Tesla in Wall Street’s favor? Blink and you might miss it.
If you’re an investor that owns Tesla stock, don’t blink. Because depending on what day of the week, or even hour of the day it is, Wall Street sentiment toward the company is likely to change.
The latest example of that came on Tuesday, as Tesla’s shares climbed as much as 5 percent, to almost $263, after Macquarie analyst Maynard Um started his coverage of the company with an outperform (the equivalent of buy) rating, and a price target of $430 a share.
If that number stands out, well, it should. Because Um’s view of Tesla values the company’s stock at more than the $420-a-share price that Tesla Chief Executive Elon Musk suggested, in August, he wanted to take Tesla private. That was also the amount that Musk mentioned in his now-famous “funding secured” tweet, which eventually got him to agree recently to step down as Tesla’s chairman in a deal to settle fraud charges with the Securities and Exchange Commission.
For a company that had seen its market value decline by $10 billion in a week, Tesla has become a test case of its investors’ nerves. On Monday, Tesla’s shares fell by 4.3 percent after noted investor David Einhorn compared Tesla to Lehman Brothers, the investment bank that famously collapsed during the financial crisis of 2008. Last Friday, after Musk tweeted out the SEC should be called the “Shortseller Enrichment Commission,” Tesla’s stock price fell 7 percent by the close of trading.
But things changed in Tesla’s favor Tuesday, as Um said that Tesla’s product differentiation makes it “a disruptive technology company” in energy storage and energy generation, in addition to its trademark electric car, such as the Model 3 sedan. Um said one of the benefits Tesla has in its favor is that it controls the software that makes …read more
Source:: The Mercury News – Business