fbpx
StashLearn
Get started
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Money News

Tesla Speeds Past Stock Market Record

February 10, 2020
Tesla

3 min read

Tesla entered 2020 recharged and ready to hit the road.

The electric car company’s stock price increased by 20% on February 3, 2020, making the biggest jump for Tesla in six years. The spike followed Tesla’s positive fourth-quarter earnings which were announced at the end of January, 2020. Tesla remains one of the largest players in the growing electric vehicle industry.

What happened? 

On February 3rd, when the market closed, Tesla’s stock price was at a record high of $780 a share, according to Forbes. The 20% jump marked Tesla’s biggest bump up since May 9, 2013. Tesla’s stock price has increased 120% since the beginning of February, 2019. The price continued to increase on February 4th, 2020 to $887 by the end of day. 

In response to the rally, some analysts have suggested Tesla’s stock price could hit $7,000 by 2024, according to Barron’s.

Tesla stock has been publicly traded on an exchange called the Nasdaq since 2010.

Why the jump?

One reason for the price spike could be Tesla’s better-than-anticipated earnings for the fourth quarter of 2019. Tesla reported $7.4 billion in revenue for the fourth quarter of 2019, a 17% increase compared to the third quarter of 2019. Tesla also announced a net income, or profit, of $105 million for the fourth quarter.

Production of Tesla’s Model Y, the latest SUV from Tesla, is also reportedly ahead of schedule. Tesla’s factory in Freemont, California, is expected to be done building the new car by April 2020. The Model Y is expected to be a little cheaper than the previous SUV from Tesla, the Model X.

Tesla delivered 367,500 cars in 2019. The number of cars delivered increased by 19% between 2018 and 2019 and Tesla plans to deliver 500,000 cars in 2020.

Another reason for the jump could be a practice called short selling, according to the Wall Street Journal. When investors short a stock, they hope to profit from the falling value of its share price. Investors who short sell are betting against a company’s stock. In this case, Tesla’s stock has risen, so short shellers may have to buy Tesla stock to prevent further losses in their positions, according to some reports. That has driven the stock price up even further.

More about Tesla and Elon Musk

Tesla’s recent success comes more than a year after the Securities and Exchanges Commission fined Elon Musk $20 million in September 2018. The SEC also forced Musk to step down as chairman of Tesla after he tweeted that he would take Tesla private. The SEC said the tweet was false and misled investors. 

Musk, who has remained the CEO of Tesla, is considered one of Silicon Valley’s most brilliant and innovative entrepreneurs. In addition to co-founding the payments company Paypal, he also founded the space exploration and transportation company SpaceX.

The rise of electric cars

Electric cars, which operate on batteries that can be recharged at charging stations, are increasingly affordable and popular. To compete with Tesla, U.S. car companies including Ford, General Motors, and Fiat Chrysler, have announced plans to develop their electric car businesses.

The automotive industry still has a long way to go to become less dependent on gas. While sales of electric cars increased by 81% in 2018, there were still only 1 million electric cars on the road. Nearly half of all car sales in the U.S. in 2018 were reportedly for SUVs.

Investing in the planet

Still, climate change is an increasingly important topic for businesses such as Tesla and other car manufacturers. Stash offers ETFs that include clean energy companies and companies that are working to reduce their carbon footprints.

When you invest, remember to follow the Stash Way, which includes regular investing, diversification, and planning for the long term.

Welcome to your new financial home.

Start today with any dollar amount.

Get the App

Hooked on Stash? Tell your friends!

Get $5 for every friend you refer to Stash.

Refer friends

Hooked on Stash? Tell your friends!

Get $5 for every friend you refer to Stash.

Refer friends

By Claire Grant
Claire is a content writer for Stash.

Investment Profile

Legal Cannabis Industry

Get all the details on investing in marijuana and the cannabis industry legally.

Learn more
Explore more articlesChoose a topic to learn more about
Retirement Technology Careers love and money pop culture
Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.