This last week saw a 33% increase in Tesla stock, the second-highest weekly performance on record and the greatest since May 2013.
On Friday, the stock increased 11% to settle at $177.88. The uptick came after a six-month slide in Tesla share prices of more than 40%. In Tesla’s more than twelve years as a publicly traded corporation, the stock’s 65% decline in 2022 was its worst. An encouraging fourth-quarter earnings report contributed to Tesla’s rise this week. Elon Musk, the business’s CEO, stated on a conference call with investors and analysts that the company was on track to perhaps create 2 million vehicles in 2023 and that he believed demand would also support sales of those vehicles.
According to official estimates, 1.8 million vehicles should be produced this year. The corporation hasn’t changed its long-term objective of a 50% compound annual growth rate over a period of several years. Tesla recorded total revenue of $24.32 billion, including $324 million in deferred revenue linked to Tesla’s driver assistance systems, beating both the top and bottom lines. In December and January, the corporation drastically reduced the price of its cars, raising questions about demand and an increase in inventory.
Analyst responses to Tesla’s data were mixed.
For bulls, the growth thesis is still relevant, according to Bernstein’s Toni Sacconaghi, who rates the company with an underperforming recommendation. “The numbers don’t lie for bears.”
Tesla disclosed fourth-quarter vehicle deliveries and production that fell short of estimates at the beginning of January. Tesla’s shares increased in tandem with a larger market upturn. The Nasdaq rose 4.3%, while the S&P 500 rose 2.2% for the week. The shares of other American manufacturers of electric vehicles increased. While shares of venerable automakers Ford and General Motors each increased by more than 7% over the week, Rivian increased by 22%. On Friday, Lucid, a rival producer of electric vehicles, also experienced a surge, gaining 43% in response to speculations that Saudi Arabia’s Public Investment Fund intended to take the business private.
Musk’s decision to focus on Twitter, which he bought for $44 billion in October, was partly responsible for Tesla’s poor performance the previous year. Twitter has seen widespread layoffs and relocating advertising, severely impacting morale. Tesla remains the second-most shorted company on the American stock market, behind only Apple, which indicates that many investors are betting on a drop. S3 Partners data shows that over 94 million automaker shares are shorted.
Ihor Dusaniwsky, the managing director of S3, claimed that active short selling has continued despite the rebound. According to him, short sellers believe that Tesla’s growth has produced “an overheated and overbought stock that is destined for at least a short-term correction.” S3 Partners reported a 3.9% increase in total shares shorted during the previous week, while investors who had been shorting the stock had lost $4.3 billion.