Tesla Stock (NASDAQ:TSLA)
Investors who have been waiting for the overhang caused by Tesla’s Twitter account to be lifted no longer need to do so. It no longer exists.
Investors can finally breathe a sigh of relief now that their CEO has been reinstated. They are now in a position to begin planning for the future of the company and the stock it produces.
On Friday, shares of Tesla (NASDAQ:TSLA) increased by 1.8% to close at $180.14. This compares to a loss of 0.1% and 0.2%, respectively, for the S&P 500 and the Nasdaq Composite. Since Elon Musk tweeted on May 11 that he had found a new CEO for Twitter, the company’s shares have increased by almost $12, or approximately 7%, thanks to Friday’s gain.
The company’s annual meeting of shareholders, at which Musk reaffirmed his commitment to running his car company, was a major factor in the stock price increased by more than 7% over the course of the week.
Investors breathed a sigh of relief at that news, and the appointment of a new Twitter CEO was the stock catalyst they had been anticipating. Musk conducted a poll on Twitter in December, asking users to vote on whether or not he should step down as CEO of his social media platform, and 57.5% of respondents selected “Yes.”
After an interim period of a few months, Linda Yaccarino will now assume leadership responsibilities at Twitter. Gary Black, who was also a shareholder in Tesla and the co-founder of Future Fund Active ETF (FFND), believed that a new CEO was worth three to five percent of Tesla stock, which is roughly five to eight dollars. A new chief executive officer may be worth $15 to $20 per share, according to the projections of Dan Ives, an analyst at Wedbush. The difference between the two would be approximately $12 if it were split between them, which is exactly what has already happened.
For Tesla investors to anticipate more would be a bit of an overreach on their part. Prior to October, when Musk took control of Twitter, the price of a share of Tesla stock was approximately $225. Shares are still roughly 20% below that level, but many things that are not related to Twitter have occurred in the meantime. To begin, Tesla has repeatedly reduced prices around the world, which has put pressure on profit margins as well as earnings estimates for 2023 and 2024 on Wall Street.
Higher interest rates have made it more difficult for people to afford vehicles, which has led to difficulties for other automakers as well. Since October, the price of Ford Motor (NYSE:F) stock has decreased by approximately 10%.
Now is the time for investors to search for additional catalysts. Black is looking forward to a few upcoming events, including the Federal Reserve pausing rate increases, which he believes will happen in the third quarter, the launch of the Cybertruck coming in the second half of 2023, and a Tesla stock buyback, which he says could come in the fourth quarter. All of these events are expected to take place.
Before those three things are likely occur, Tesla will report their earnings and shipments for the second quarter of the year. It is anticipated that shipments will begin on July 2nd. Wall Street anticipates a number closer to 445,000 units, which is an increase from the approximately 423,000 units delivered in the first quarter. After that, there will be a few weeks of reporting earnings. The consensus among market analysts is that the company will post earnings per share of approximately 80 cents and operating profit margins of approximately 11%.
In a purely mathematical sense, Tesla stock is currently trading higher than both its 50-day and 100-day moving averages. Frank Cappelleri, founder of CappThesis and a technical analyst, predicts that the recent rally in Tesla share prices may come to an end between $180 and $190 per share. He is not making a decision that is of the utmost importance. He is examining stock charts in order to get a feel for the way investors are thinking about the company.
Be prepared for a potential pause in Tesla’s stock price. Before making any additional adjustments to their Tesla positions, investors will most likely wait until the deliveries are reported in a few weeks.
The information that Tesla reports in the following months will determine whether or not the stock can break above $190 or retests technical support around $155.
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Featured Image: Unsplash @ Tesla Fans Schweiz