Today is June 15th 2023, and Tesla’s stock price has been soaring to new heights in the past month. The electric vehicle maker has added nearly $300 billion in market value since mid-May, reaching a market capitalization of $813.9 billion as of Wednesday. This article will provide a detailed explanation of Tesla’s stock price recent surge, the catalysts behind it and how short sellers are affected.
One of the main drivers of Tesla’s stock rally is the company’s ability to monetize its EV charging technologies and infrastructure. Tesla recently finalized deals with General Motors and Ford to allow them access to its supercharger network, which is the largest and fastest in the world. This move is expected to generate significant revenue for Tesla, as well as increase its competitive advantage in the EV market. Wedbush Securities estimates that the charging-tech deals could add $3 billion of revenue for Tesla by 2025.
Another factor that has boosted Tesla’s stock price is the company’s price cutting strategy in the US and China, which are its two largest markets. Tesla has lowered the prices of some of its models, such as the Model 3 and Model Y, to attract more customers and gain market share. The price cuts have also helped Tesla overcome some of the challenges posed by the global chip shortage and supply chain disruptions that have affected the auto industry. Tesla’s deliveries in the first quarter of 2023 reached a record high of 184,800 vehicles.
Tesla’s stock price surge has also been fueled by the positive sentiment in the tech sector, as investors have become more optimistic about the outlook for growth and innovation. The tech-heavy Nasdaq 100 index has climbed 12% since mid-May, as fears of inflation and interest rate hikes have eased. Tesla, as one of the most prominent and influential tech companies, has benefited from this trend.
However, not everyone is happy about Tesla’s stock performance. Short sellers, who bet against the company’s shares, have suffered huge losses as Tesla’s stock price has risen. According to S3 Partners, a financial data firm, Tesla shorts have lost more than $12 billion in mark-to-market losses for the year. Some analysts have also warned that Tesla’s stock price may be overvalued and due for a correction. For example, Morgan Stanley’s Adam Jonas said that Tesla’s stock price surge may be driven by “speculative forces” rather than fundamentals.
In conclusion, Tesla’s stock price has been on a record winning streak in the past month, reaching new highs and adding nearly $300 billion in market value. The main reasons behind this surge are the company’s deals with GM and Ford to share its supercharger network, its price cuts in the US and China to boost demand, and the positive sentiment in the tech sector. However, Tesla also faces some challenges and risks, such as short sellers who are betting against it and analysts who question its valuation.
