Today’s leaders of the stock market are innovative companies of “tomorrow” that managed to present something new to the society and shareholders – products with advanced technologies that have changed social life, social interaction and the very essence of the consumer product beyond recognition.
Tesla is certainly one of such leaders, their offspring can safely be called a hybrid of a smartphone and a luxury car. Most of the cars are sold via pre-orders, which seems impossible for cars of this price class, and the shares in a loss-making corporation that does not pay dividends sell like hot cakes.
The Rise of the Giant
The reason for such an excitement around the company is its founder. Elon Musk and the first roadster Tesla, as well as other electric cars of US start-up corporations, were subjected to sophisticated criticism. The auto giants, through joint efforts and government lobby, tried to strangle the competitors at the very beginning. Even Jeremy Clarkson known to all car lovers as TopGear host, made fun of the first electric car Tesla on the air more than once.
However, the difference between Musk and his competitors was the persistence and belief in his dream. And in 14 years, the company produced 25,000 cars and reached capitalization of 51 billion dollars, leaving behind Ford with 7 million cars and General Motors with an annual 10 million cars.
In seven years, the company’s share price has grown more than 17 times
At the New Start.
In June 2017, the new flagship Tesla electric car is planned to be launched. Elon Musk has imposed a ban on short-term earnings, investing the proceeds in research and construction of plants in Europe (Slovenia) and China.
The new car is twice cheaper than its predecessors, the expected number of pre-orders is 400,000, which is 200 times more than the demand for the previous models.
To match the launch of the new model, the project of a network of high-speed electric stations in Europe, Russia (Moscow) and on the southern coast of China is being actively implemented. And the battery plant built in a joint project with Panasonic will ensure the growth of production for cars of all brands.
Zugzwang to Car Manufacturers from Elon Musk
Shares of car parts manufacturers in America and Europe are falling as fast as Tesla shares are growing. Musk’s cars only have 18 auto parts. Many parts are simply not there.
Not surprisingly, there is an increased interest in the securities of this company today. Elon Musk and Tesla have promoted three models of electric vehicles in just 7 years, opening the way to the market for more than 20 new brands, which only strengthened the position of the pioneer in the field of car engineering. This can be called the iPhone effect – the more competitors produce, the better the original models will be sold. Only, unlike Jobs, Elon Musk is not retiring and is about to supersede NASA in the field of spacecraft production.
An Insight from Speculative Traders
An average user of much more mundane technologies can benefit from the success of Elon Musk and his corporation. After the presentation of the new model, Tesla share price went down. In spite of this, institutional investors like BlackRock, JP Morgan, Invesco, Allianz Asset Management and others, increased the company’s share in their portfolios, having raised the rate before the publication of reports on the company’s performance for the previous year and the new quarter.
Following their example and a competent trading strategy, a reasonable investor with long-term goals with an access to the stock market through a reliable broker partner will buy a couple of shares that have become cheaper amid an “unjustified panic” decline of the shares.
The seasonal spring drop in stock markets is an ideal time for the purchase of Tesla’s “forward-looking” shares. After that, you can only wait patiently and smile with satisfaction at the growing asset price and your profit from the new victories of Elon Musk and his legendary corporation Tesla.
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