Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (2024)

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Matthew DeBord

2017-02-18T17:24:00Z

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (1)

Reuters/Mike Blake

Tesla is headed into fourth quarter and full-year 2016 earnings next week with arguably the biggest head of financial steam in the company's history.

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A surprise profit in the third quarter last year, coupled with Donald Trump's win in the election and the assumption that an America-first manufacturing policy favors Tesla, has sent shares on an epic rally. The stock has risen as much as 50% of the past three months, surging toward $300 and ending last week above $270.

Tesla has watched its stock soar in the past, only to reliably plummet — or, if not that, the revert to trading levels that don't register a $40-billion-plus market cap, right up their with the Ford Motor Company, but something close to $30 billion, which in the assessment of many market pros is, frankly, bonkers for a carmaker that sold only about 80,000 vehicles in 2016.

The roller-coaster ride that is Tesla investing has certainly been intense, but over the past two years some interesting new patterns have developed. It's also worth taking into account that Tesla financial reporting and market value have gotten far more complex with the 2016 acquisition of SolarCity for just over $2 billion, a price that also bought Tesla billions in debt.

I thought it might worth it to take a look back at Tesla's history — a story in stock charts:

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The Model S launch was a defining event for Tesla. This would mark the beginning of Tesla's Wall Street story, the tale of a rapid-growth tech company. But ironically, it would also mark the moment at which Tesla started to become a car company.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (2)

Reuters/Noah Berger

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Over the past three years, however, Tesla's stock story has been one of extreme volatility: spikes and swoons.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (3)

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Because Tesla took off so fast as a stock and quickly achieved an impressive market cap for a company that, in 2013, was selling almost no cars (even if the ones it was selling cost more $100,000 apiece), a stable price wasn't in the picture.

Investor confidence would soar, then collapse, with sentiment turning on ever news event, product announcement or delay, quarterly earnings report, and market-moving Muskian tweet.

Rapid run-ups were followed by jerky declines. Jagged recoveries presaged vertiginous descents. At one point, Musk himself said that the company was overvalued. Unlike the rest of the industry, with its slow, predictable stock behavior for publicly traded carmakers, and with its long business cycles, Tesla was behaving more like a Silicon Valley tech company.

Analysts fixated on the pace of deliveries as the best indicator of how Tesla was performing and whether there was sufficient demand for Tesla electric cars, in a market that otherwise didn't seem to want them, to justify the monumental valuation. Eventually, Tesla began reporting quarterly sales, mainly to give Wall Street something to go on.

The initial "Wow!" of the Model S also began to encounter some speed bumps, as publications such as Consumer Reports both enthused over the vehicle and noted some drawbacks. Tesla also spent years figuring our how to build the car at scale — the learning curve was much steeper than it should have been for an automaker in the 21st century.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (4)

Flickr / Steve Jurvetson

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That leads us to the past 12 months.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (5)

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In 2015, the long-awaited Model X SUV was added to the lineup, enhancing sales and giving Tesla a vehicle to use to compete in the booming crossover market. But the Model X arrived three years late, and its tremendous complexity meant that Tesla spent the first half of 2016 sorting out myriad production issues.

Some compensation arrived in the form of the reveal of the Model 3 mass-market vehicle — $35,000 before tax breaks, with a 200-plus-mile range on a single charge. Tesla quickly racked up 373,000 pre-orders for the vehicle, at $1,000 a pop.

Meanwhile, Tesla had steadily improved the Model S, culminating in the P100D, whose blistering acceleration gave a better 0-60 mph time than many supercars. A massive Gigafactory battery plant was opened in Nevada, a new energy storage business was rolled out, and the SolarCity acquisition happened.

Wall Street was losing the thread, however. Tesla wasn't a very good car manufacturer, consistently missing its deliveries guidance, and investors began to figure this out. While the tech side of Tesla was doing some stunning stuff with Autopilot self-driving, a driver died in an accident while using the system in 2016, leading to uncertainly about Musk's ambitions.

The wild volatility had briefly faded, only to return. And until the tail end of 2016, Tesla was enduring a slow stock slide. Fortunately for Musk, the company has executed a capital raise before the skepticism set it.

So with the Model X, Tesla at last had two vehicles to sell. But he stock was still a challenge to figure out.

Justin Sullivan/Getty Images

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Here's a look at the past six months. As you can see, while 2016 was coming to a close, a sense of weariness about Tesla had set in among investors.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (7)

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Everything calmed down, but then ...

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (8)

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Frankly, it's disturbing.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (9)

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This isn't what we're used to seeing from Tesla shares. The timing is also out-of-character.

Tesla's pattern is to miss deliveries while increasing production, raise concerns about cash-burn relative to Musk's ambition to be selling 500,000 vehicles annually by 2018, and see the stock take a dive early in a year.

Usually, the recovery doesn't arrive until halfway through the year, once Wall Street draws a bead on how the deliveries guidance will shape up for the full year.

The only major thing that's changed for Tesla since the end of 2016 is that Trump is President and Musk has the Donald's ear (he's on two White House committees). Is that really enough to yield a 50% rally? And a pretty uneventful one, at that?

You could be forgiven for asking why Washington has descended into chaos while Tesla shares have been relatively free of it.

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So is Musk's relationship with Trump all we have to explain the situation?

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (10)

AP/ Evan Vucci

It would seem so, although early indications are that Tesla will launch the Model 3 on schedule in late 2017. That's probably helped support the rally over the past month, as Tesla announced pre-production of the vehicle.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (11)

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Here's the last week. The pull-back could have begun ...

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (12)

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So let's summarize.

Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (13)

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Over the past two years, Tesla has been a highly volatile stock that has at times baffled investors.

There was only one period of smooth price growth, and it gave way to a reliable pattern of volatility that preceded a massive drop.

Another period of wild volatility happened before a doldrumy episode prior the the most recent rally, which has been distinguished by its smoothness.

Up until the recent rally, my take was that Wall Street had figured out that Tesla was a car company, not a tech company, and had reset its expectations about growth.

But the Trump Bump surge made me question that. Was growth enthusiasm somehow back for Musk and his team?

The only way we'll find out is if earnings next week are really weak, the stock tanks, and a volatile decline-recovery cycle returns. If we see less of a roller-coaster ride, however, we could be in uncharted investment territory for Tesla.

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Tesla has sent investors on an epic roller coaster ride for years — look back at the craziest moments (2024)

FAQs

What is the answer to the roller coaster by Shelby Ostergaard? ›

Expert-Verified Answer

"The Roller Coaster" by Shelby Ostergaard tells the story of a girl who overcomes her fear of heights by riding a roller coaster with her friends. The theme of the text can be best expressed as "facing your fears can lead to personal growth and self-discovery."

How does Hudson react to getting on the roller coaster? ›

Davion, Justin, and Trey were nearly jumping up and down with excitement. Hudson was so scared he could feel it down to his toes. He started to worry he might throw up.

What is the name of the roller coaster that kills you? ›

The Euthanasia Coaster would kill its passengers through prolonged cerebral hypoxia, or insufficient supply of oxygen to the brain.

How does paragraph 40 help develop the plot of the story "The Roller Coaster"? ›

Explanation: Paragraph 40 helps develop the plot of the story by clarifying why Hudson is afraid of going on the roller coaster. The paragraph explains how Hudson's friends talk about the roller coaster and how it scares them, which leads to Hudson feeling anxious and wanting to avoid it.

Where is the commonlit answer key? ›

To view the answers for these questions, click “Answer Key” in the top right corner of the lesson preview. Please note, answers are only visible to users with confirmed educator accounts.

What causes a person to pass out on a roller coaster? ›

Rice's Science Journal says we experience high g-force in our everyday life, such as sneezing. These grey outs or blackouts on roller coasters are usually caused by not having enough to eat or being dehydrated. It can also be caused by hypoxia or low blood oxygen heat stress, fatigue, and consecutive rides.

What happens if you pass out on a roller coaster? ›

This high G-force can push heads down and have blood rush from your brain down to your feet, which in turn lowers the oxygen level in your brain, which may lead to gray outs, loss of peripheral vision (known as tunnel vision), or temporary blindness.

What happened to the roller coaster girl? ›

Ms Rodden faces years of rehabilitation after suffering a massive brain injury when she was flung nine metres into the air by the fast-moving ride. She was hit while trying to retrieve a mobile phone she dropped on the tracks at the Melbourne Royal Show on September 24 last year.

Does the roller coaster ever get higher than the first hill explain? ›

The first hill of a roller coaster is always the highest point of the roller coaster because friction and drag immediately begin robbing the car of energy.

What does the lift hill give the roller coaster? ›

Lift hills usually propel the train to the top of the ride via one of two methods: a chain lift involving a long, continuous chain which trains hook on to and are carried to the top; or a drive tire system in which multiple motorized tires (known as friction wheels) push the train upwards.

Where is the Formula roller coaster? ›

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