Tesla is one of the many companies that is increasingly gaining traction in changing the way people do things, and the EV firm’s success has not gone unnoticed. Since its IPO, its shares have risen by over 1000%. Therefore, it is a great investment, but it is really important for shareholders to keep in mind that the primary objective of the firm is to achieve its vision rather than pleasing them.
Tesla – a bad bet?
Tesla shares were near $300 in September 2014, and many optimists on Wall Street believe the company is heading for $450. On the other hand, bears expect the stock to decline to the mark of $150. However, Tesla is believed to be little bothered about how people view its stock. Though share prices are a major source of funding for Tesla, it gives more priority to changing the world.
“Tesla sees its stock price as at best a nice piece of leverage for raising capital,” says a report from Business Insider.
Tesla has a mission of ending the dependency of the planet on fossil fuels. The EV firm holds great potential for investors, but despite that, many analysts believe the company has become a bad bet because of its views.
Losing more per car
The fact that the electric automaker is rapidly scaling up its production is resulting in a massive outflow of money, explains John Pangere of Windy City Advisor. It is relentlessly spending cash flow on growth.
It will be very easy for Tesla to achieve a medium-term profit if it puts the brakes on production, but the company is laying more focus on speeding up purchases. Tesla wants the maximum possible number of people to use clean energy, but this comes at a huge cost for investors.
“Tesla may be setting sales records. But the company is also setting records of a dubious nature as well,” Pangere said. From a loss of $15,975 per car in earlier quarters, the EV firm has lost around $19,810 per car in the last quarter. In the third quarter of 2014, this number was $9,956, says Pangere.
On Friday, Tesla shares closed down 4.43% at $217.02. Year to date, the stock is down by over 2%, while in the last one month, it is up by almost 5%.