Astounding Burgeon in Tesla's Stock Price

With a recent peak value of $174.7 billion, Tesla was the 30th largest stock in the US. More than $55 billion of Tesla stock was traded on first Tuesday of Feb 2020.This is remarkable because the stock exchange is more than the stocks of tech giants including Apple, Alphabet, Facebook, Amazon and Microsoft. However, there is no reasonable justification for any of this. Competition was tough and the only mollifying news was about Chinese production facility being running but still Tesla managed sustainable profit and the fourth quarter went way better than anticipated. Tesla is by far the biggest stock not in the benchmark so it has a good chance of being included in the index. This could rationalize a pop in the price, may be as much as 5-7% considering past academic studies. However, there is still quandary in the doubling of price in just one month or sinking 17% on the very next day. The desperate attempts made by short sellers to buy stock to exit their position often adds up to such wild escalations in share prices.

Mr. Musk is quite lucid about his preference for private traders over bank analysts. According to him, the retail investors have profound and more succinct insights than many of the hefty institutional investors and relatively better acumens than many of the analysts. The volume of stocks alludes that risky day trading is governing price moves. Qualcomm, one of the best-performing stocks in 1999 turned into a great success but its shares only passed their January 2000 high for the first time three months ago. The advocates of Tesla think that the stock market made an err by pricing the stocks far too low last summer, rather than rashly overpricing it now.

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