Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money

70% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • Updates
  • disruptive innovation
  • electric vehicles

Should Investors Be Watching Any Dip In Tesla's Share Price?

Elon Musk appeared in the 2015 episode of ‘The Simpsons’, ‘The Musk Who Fell to Earth’. The anniversary of that episode was this weekend, and with it comes an interesting figure. If you had invested $1,000 in Tesla (NASDAQ: TSLA) when Musk appeared in that episode six years ago, you’d be sitting on $15,481.90 — a gain of 1,447% with stock splits taken into account. 

This article was originally written by MyWallSt. Read more market-beating insights from the MyWallSt team here.

That figure should be in investors’ minds when thinking about the company’s performance year-to-date. 

 

Why is Tesla’s stock price underperforming?

Labeling Tesla’s stock price as ‘underperforming’ needs to be looked at with context: the company’s stock has soared a massive 740%, with EV sales jumping to just shy of 500,000, smashing previous records. 

In 2021, however, it’s a slightly different story. At the time of writing, its share price has dropped almost 15%, and that’s despite a 7% jump in the past month — so a recovery looks to be on its way. 

This underperformance, in comparison to 2020, is mainly due to overall market sentiment towards growth stocks, inflation fears that are encouraging investor volatility, as well as a number of production issues for Tesla. In addition to the numerous recalls, it is also struggling to produce enough cars given the global chip shortage as well as COVID-induced delays.

 

Former Tesla president sells shares

Some investors have been feeling some worry after it was revealed that long-time Tesla executive and former President, Jerome Guillen, sold an estimated $274 million worth of shares after exercising stock options since June 10.

“It could raise some eyebrows for investors,” Wedbush Securities analyst Daniel Ives said, adding that investors are going to watch closely to see if he sells more.

Normally, investors should not pay too much attention to such insider trading if it is inconsistent. However, Guillen’s departure earlier this month, immediately after being made president of Tesla’s trucking unit, has sparked market concerns about Tesla’s future vehicle programs like the semi-electric trucks and its new batteries called 4680 cells. 

 

Should investors be worried? 

Tesla might not have reached its 2020 goal of selling half a million vehicles, but it was only by a whisper and it will certainly meet and exceed that number in 2021. In Q1, it sold nearly 183,000 vehicles and the company is predicting annual growth of 50% in vehicle deliveries. By 2030, the company is expecting to sell 5 million vehicles annually.

With a 17% global market share and an expected EV penetration of 40%, it’s not unreasonable to assume Tesla will meet this objective and earn $175 billion in revenue from auto sales alone. 

 

MyWallSt gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team posts daily insights, subscriber-only podcasts, and the headlines that move the market. Start your free trial now!

 

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Continue reading for FREE

  • Includes free newsletter updates, unsubscribe anytime. Privacy policy

Free ebook

Tricks of the trade: 7 interviews with the world’s top traders

Get it now

Related articles