The company was able to raise $465 million through the IPO. Along with the rest of the money it raised before going public, Tesla’s total haul was $2.3 billion.
Why is Tesla Stock Falling?
Tesla stock is currently experiencing a significant downturn for a variety of reasons. Chief among them is the fact that Tesla is facing increased competition. The company’s first foray into the auto industry came in 2008, introducing the Tesla Roadster. This was a premium sports car that was priced well above $100,000 per unit. The company followed the Roadster with the Model S, an all-electric sedan. Again, Tesla priced its first mass-market car at more than $100,000. These high-end vehicles have allowed Tesla to remain profitable during the last decade. However, the company’s recent push into new markets has brought it into competition with much larger automotive brands. In 2019, Tesla introduced the Model 3. This was the company’s first attempt to produce a mid-range electric car. The starting price for the Model 3 was $44,000, but investors expected it to sell well beyond that. Model 3 sales proliferated in its first few months, but they soon plateaued. The company is still struggling to meet its production goals for the Model 3, and it’s become clear that this vehicle isn’t bringing in the expected revenue.
What Does the Future Hold for Tesla?
Tesla stock forecast is optimistic and the company is currently one of the most innovative companies in the world. It has a devoted following, and the company continues to break new ground in the automotive industry. But don’t expect the company to slow down anytime soon. Tesla’s current business model is premised on rapid growth, and its stock price is primarily based on expectations of future profitability. These expectations are based on Tesla’s ability to develop new products and roll out new features. This will require significant investment in research and development. In recent years, Tesla’s cash flow has been negative due to its large overhead costs. Tesla is expected to release an all-electric semi-truck later in the year. The company has also promised to roll out a small crossover SUV called the Model Y in 2020. The stock is trading at the time of writing at $703.94, the Dow Jones Today at $31,594, and the Nasdaq at $11,467.
How to Trade Tesla Going Forward
Tesla stock has been a volatile investment, and it’s likely to remain that way. Investors should consider this when deciding how to trade Tesla. In particular, you should avoid holding a position in Tesla stock unless you have the financial flexibility to ride out the peaks and valleys of the market. The best trading strategy for Tesla stock is to keep an eye on the company’s underlying fundamentals. Tesla is currently attempting to ramp up its production of the Model 3, which will be crucial to the company’s short-term growth. Using an upcoming earnings report, you can monitor Tesla’s production goals and key financial metrics. Tesla is expected to release its Q1 earnings report sometime in early April.
Final Words: Should You Buy Tesla Stock?
Tesla is an innovative company with a passionate following. But it’s essential to keep in mind that Tesla is a high-risk investment, and it’s not suitable for every investor. Tesla stock is volatile, and it’s likely to remain that way for the foreseeable future. Investors should be prepared for many ups and downs as the company attempts to meet ambitious production goals, rolls out new product lines, and expands into new markets. If you have the financial flexibility to weather these ups and downs, then Tesla stock may make a good long-term investment. The company’s future is bright, and investors who buy Tesla stock now will be well-positioned to profit from its success in the years ahead.
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