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Discussion: Tesla Motors

Tesla Motors is the “it” stock right now in the automotive industry. Tesla was a pioneer in offering cars that run 100% on electricity rather than gasoline, and it has also diversified into solar energy, purchasing the company SolarCity. Its stock price has risen high enough in recent years that it has surpassed automobile giant General Motors in market valuation.
However, not all analysts believe Tesla is a good investment at its current price. It sells less than a 100,000 cars per year, compared with General Motors which sells around 10 million cars a year. Unlike General Motors, Tesla has yet to earn a profit.
Here are some articles both pro and con about whether you should invest in Tesla. Take a look at these articles and also try to find some more recent articles on Tesla’s stock:
https://www.forbes.com/sites/johnwasik/2017/04/14/5-reasons-why-tesla-is-bubble-priced/#d0626b26c631
https://www.smarteranalyst.com/2017/03/16/5-reasons-excited-tesla-inc-tsla-stock/
Based on what you’ve read, do you think Tesla is worth its high valuation, or is it simply priced too high because it is considered new and trendy? Would you personally invest in Tesla, or would you prefer to invest in one of the more established auto companies such as GM or Ford?
 
Response 1
 
I would say that any stock has some level of inherent risk. There are in my opinion several indicators that Tesla is diverging from the normal automakers and could have the potential to continue to grow money for its investors. The move to acquire the solar energy provider solar City in 2016 (smarteranalyst.com) shows you the diversity potential of Tesla period solar is popping up on rooftops across America every day and it is not a trend that is going to go away anytime soon.
Even with Americans buying SUVs and pickup trucks in a much larger quantity than electric vehicles (Forbes.com 2017) does not mean that the culture is in Europe and China who appreciate alternative transportation methods will not grow at a larger rate. Tesla’s acceptance into the s&p 500 in December of this year (Investees.com 2020) will definitely spark more interest and investors two Tesla motors if you went back 120 years I’m sure somebody was sitting around talking about when the first automaker started making horseless carriages. Someone who invested in Henry Ford motors their first five years in production would probably have a large heap of money right now.
 
Phil
 
References:
https://www.forbes.com/sites/johnwasik/2017/04/14/5-reasons-why-tesla-is-bubble-priced/#d0626b26c631
https://www.smarteranalyst.com/2017/03/16/5-reasons-excited-tesla-inc-tsla-stock/
DEAGON, B (2 Dec 2020) Is Tesla Stock A Buy Right Now? Here’s What Earnings, Charts Show https://www.investors.com/news/technology/tesla-stock-is-it-a-buy-n
 
 
 
 
 
 
 
 
 
Response 2
Tesla has reached new heights and recorded highs in value.  Stocks surge was based on investors betting on Tesla will help broaden consumer appeal for electric cars and leave room for smaller brands to thrive.  Tesla is profitable even as it spends on motivated global expansion, and companies like GM are lagging on the shift from gas guzzlers to electrification.  The company lead has triggered GM to accelerate electric car rollouts and invest money in Nikola Corp to attract buyers and maintain pricing profitability.  Since the pandemic, Tesla stock split 5-for-1, rising stock prices 18% and has a composite rating of 99% out of 99.  Meaning the stock outperforms 99% of all stock—Tesla jumps 50 lines since the company announcement of being added to the S&P 500.  The stock is extended from its buy zone at 466, 5% above entry point and considered risky but offer a tangible potential reward.  I would invest in Tesla for a short-term spread. The trading spread is trading around $2.05, which means the seller will receive $205 in option premium and a risk of $295.  Tesla stock has a potential of 69.49% return risk in one month as long as the stock stays above 420 and does not fall below the 50 days moving average.
 
McMASTER, G. (2020, November 18). A Potential 69% Return In One Month For Bullish Option Traders On Tesla Stock. Investors Business Daily, N.PAG.