Tesla at $2,000 a share? Easily!

One of the most high-profile and hype stories of the stock market in recent days is the insane growth in the capitalization of Tesla, thanks to which the shares of the newly minted auto giant updated their all-time high, testing the high of $1,790. At the time of writing, the stock has pulled back to the $1,500 region, however, it still retains the potential for a continuation of the bullish rally.

Back in early June, Tesla gave $800 per share, and today it is already 87% more. Back in early June, the company's capitalization was about $140 billion, and today Elon Musk can rightfully say that his company has become more expensive than Toyota in just a month, reaching a capitalization of $277.5 billion.

Excursion into history

Tesla (formerly Tesla Motors) is an American electric vehicle manufacturer. The company was founded in July 2003 by Martin Eberhard and Mark Tarpenning, but the company itself considers Elon Musk to be its creator. At the first stage, it was he who invested the most, investing $ 70 million earned on the sale of his stake in PayPal. Named Tesla in honor of the world famous electrical engineer and physicist Nikola Tesla. Unlike most automakers, Tesla does not sell cars through independent dealers. As a rule, Tesla showrooms are just demonstration areas, and the purchase is made directly through the Tesla website.

• In June 2010, an initial public offering (IPO) of the company's shares took place. For 9 years, Tesla has shown a net annual loss. The largest losses occurred in 2017, amounting to $2.24 billion. Despite this, the company's market capitalization continued to grow from year to year, and in 2018 reached $65 billion. As noted above, at the moment it is $277.5 billion, i.e. 4.26 times more than in 2018. Just imagine, sitting in the papers of this “technological upstart”, you could earn 420% of the income, and in just 2.5 years.
• After another bad 2017, 2018 has arrived. Even despite the success in production and sales of the Model 3, which became the best-selling car in the United States in terms of revenue and the fifth in terms of number, the total losses in 2018 amounted to about $976 million. The situation did not change in 2019: according to the results of the financial year, the company amounted to $862 million. Thus, for the period from 2010 to 2019, the company never made a profit, remaining unprofitable. In the I quarter In 2020, the company's revenue amounted to $5.985 billion, and net profit was $16 million. So what was the main driver of the latest growth, especially considering that the performance of the 1st quarter of 2020 cannot be called promising?

It's all about predictions

In early July, Tesla reported on the number of vehicles produced and sold in the second quarter of fiscal 2020. In the three-month period from April to June, Elon Musk's car company delivered about 90,650 cars to customers, well above analysts' expectations – Wall Street estimated deliveries at 72,000. With more than 90,000 vehicles shipped in the second quarter, Tesla surpassed the previous record quarter of deliveries of 88,400 vehicles. It can be argued that the result of the second quarter is lower than a year ago, when about 100 thousand cars were shipped and the indicator of 112 thousand cars delivered in the fourth quarter of 2019, what then is the success?

It is very important to understand under what conditions Tesla continues to ship its cars today. When the whole world fell victim to the coronavirus pandemic, which collapsed consumer activity, Tesla managed to beat forecasts for deliveries by almost 30%. It's so phenomenal that it's hard to believe. This is an achievement, especially against the backdrop of a catastrophic decline in other manufacturers. For example, in Audi, car sales in the second quarter sank by 30%.

A detailed report with final financial results will be published on July 22, after which it will be possible to take a look at the updated financial results of the company. Tesla plans to put more than 500,000 vehicles on the market this year. For the first time in 10 years, Elon Musk's company has a very good chance of getting into plus, showing profit at the end of the year. Tesla has had only seven profitable quarters in history, but the manufacturer has never shown a profit at the end of the year. If this happens, we will definitely see new highs.

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