When the brand value in Tesla (TSLA) declined after CEO Elon Musk led cost-cutting efforts at the White House, traders avoided the stock. After Musk left DOGE, TSLA stock buyers emerged. Shares bottomed at $212.11 to close at $426.07.
The breakout in TSLA stock, which began in mid-September, shows no signs of losing its momentum. This is not a short squeeze, since the short float is only 2.89%. Tesla shares are at an eight-month high thanks to CEO Musk buying 2,568,732 shares. He paid between $371 and $397 a share, spending over $1 billion.
The Board approved a new pay package for the prolific CEO. Musk could earn up to $1 trillion, should he meet 12 performance targets. That includes Tesla’s valuation rising from around $1 trillion today to $8.5 trillion over the next decade. Tesla must also sell one million Cyber Cabs and one million robots. Profits must increase by 24-fold compared to last year’s level.
Skeptics should not dismiss those seemingly unachievable targets. Musk is still appeals to investors with deep pockets to raise funds if needed.
Risk
The EV tax credit of up to $7,500 expires later this month. This should hurt Tesla EV sales, yet Rivian (RIVN) and Lucid (LCID) stock are up from their lows. Stock markets are pricing in a rebound in EV unit sales. That suggests that Tesla’s global sales slump could come to an end.
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