June 17, 2021

Here’s Why Tesla Stock Just Surged To A Record $780 Per Share

Tesla continues to skyrocket, surging to a new record high of almost $800 per share on Monday thanks to a fourth quarter earnings report last week that topped expectations and a host of Wall Street analysts recently predicting further upside for the stock.

Tesla stock kept up its recent momentum and rose nearly 20% to a new record high on Monday—gaining over $100 and finishing the day at $780 per share.
Monday’s surge in price came after Argus Research raised its price target for Tesla from $556 to $808—among the highest on Wall Street, citing the company’s strong fourth quarter results and rising vehicle sales.
Another boost came from ARK Investment Management updating its valuation model to reflect Tesla’s massive upside potential: The firm believes that the stock could be worth $7,000 per share—and up to $15,000 in the best case—by 2024.
Tesla handily beat earnings last week, reporting its second consecutive quarter of profitability and promising investors that it should continue to be profitable going forward (it is yet to be so on an annual basis).
Tesla, which impressed Wall Street with rising deliveries and a China factory that came online faster than expected, vowed to increase its global vehicle sales by more than a third in 2020—to “comfortably exceed” half a million units, up from 367,000 last year.
Tesla’s shares have steadily risen and moved ever-higher in recent months, as the company works to transform itself from a niche manufacturer into a mass-market electric-vehicle producer. The stock has gained nearly 170% over the last six months alone, far outperforming the benchmark indexes.
Crucial quote: “Despite past production delays, parts shortages, labor cost overruns and other difficulties, we expect Tesla to benefit from its dominant position in the electric vehicle industry and to improve performance in 2020 and beyond,” Argus Research said in its note on Monday.

Big numbers: Investors who bet against Tesla’s stock have been losing droves of money since the beginning of the year—including $2.5 billion on Monday alone. Tesla has more short sellers than any other U.S. stock—18% of its publicly available shares are sold short, according to data from market analytics firm S3 Partners. Short sellers usually borrow shares from a bank and then sell them with the hopes that the stock will go down so they can profit on the difference. But with Tesla, the stock price has steadily trended higher in 2020, forcing short sellers to take losses when buying back shares at a higher price. If too many short sellers buy the stock in tandem, as is the case with Tesla, that can in fact create higher demand and drive share prices even higher, known as a “short squeeze.” Including the $2.5 billion lost by Tesla short sellers on Monday, investors who bet against the electric-vehicle maker are down a total of $8.3 billion so far this year, according to S3.

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