Tesla Motors’ Stocks Overvalued, Analysts Warn
Tesla Motors’ unprecedented price surge sent Wall Street investors on a trading frenzy.
Since the start of the pandemic, the firm experienced skyrocketing prices. Even when its competitors in the EV field filed for IPOs one after the other.
Its explosive growth in the year made it one of the most followed stories in the stock market.
It even offered a generous five-to-one stock split at the end of last month to appeal to small, individual investors.
However, analysts warned that the Elon Musk-owned firm is a “house of cards” bet, waiting to fold in no time.
So far, it surged at a speculative rate of 800% climb from last year’s figures.
After its stock split offering, the firm recorded successive setbacks after trading in the red for four consecutive days last week.
Tesla remains to have weak fundamentals, including a limited market share.
In Europe alone, it failed to secure a spot on the top 10 manufacturers by market share. This was mainly due to law-related restrictions in the region.
Europe’s law currently incentives its leading car manufacturers to produce hybrids and electric cars, making the path narrow for the California-based firm.
Tesla Updates: S&P 500 Said No
Of all the Tesla updates that investors were quite sure to hear this year, it would be the company’s inclusion to the S&P 500.
Analysts predicted that the firm would secure a spot in the coveted Wall Street index this year after skyrocketing prices in the stock market.
However, the S&P 500 added three new names in its roster but not Tesla Motors.
The decision shocked investors, including experts in the field, since the EV manufacturer recorded a four-consecutive quarter of profitability, one of the index’s main requirements.
Among the new addition is the pharmaceutical company Catalent Inc., the e-commerce website Etsy, and Teradyne.
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