Tesla Motors Inc (NASDAQ:TSLA) stock hit a new high of more than $180 per share today as the market got buoyant in the wake of a Federal Reserve taper tamp. Shares in the electric car maker are up more than 8% in today’s trading alone. Part of the impetus for the increase was provided by a new Deutsche Bank report which bumped the price target on the stock up 25%.
The Deutsche Bank report cited the strides Tesla Motors Inc (NASDAQ:TSLA) is making in improving its gross margin and the possibilities the future holds for the electric car maker as reasons for its raising of the price target on the company. Tesla Motors Inc (NASDAQ:TSLA) is now worth close to $22 billion, more than Mitsubishi and Fiat combined.
The Bedford Park Opportunities Fund returned 13.5% net of all fees and expenses in the second quarter of 2021, bringing its year-to-date return to 27.6%. Q2 2021 hedge fund letters, conferences and more In the fund's second-quarter investor letter, which ValueWalk has been able to review, Jordan Zinberg, the President and CEO of Bedford Read More
Telsa stock boom
Today’s rise in the value of the company puts its growth for the entire year at just over 430%. The company has become one of the hottest stocks on the market because of its capacity for disruption, and the charismatic genius of its CEO Elon Musk. Stock in the company had leveled off for the last month as taper talk lowered returns for the entire market.
Yesterday the Federal Reserve lifted the threat of QE tapering for the next month, and possibly longer. The crisis in Syria seems to be over for the United States, and the world seems much calmer as a result. This morning investors hit the market willing to throw some money around. One of the first reports they saw was the DB write up on Tesla Motors Inc (NASDAQ:TSLA) and money was thrown.
Tesla Motors Inc (NASDAQ:TSLA) has been the target of a huge amount of short interest, and it’s been the target of a lot of bubble talk. After the stock traded sideways for a few weeks, it seemed that some of the bubble talk had shut down. After today’s rise there will likely be a resurgence in Tesla bashing.
Tesla bubble bounce
Tesla Motors Inc (NASDAQ:TSLA) investors are basing the entire value of the company on speculative predictions about the company’s future. The company certainly has the ability to hit the highs predicted for it in the next five or ten years, but that doesn’t mean investing in the company is safe.
At a price of $180 per share and volume of around 12 million today, a lot of people are spending a lot of money on Tesla Motors Inc (NASDAQ:TSLA) shares today. The Deutsche Bank report put a price target of $200 on the stock in anticipation of the next earnings report, but analysts don’t have a perfect record.
The problem with bubble talk is that it makes a lot of sense. Those who see a bubble in Tesla Motors Inc (NASDAQ:TSLA) are not even talking about electric cars or Elon Musk. they’re talking about the stock market. The stock market has gone crazy about Tesla Motors Inc (NASDAQ:TSLA). People won’t be all that surprised if the bet works out over the long run. The risks in the short and medium term are to much to bear for many, however.