For the last few months, it feels that the light has shone more brightly on Tesla’s CEO, Elon Musk, instead of Tesla itself. Musk has involved himself in the cryptocurrency space a lot, and in the space industry too. Tesla seems like a side hobby at this point, and the same can be said for the EV company’s stock, too. It’s been floating around the 700 level for quite some time, and there hasn’t been a piece of news that could catapult it. However, the sleepy giant can wake up whenever it wants, and it chose to do that in the last few weeks.
Tesla’s share price has been climbing rapidly in the past 5 days, going from 700 dollars to about 900 dollars per share, following market momentum. On Monday, the catalyst arrived, and it came from none other than bankrupt rental car company Hertz. Yes, Hertz, the first meme stock per say when it rapidly rose during fears of bankruptcy in the middle of 2020. Hertz announced that they would order around 100,000 Tesla vehicles, which would provide mainstream drivers the opportunity to rent a Tesla for whatever the fee is. Hertz is trying to redo themselves, and one of the goals is to spend a lot of money on alternative energy vehicles as that is the future. The purchase added more fuel to the fire, and Tesla reached multiple milestones. First, they broke the 1,000-dollar barrier, with their share prices closing above the mark as the day finished. Nobody would’ve predicted that Hertz would ever be the cause of the 1,000 mark, but we are living in crazy times. Second, and the most important one, was Tesla’s market cap reaching the 1 trillion mark, which is a super exclusive club. Only companies like Amazon and Apple stand at that point, and it was crazy to see a car company briefly join the club before it dipped a little bit. Musk, being himself, questioned why the valuation of the company rose, but investors didn’t care this time, and his net worth increased in the end. Who knows, maybe Cathie Wood’s prediction about Tesla could become correct! Do you think this rally will continue?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.