This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It's been a week now since Netflix (NASDAQ: NFLX) stock split its stock 10-for-1, transforming a $1,125-per-share stock into a $112.50-per-share stock in the blink of an eye -- but doing absolutely nothing to change the business. And do you know what? During that week, Netflix stock haas gotten even cheaper, falling from $112.50 to close at $110 on Monday, and continuing to fall to just $104 and change today. 

And there's still no substantive reason for this.

Netflix stock just got cheaper.

What does this mean for you, the investor? Well, let's review. In 2016, Netflix shares cost even more than they do today -- about $115 pre-split. But Netflix was earning a lot less than it is today. Full-year profit was about $187 million in 2016, or about $0.04 per share.

Nine years later, Netflix stock once again costs just a little over $100 per share (post-split, though, so it's really up about tenfold in price). Yet Netflix earned $39 billion last year, or $1.98 per share. That's 50 times more profit today, on a stock that costs only 10 times more.

So effectively, for every $1 you invest in Netflix today instead of nine years ago, you're earning five times more profit. That sounds like a pretty good deal to me. What's more, with the stock falling 7% in price over the past week, this deal is getting even better!

Long story short, if you didn't take advantage of Netflix's bargain price after its stock split, last week, there's still time to do so. Granted, you still need to decide for yourself whether Netflix stock is worth its valuation, currently 42.5 times trailing earnings, with a long-term expected growth rate of 25%. But if you do think Netflix stock is a "buy," then no, it's not "too late" to buy at all.

Indeed, you just got rewarded for waiting... with an even better stock price.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Netflix's 10-for-1 stock split: Time to buy before it's too late? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Are these the best ASX ETFs to buy with $1,000 in May?

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What does the Year 2000 mean to you?

You probably remember 2000 primarily as the year "Y2K" fears finally blew over. 1999 ended, the calendar flipped to triple-zero and...nothing happened. Crisis averted. (Well, crisis averted except for the fact that the Internet Bubble was about to burst, crashing the stock market and devastating investment portfolios far and wide).

Space investors though, might better remember 2000 as the year that Jeff Bezos, then CEO of Amazon.com (NASDAQ: AMZN), began a side project called "Blue Operations LLC" -- the company that we know today as Blue Origin. Established to explore the potential for building a "road to space," enabling other companies to build businesses off-planet -- much like creating the Internet allowed Amazon to be born -- Blue Origin came into being two full years before Elon Musk created SpaceX.

Many space investors don't remember 2000 as the year Blue Origin began, though. And the reason for that is because Blue Origin spent the first 15 years of its existence doing basically nothing. 

The hare and the tortoise

SpaceX wasted no time making up for starting two years after Blue Origin, beginning test flights of its small Falcon 1 rocket in 2006, and getting the rocket to orbit on its fourth try in 2008. In contrast, Blue Origin didn't conduct its first test flight until 2015, and the rocket it ended up flying was the New Shepard -- similar in size to Falcon 1 and reusable, but incapable of orbital flight. Moreover, by the time Blue Origin did finally launch New Shepard, SpaceX had already upgraded its original design to create Falcon 9 -- bigger than New Shepard or Falcon 1, capable of orbital speeds, and just as reusable.

It would take Blue Origin another decade to fly its own orbital rocket, New Glenn, which took off just earlier this year.

Elon Musk's secret weapon: U.S. government money

How did SpaceX go so far, and grow its business so much faster than Blue Origin has? In his new book Rocket Dreams: Musk, Bezos, and the Inside Story of the New, Trillion-Dollar Space Race, Washington Post space reporter Christian Davenport quotes Bezos explaining to his executives that "Elon's real superpower is getting government money."

When NASA needed to find a commercial supplier willing to develop a rocket and a space capsule, capable of ferrying supplies to the International Space Station (ISS), SpaceX stepped up and bid against NASA's (then) primary space contractor, the Boeing (NYSE: BA) and Lockheed Martin (NYSE: LMT) joint venture United Launch Alliance. SpaceX won what would become a contract worth billions of dollars to send supplies up on the Falcon 9 -- money it could then use to develop Falcon 9 into the world's first reusable space rocket.

When NASA later sought out contractors who could launch not just supplies, but actual astronauts to ISS as well, aboard "American rockets [launching] from American soil," SpaceX again raised its hand -- and won a $2.6 billion Commercial Crew contract as well. That money helped SpaceX develop the Crew Dragon spacecraft, and provided seed capital to start work on Starbase and the Starship megarocket as well.

Blue Origin makes a beeline for federal cash

In contrast, Blue Origin declined to bid on either NASA's Commercial Resupply or its Commercial Crew contracts. In the process, it deprived itself both of a source of funds from the government, and valuable time it could have spent using that money to develop an orbital-class rocket (i.e. a rocket capable of reaching speeds that would allow it to remain in orbit), in order to perform the contracts it (might have) won.

Long story short, Blue Origin made a mistake -- but it's a mistake Jeff Bezos now intends to fix. Going forward, Blue Origin intends to imitate that same strategy. And Davenport quotes the Blue CEO taking a vow: "From now on, we go after everything that SpaceX bids on."

What does this include?

Well, national security space launch (NSSL) contracts for one thing. SpaceX has been winning increasingly large proportions of these Space Force defense contracts since 2014, when it sued the U.S. Air Force (at the time, there was no "Space Force") to permit SpaceX to bid on these contracts. Now that Blue Origin has an orbital-class rocket of its own, it can bid for this work as well, and earlier this year it did bid for the third round of NSSL "Lane 2" contracts on offer -- and won $2.4 billion!

Blue's also bid on, and won, in 2023, at least one contract to build lunar landers for NASA, putting another $3.4 billion in Jeff Bezos's pocket.

For a multi-multi-billionaire like Jeff Bezos, it's all pocket change of course. But it's the kind of pocket change that helped turn SpaceX from a startup challenging incumbent rocket-maker United Launch Alliance, into the undisputed No. 1 rocket company in America.

With any luck, Bezos will be able to use similar billions to make Blue Origin at least No. 2. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Can anyone catch Elon Musk and SpaceX? Jeff Bezos thinks he can — With Blue Origin appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Champion Iron announces production gains and new growth projects
• South32 Hermosa project boosts reserves and mine life in FY26 update
• Sell alert! Why this expert is calling time on Karoon Energy and Santos shares
• 3 amazing ASX 200 shares to buy with $5,000 in May
• These ASX dividend shares keep giving investors a pay rise

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lockheed Martin. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) stock raced ahead by 7% through 10 a.m. ET Monday after Bloomberg reported that the incoming Trump administration wants to enact "a federal framework for fully self-driving vehicles."

CEO Elon Musk has repeatedly said that he considers artificial intelligence (AI) and autonomous driving technology the keys to Tesla's future growth. Investors are hoping that with government backing, this will turn into a winning bet.

What's driving Tesla stock higher

Tesla builds electric cars. Problem is, profit margins on electric cars have fallen as early adopters have made their purchases and demand elsewhere in the market has dwindled. Tesla's gross margin has fallen from better than 25% in 2021 and 2022 (roughly twice what Ford and GM were earning) to just over 18% in the past 12 months, according to data from S&P Global Market Intelligence. And with competition mounting as more and more companies field electric alternatives, it's unlikely Tesla's EV business alone will regain its former profit margins.

If Tesla succeeds in building an autonomous cars business, however, that would give the company a path to greater profitability, through software licensing and rental fees on fleets of new Cybercabs and Robovans.

Is regulation good news or bad news for Tesla?

Elon Musk was a major backer of Trump's presidential campaign, and investors seem to be assuming that support will translate into government regulation that favours Tesla. Musk has advocated for federal regulation in the past, rather than the current patchwork of state-by-state rules, and a framework for autonomous car operation would give Tesla a roadmap to follow at the same time that it imposes regulatory burdens on the industry. Larger, better-capitalized companies like Tesla would likely have an advantage over smaller start-ups in this scenario.

It remains to be seen, however, what form regulation will take, whether from the National Highway Traffic Safety Administration (over which Trump would have greater control) or laws passed by Congress (where the outcome would be less certain). For now, investors are best advised to wait and see what comes of this new policy proposal.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock just popped appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended General Motors and has recommended the following options: long January 2025 $25 calls on General Motors. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) stock continued putting pedal to metal as stock markets reopened for business Monday. Through 12:20 p.m. ET, the electric car leader gained 7.3%, bringing total gains since Donald Trump won reelection (with Elon Musk's support) to a staggering 37%.

Oh, and Tesla is a trillion-dollar company again -- $1.1 trillion, to be precise.

What's driving Tesla stock higher

Today's gains owe in part to growing enthusiasm for Tesla stock on Wall Street. Specifically, investors seem to be reacting to a new price target hike from investment bank Wedbush. According to reports, Wedbush analyst Daniel Ives just raised his price target on Tesla stock to $400 -- a 33% increase.

"The Trump White House win will be a gamechanger for the autonomous and AI story for Tesla and Musk over the coming years," predicts Ives. More than just a reward for financial support that helped him win reelection, the analyst anticipates that a new Trump administration will clear out the "federal regulatory spiderweb" that has slow-rolled developments in artificial intelligence and self-driving cars alike.

And while it's hard to quantify what that might mean for Tesla (Ives says $1 trillion, but really, that's just a guess), Musk has positioned Tesla to capitalise on these technologies. If a Trump White House works to get these developments fast-tracked, Tesla would be a logical company to benefit from that.

Is Tesla stock a buy?

Enticing investors with big, round numbers like $1 trillion, without providing math to support the number, is a great way to attract momentum traders to Tesla stock. More cautious investors, however, shouldn't ignore the math.

After its run-up these past few days, Tesla stock now costs a distressingly high 88 times trailing earnings, and 322 times free cash flow. Tesla's going to have to grow awfully fast to justify those multiples. Worse, it may have only four years in which to grow before regulations change again. Do you want to bet on all that growth happening in such a short time? Because I don't.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock keeps going up appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) stock revved 4% higher through 12:55 p.m. ET Monday after Barclays Capital's Dan Levy predicted the company will beat expectations on Q3 deliveries this year.

That does sound like good news for investors -- but remember to read the fine print.

What Barclays said about Tesla

In this morning's note, Levy argued that Tesla is likely to report 8% year-over-year growth in deliveries of its electric cars, which is more than other analysts are predicting, reports StreetInsider. Specifically, the Barclays analyst sees Tesla delivering 470,000 automobiles in the quarter, versus consensus projections for 461,000 units. Additionally, Levy predicts that Tesla's profit margins, which have been under pressure, will revive "modestly" in the quarter.

That's the good news.

The bad news is that Levy thinks most investors are already expecting Tesla to outperform consensus numbers, so that a positive surprise on deliveries may not move the stock as much as it might if investors were more fearful of a miss. Additionally, Levy warns that Tesla's inventories of unsold cars, which it had successfully shrunk somewhat in Q2, are on the rise again -- a trend that might not bode well for profit margins. Globally, the analyst believes Tesla has an inventory of anywhere from 120,000 to 130,000 unsold cars.

Is Tesla stock a buy?

Probably the worst news for Tesla investors today, though, is that while Barclays sounds optimistic on Tesla's deliveries, it's not optimistic at all about Tesla's stock price.

Although Levy maintained an equal weight (i.e., hold) rating on Tesla stock today, the analyst set a price target of only $220 on Tesla stock -- versus the $248 the stock now costs after today's forecast. That implies that, if Levy is right, Tesla stock could sink 11% over the next 12 months even if it does beat on deliveries.

And Levy probably is right about Tesla stock going down, for the simple reason that 67 times earnings is too high a price to pay for single-digit sales growth and declining profit margins. To me, this means Tesla stock is still a sell.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock popped 4% on Monday appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Barclays Plc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) stock fell 11% through 11:45 a.m. ET Wednesday after the company badly missed analyst forecasts for earnings Tuesday night.

Heading into the second-quarter report, Wall Street forecast the electric car leader would earn $0.62 per share on sales of $24.8 billion. Tesla exceeded the latter expectation, reporting Q2 sales of $25.5 billion. But this sales growth came at a cost to profit: Earnings were only $0.52 per share.

Tesla profits collapse

Not all Tesla's news was bad. Notably, the company's energy generation (i.e., solar panels) and storage (i.e., batteries) division — which believe it or not is now more profitable (with an 18.9% gross profit margin) than the automotive business, doubled in size to $1.5 billion in sales. And free cash flow for the quarter increased nicely to $1.3 billion.

Automotive sales, however, fell 7% year over year. And total sales were up an anemic 2%, despite beating estimates.

Particularly worrisome is the fact that operating expenses surged 39% in the quarter. Falling sales and rising costs is not usually a recipe for strong profits, and this proved true for Tesla, too. The company's operating profit margin shrank by more than a third, to 6.3%. Operating profits fell one-third to $1.6 billion. Net profits cratered — down 45%.

What it means for investors

Even then, the bad news wasn't done. Turns out, both analyst forecasts and Tesla's $0.52 headline result were put in the form of pro forma, non-GAAP profits. When calculated according to generally accepted accounting principles, Tesla's profit per share was only $0.42.

So what does this mean for investors?

At $700 billion in market capitalization and with $12.4 billion in trailing earnings, Tesla stock currently costs more than 56 times trailing earnings. That wouldn't necessarily be a bad thing if Tesla was still growing its sales by 50% or 70% annually, as happened during the pandemic. However, with Tesla stock stuck nearly in neutral at a 2% sales growth rate, and profit margins plummeting, it's hard to call Tesla stock a buy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock just crashed appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

I won't keep you in suspense. The answer is: $8,862.79.

That's how much money you'd have today if you had invested $1,000 in Tesla (NASDAQ: TSLA) stock five years ago -- and it's a pretty nice return, right?

Sure, there's been a lot of wailing and gnashing of teeth lately, a lot of proverbial clothes tearing, and sackcloth and ashes wearing, over the fact that Tesla stock has been cut in half from its 2023 high of nearly $300. But if you take the longer view, on April 15, 2019, Tesla stock closed at a split-adjusted price of $18.22 per share. It closed trading this past Monday at $161.48. Not quite a 10-bagger, but close.

Is Tesla stock still a buy?

Things look bleak for Tesla right now, with demand for electric cars slowing and Tesla laying off more than 10% of its workers this week. Tesla stock is down a lot on the bad news. But the good news about today's lower stock price is that it may be setting Tesla investors up to win some more extraordinary gains in the future.

From 2019, a year in which Tesla lost money, to 2023, the year it recorded a record $15 billion profit, Tesla stock surged more than 10x in price. This year, with analysts polled by S&P Global Market Intelligence forecasting Tesla earnings to decline 43% to $8.6 billion, the stock is down -- which is entirely to be expected. But what do you think might happen if Tesla survives its current troubles, and resumes growing earnings again?

Because that's what most analysts think is going to happen. Through 2028, most forecasts see Tesla tripling its 2024 earnings to end up with a $25.8 billion net profit in 2028 -- then slowing to a more modest mid-teens growth rate thereafter.

Granted, those profits are still quite a few years away. But for patient investors, Tesla stock still has the potential to deliver substantial profits. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post If you'd invested $1,000 in Tesla stock 5 years ago, here's how much you'd have today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tesla (NASDAQ: TSLA) stock is enjoying what feels like a rare "up" day Monday morning, as investors parse some confusing news. Last week Reuters reported that Tesla has abandoned its plans to build a Model 2 electric car priced at less than $25,000, in order to focus its efforts on building "robotaxis" instead.

CEO Elon Musk quickly dismissed the rumor on social media platform X, saying Reuters was "lying."

But Tesla stock still took a hit on Friday, falling nearly 4%. Today, however, Tesla is winning back its losses -- and more -- as its stock bounces 4.2% through 10:05 a.m. ET.

Tesla tweets

Citing unnamed sources, Reuters reported last week that Tesla has entirely "canceled" plans to build the Model 2 electric car -- which at a rumored price of $25,000 could be key to Tesla's efforts to compete with low-priced electric cars from China. Musk was quick to dismiss the report in part, but he did seem to endorse the other half of what Reuters was saying -- the bit about the robotaxi.

In a tweet following up on Reuters' article, Musk confirmed that Tesla will announce a new self-driving electric vehicle (EV), which he called his "robotaxi," on Aug. 8.

Tesla Robotaxi unveil on 8/8

-- Elon Musk (@elonmusk) April 5, 2024

Is Tesla stock a sell?

And that's really all he said on the matter. So what are investors supposed to make of these dueling Tesla reports, one from a respected news organization quoting inside sources at Tesla, and the other from Tesla's CEO himself?

Clearly, nothing's 100% clear right now. But the most likely scenario seems that Tesla has made robotaxis its new top priority, while pouring money into developing a cheap EV is now taking a back seat. In the middle of an EV price war, that seems a sound strategy that could preserve profit margins for Tesla. It's not a reason to sell Tesla stock.

But it might be a reason to buy. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock put pedal to metal today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

"Space is hard" goes the old saw among space investors. But here's a new truism you might want to memorize: Space is hard -- and it can also be weird.

Investors got their latest lesson in just how strange space investing can get late last month, when NASA revealed that it's planning a new mission to send a volunteer space mission into orbit to adjust the orbit of the Hubble Space Telescope -- and potentially extend the telescope's lifespan by another 15 to 20 years.  

Cue Elon Musk

It should surprise exactly no one to learn Elon Musk is at the center of this latest "weird space news" story. As NASA explains, the space agency has signed an agreement with SpaceX to study potentially sending a "Polaris Program" mission Crew Dragon spacecraft to Hubble, where it will dock with the telescope and use the engines on the Crew Dragon to lift Hubble to a higher orbit.  

For those not familiar with Polaris, this is the private space initiative set up by pilot, billionaire, and Shift4 Payments (NYSE: FOUR) CEO Jared Isaacman last year. Polaris was initially founded to run the Inspiration4 mission that sent four private astronauts (Isaacman captained the crew) to space for a three-day orbit of the Earth in September 2021.

It has since evolved into a multi-mission project that will launch at least three more times -- all aboard SpaceX spaceships -- and attempt to set records for the highest Earth orbit crewed mission ever flown, the first private spacewalk, and the first test of SpaceX Starlink laser-based communications from space, to space.  

Which brings us back to NASA -- and Hubble.

As NASA advised late last month, Polaris and SpaceX have proposed running a mission "at no cost to the government," aiming to potentially keep the 32-year-old Hubble Space Telescope in operation into the 2050s. Although there may be some risk in allowing private contractors to take control of the NASA satellite, the alternative is to allow Hubble's orbit to decay naturally -- in which case the spacecraft might fall back to Earth as early as 2030.  

And of course, the fact that the mission would be performed gratis for NASA just adds to the attraction.

Space volunteers

The volunteer nature of this mission, however, does raise some questions for space investors going forward. Chief among them: How are for-profit companies like Northrop Grumman, Boeing, and Lockheed Martin supposed to compete with a company like SpaceX if it's -- even only occasionally -- going to run off and do volunteer work for NASA for free?

In this particular case of the Hubble mission, of course, it wouldn't really be SpaceX volunteering its services. Rather, billionaire Isaacman -- who is hiring the SpaceX Falcon 9 rocket ship for his flight anyway -- will be picking up the tab.

But in future years, as the cost of spaceflight plummets (in and of itself a problem for space launch companies like the Boeing-Lockheed joint venture United Launch Alliance), the chance that SpaceX might do further missions for free, in order to ingratiate itself to its biggest customer, could rise.

After all, according to SpaceX, once it gets its Starship mega-rocket up and running, the cost of each launch could theoretically fall as low as $2 million -- a relative rounding error that could prompt SpaceX to do some missions for free.

And SpaceX isn't the only space company that's begun performing science missions for free. Upstart small rocket company Rocket Lab (NASDAQ: RKLB), for example, is promising to send a space probe to Venus sometime next year. With funding provided by philanthropists, MIT, and Rocket Lab's own cash, the mission could cost as little as $10 million -- or about 2% of what NASA pays private contractors to conduct similar missions.  

What it means for investors

Suffice it to say: This is not how for-profit companies ordinarily operate.

And, yes, as a space fan myself -- and as a taxpayer -- I applaud the idea of private businesses using their own capital, and supplementing it with help from philanthropists, to advance the cause of space exploration. As an investor, however, I do wonder what this might mean for for-profit aerospace companies like Boeing, Lockheed, and Northrop.

The good news is that, according to data from S&P Global Market Intelligence, these three companies in total still enjoy annual "space" revenues in excess of $30 billion, largely paid for by NASA and other big space customers. For the time being at least, there seems to be more than enough paying work to go around.

As the cost of access to space falls, however, and new rivals become unpredictably -- and illogically! -- willing to do formerly paid-for space work for free, the economics of space investing could become increasingly uncertain.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Space investing just got weirder appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Morgans says this exciting small-cap ASX share could rise almost 50%

Rich Smith has positions in Rocket Lab USA, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lockheed Martin and Shift4 Payments, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

On another bright "green" day for the stock market, shares of electric vehicle manufacturers are doing better than most. As of 11:05 a.m. ET Tuesday, shares of EV leader Tesla (NASDAQ: TSLA) had surged by 5%, well outpacing the S&P 500 (which was up a solid 0.9%). Electric truck rival Rivian (NASDAQ: RIVN) was doing even better with a 6.9% gain and Chinese EV maker Nio (NYSE: NIO) was doing best of all -- up 7.8%.

But news from Tesla was probably the main reason for all of these gains.

So what

As multiple sources reported, Tesla on Monday announced it was cutting the prices for its popular Model 3 sedans and Model Y crossover EVs in China by as much as 9%. As The Wall Street Journal reported, a "standard" Model Y in China now sells for the yuan equivalent of just $39,800 -- versus the $58,190 price being charged for a "long range dual motor AWD Model Y" (the cheapest model shown on Tesla's website) here in the U.S.    

Now why would investors think this is good news? After all, as my Foolish colleague Travis Hoium just pointed out, all else being equal, a 9% reduction in MSRP can easily translate into a 9-percentage-point reduction in operating profit margins. So if Tesla earned 17.2% margins on its cars last quarter (which it did, according to data from S&P Global Market Intelligence), cutting the costs of some Tesla cars by 9% could mean cutting its profits on those cars in half.

If you assume (as seems logical) that rivals Rivian and Nio will have to cut their prices in order to compete with Tesla, that would seem to foreshadow falling profit margins across the board in the EV sector.

Now what

That, as they say, is the bad news. But here's where the news might be a bit better for Tesla, Rivian, and Nio. One reason why Tesla is able to cut prices so drastically, says CEO Elon Musk, is that the costs of the commodities it requires to build its cars "are dropping a lot" and the company now anticipates that it will "see some cost reduction in 2023."  

So it seems that while Tesla is sacrificing some of its profit margin through EV price reductions, it may also be gaining some profits back farther up the supply chain. As long as the cost of manufacturing Teslas (and Nios and Rivians, of course) falls in tandem with the prices these companies charge for their EVs, there's a chance that lower car prices won't mean lower profits for their makers.

Or so investors seem to be hoping Tuesday.

Is that a smart bet? Maybe. It's still possible Tesla's price cuts will spark a price war among EV makers. There's also the potential for the still-rising cost of some commodities -- lithium in particular -- to mess up the math and prevent Tesla and its peers from cutting their total costs enough to make up for their price cuts. When you get right down to it, your safest bet is still to avoid the riskier stocks in this space like Nio and Rivian -- neither of those companies is currently profitable -- and focus instead on Tesla.

Trading at 59 times trailing earnings, Tesla still isn't what I'd call a cheap stock. But at least it's cheaper than the alternatives. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla and other EV stocks popped today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nio Inc. and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.   

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

On an only modestly red day for the stock market, with major indices all down just a fraction of a percent each, shares of automotive stocks are getting hurt more than most. Tic-tac-toe, three in a row, shares of Ford Motor Company (NYSE: F), Tesla (NASDAQ: TSLA), and Nio (NYSE: NIO) are down 2%, 1.9%, and 5.9%, respectively.

Each of the three ran into a fender bender of modestly bad news today.    

So what

In the case of electric vehicle (EV) specialists Tesla and Nio, it's basically Wall Street to blame for today's declines. Granted, yesterday's announcement that Elon Musk has apparently decided he will buy Twitter after all is probably still having an effect on Tesla stock -- but there's new news, too.

Specifically, this morning, Japan's Mizuho bank lowered its price target on Tesla stock, citing "logistics challenges" that prevented the company from hitting its targeted delivery number for the last quarter. Although Tesla did still grow its deliveries 42% year over year, and grew its production numbers 54%, the miss necessitates a price target cut to $370 per share, says Mizuho today in a note covered by StreetInsider.  

Similarly, Mizuho cut its price target on China's Nio by about 5%, to $40 a share, citing -- surprise! -- "softer SepQ deliveries" and consequently lower expected earnings in the quarter. Indeed, across the EV industry, Mizuho says getting the needed parts to build EVs, and getting transportation to deliver them where they're going, remains "a challenge." Long term, Mizuho is still a supporter of both Tesla and Nio stocks and maintains buy ratings on both companies.  

Mizuho just isn't sure the stocks will go up as much as it previously hoped they might.

Now what

Now, what about Ford -- which, for all its electric ambitions, still remains today primarily a maker of SUVs and trucks powered by the venerable internal combustion engine? Well, earlier this week, as you probably heard, Ford reported a 9% decline in sales for September -- and an 18% decline in trucks. The company blames parts shortages for sidelining as many as 45,000 vehicles that remain only half-built because they don't have the parts needed to complete them.  

For that matter, even Ford's small but growing electric operation is apparently not immune from the problems plaguing its competitors. Last night, Ford announced that it's raising the price of its base model F-150 Lightning electric pickup truck by $5,000 -- not because it wants to, but because it has to, in order to absorb the costs of "supply chain constraints, rising material costs and other market factors." 

After this hike and the first round of price increases, announced less than two months ago, the price of the F-150 Lightning is now up an astounding 30% over its originally announced base price of just under $40,000 last year.

Now, from one perspective, Ford charging more money for a truck might be considered a good thing -- more money for Ford, right? But if all the extra money coming in one door immediately goes out another to pay Ford's suppliers, then there's really no net gain for the company or the stock. To the contrary, as Ford F-150 Lightning prices rapidly run up from "It's a bargain!" territory to "Hmm, maybe I should just buy a Rivian truck" levels, the good publicity and sales advantages Ford initially enjoyed from introducing the Lightning are already starting to evaporate.

Granted, at a lowly 4.3 times trailing earnings, I still think Ford stock looks cheap enough to buy. But based on today's bad news, I can't blame other investors for deciding Ford might actually need to get a little bit cheaper. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock fell today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month
• Morgans says this exciting small-cap ASX share could rise almost 50%

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nio Inc., Tesla, and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of e-commerce giant Amazon.com (NASDAQ: AMZN) jumped 2.39% on Monday, the stock's fourth straight day of price gains. The big news today:

Amazon is diving deeper into robotics.

So what

Warehouse robotics, to be precise. As the company announced on its AboutAmazon.com blog on Friday, Amazon has just signed a deal to acquire Belgian "mechatronics solutions" company Cloostermans.

Amazon noted on its blog that it has been using Cloostermans technology "to help move and stack heavy pallets and totes or package products together for customer delivery" since 2019 already. Now Amazon is bringing the entire company (and its 200 workers) in-house, integrating it into Amazon's Global Robotics subdivision.

Now what

Well, not "now" exactly. Amazon did note in its announcement that the deal to acquire Cloostermans "is subject to closing conditions" -- presumably including regulatory approval. But Cloostermans itself is on board with the deal, with Frederik Berckmoes-Joos, the CEO of the privately owned company, saying he's "thrilled to be joining the Amazon family".

In contrast, Amazon did not say how much it is spending to acquire its new subsidiary -- but even that absence of information is instructive. Presumably, if the price of acquiring Cloostermans were "material", Amazon would have been required by SEC regulations to disclose it -- so if they didn't, it wasn't.

Conclusion: Amazon just increased its lead over rivals in the field of money-saving warehouse automation technology, and didn't pay a whole lot to do it. To my mind, that's a good reason for Amazon stock to be going up today.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Amazon stock popped today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Champion Iron announces production gains and new growth projects
• South32 Hermosa project boosts reserves and mine life in FY26 update
• Sell alert! Why this expert is calling time on Karoon Energy and Santos shares
• 3 amazing ASX 200 shares to buy with $5,000 in May
• These ASX dividend shares keep giving investors a pay rise

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

In the midst of a down market, shares of EV leader Tesla (NASDAQ: TSLA) tumbled more than most, falling 7.2% through noon ET on Thursday after Reuters reported that Tesla is once again raising prices on its electric cars. 

Citing the rising cost of raw materials and continuing problems getting auto parts with which to build its cars efficiently, Reuters noted that Tesla has raised the price on its popular Model Y crossover by about 4.8%, to $65,990 for the "long-range" version.  

So what

Tesla isn't stopping there, though. Digging into the details on Tesla's website, Electrek reported last night that the prices are as follows:

• The Model 3 Long Range price is up the most in percentage terms, rising 6.4% to $57,990.
• The Model X Dual Motor All-Wheel Drive Long Range price increased 5.2% to $120,990.
• The Model S Dual Motor All-Wheel Drive Long Range's price rose a similar 5% to $104,990.
• The Model Y Performance crossover inched up only 2.9% to $69,990.
• "Plaid" versions of both the Model S and the Model X held steady at $135,990 and $138,990, respectively -- no change in price.

Skimming the changes, there's no discernible pattern to where Tesla is hiking prices more and where less. While "Plaid" pricing is already the highest for both the S and X and is not budging, Tesla's other Model X doesn't cost much less, yet its price was hiked significantly.

The biggest change in pricing came to the Model 3, and raising the price on Tesla's entry-level EV may be a move to encourage customers to skip past the Model 3 and pay just a little more to get an even better, bigger car instead. Similarly, the price changes in the Model Y tighten the price differential between the lower-end and higher-end models -- which might likewise be aimed at persuading shoppers to buy a little more car than they had intended.

Now what

To that extent, therefore, it almost seems as if raising prices might be good news for Tesla, and that investors who are selling the stock on today's news are making a mistake -- but for one thing.

Just two days ago, Elon Musk was quoted telling his audience at the Tesla Silicon Valley Owners Club that he thought electric rival Rivian (NASDAQ: RIVN) made a mistake when it tried to raise prices on its electric trucks and SUVs back in March. When you raise prices, commented Musk, you "reduce the number of people who can afford the vehicles exponentially," as Electrek reported.  

If that's true for Rivian, though, then shouldn't it also be true for Tesla? By raising his own prices, doesn't Musk run the risk of depressing demand for new Teslas -- at the very moment when rivals such as Hyundai and Ford and GM -- and yes, Rivian, too -- are bringing new and occasionally cheaper alternative EV models to market?

Because if that's the case, then it might be a good reason Tesla stock is going down today. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock sold off 7% today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

So what

Now what

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock did a U-turn today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-vehicle (EV) maker Tesla (NASDAQ: TSLA) tumbled for a second straight day on Wednesday, falling as much as 2.4% through 10:35 a.m. ET before recovering some of their losses later in the morning. 

Elon Musk's comments have a lot to do with that.

So what

On the one hand, as The Fly reports, Goldman Sachs lowered its target on Tesla shares from $1,200 to $1,000. But $1,000 is about 33% higher than where Tesla stock trades today, and Goldman wasn't specifically targeting Tesla when it made this cut. Rather, the lowered price target was part of a broad reduction in Goldman's estimates across the U.S. auto and industrial technology space, to account for continuing supply chain snarls and expected lower production.  

But the bigger Tesla story today comes straight from the CEO himself. There was a leak of an internal email from Musk to his executive staff (i.e., office workers, not factory employees) advising them that the company is ending work-from-home permission and requiring its employees to either return to the office or "pretend to work somewhere else."

They should pretend to work somewhere else

-- Elon Musk (@elonmusk) June 1, 2022

Now what

The result was predictable, but there are actually two ways of looking at this new Tesla policy. From one perspective (the one that investors seem to be taking today), the company is risking a brain drain by telling some of its most skilled staff to either resume commuting to work or else hit the road. In a seller's market like the present labor market in the U.S., this ultimatum is probably not going to be popular with work-from-home staff who have gotten used to not having to commute to the office over the past two pandemic years. 

If remote work is no longer acceptable to Musk, then working for Tesla might no longer be acceptable to many key Tesla employees. They could instead defect to Rivian, Ford, Apple, or any of a number of other Tesla competitors, to the detriment of its business.

But here's the contrary theory: It's not fair that within a single company, one class of employees (factory workers) is required to come into work while another (the executive staff) isn't.

In the short term, Musk's ultimatum could cause unrest -- maybe even revolt -- among his white collar staff. But by eliminating de facto favoritism, Tesla may actually end up increasing esprit de corps and strengthening the entire company as a result. One can hope, at least. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock is still falling today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Goldman Sachs, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car maker Tesla (NASDAQ: TSLA) stalled out of the gate on Tuesday, after Barron's commented that analyst estimates for the company's Q2 production levels "look a little high." As of 10:10 a.m. ET, Tesla stock is down 2.5%. 

So what

If you recall, it's been a week since Tesla announced plans to resume full-speed production of electric vehicles (EVs) at its Shanghai gigafactory in China -- 2,600 cars per day, 949,000 cars per year, and a big boost toward the company's goal of building 1.5 million EVs this year. One week later, though, Bloomberg reports that the company is still only up to 70% of production capacity, or about 1,800 cars per day. 

However, it's important to factor in the loss of perhaps 100,000 cars worth of production already in Q1 and Q2 from COVID restrictions in China that impeded production, as well as slower-than-planned production ramps at Tesla's gigactories in Texas and Germany. When these factors are taken into account, Barron's calculates that Tesla might produce only 300,000 -- or even 260,000 -- electric vehicles this quarter. And that suggests that Tesla will fall far short of its 1.5 million-unit goal this year. 

Now what

This explains why some investors might feel inclined to sell Tesla today, before it gets a chance to confirm the "production miss." I think that's an overreaction and probably a mistake.

Consider this: Tesla probably won't produce 1.5 million cars this year (but it still might -- with Elon Musk, you never know). But you can hardly blame Tesla for missing a goal if it only misses because of COVID restrictions imposed by a sovereign government. Even if Tesla fails to produce 1.5 million cars this year, the fact that it's already ramping back up to full capacity in China means that it might produce 1.5 million EVs (or more) next year.

In short, investors shouldn't focus on the sales goal for any one year because of the quirks of health regulation in one single country -- but rather, on the trend of increasing, accelerating production levels at Tesla factories being built all around the world.

Long term, the trend for this stock's growth is still up. Don't get too frightened over one down day. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why the Tesla share price stalled on Tuesday appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

For the second day in a row, shares of Tesla (NASDAQ: TSLA) stock zoomed higher on Thursday -- and indeed, after shooting up 4.9% yesterday, Tesla's 5.8% gain as of 11:15 a.m. ET today suggests that momentum may be building behind the electric cars stock.

Once again, you can thank Cathie Wood for that.

So what

As I pointed out yesterday, on Monday and Tuesday this week, growth investor Wood swooped in to buy nearly 42,000 Tesla shares for her various ARK ETF funds. These purchases marked a sharp reversal from her actions over the past two months, during which time she sold more than 490,000 Tesla shares.  

Investors are cheering Wood's return to the Tesla market today -- but are they also following in her footsteps a moment too late?

Now what

Consider: From late March through late May, Wood consistently sold Tesla stock from just over $1,000 a share to the point where it fell below $700. Now, Tesla stock is once again just dollars away from $700 -- and while Wood is still buying, her pace has slackened quite suddenly.

After she scooped up 15,858 Tesla shares on Monday and another 26,081 on Tuesday, ARK's website shows that Wood bought only 1,343 shares of Tesla on Wednesday. The website's reports are a day behind, but the figures suggest that Wood's buying spree may already be approaching an end -- or at least taking a breather.

At the same time, we learned last night from a Securities and Exchange Commission filing that Elon Musk has decided to replace $6.25 billion worth of planned "margin loans" for his purchase of Twitter with $6.25 billion in additional "equity financing." On the plus side, this appears to imply that much less Tesla stock will be tied up as collateral for Musk's loans, but it also appears to imply that the Tesla CEO may sell another $6.25 billion worth of Tesla stock to raise the cash he needs to buy the social media site.  

Long story short: It sounds like Musk is about to start selling Tesla stock again -- and at the same time that Wood may stop buying Tesla stock. If that's the way this plays out, it won't be great news for Tesla investors. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock keeps going up appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric vehicle leader Tesla (NASDAQ: TSLA) zoomed higher on Wednesday morning, and were up by 5% through 11:58 a.m. ET.

You can give some credit to Cathie Wood for that.

So what

Over the past two days, as Tesla stock trended lower, famed (and lately, famously embattled) growth investor Wood scooped up nearly 42,000 shares -- 15,858 shares on Monday, and another 26,081 shares Tuesday -- according to data provided by the website of her investment management firm, ARK Invest. These were Wood's first purchases of Tesla stock in at least the last two months -- and they followed a two-month-long selling streak during which her ARK exchange traded funds (ETFs) sold off more than 490,000 shares.  

Wood, it appears, had been waiting patiently for Tesla stock to top $1,000, and she's been steadily unloading the EV maker's shares ever since, but after they sank below $700 on Friday, she resumed buying.

Now what

What prompted Wood's sudden shift? A stock price that's now 30% cheaper than it was when she started selling was likely one catalyst. But there was also some more substantive news out regarding Tesla on Wednesday. As U.K. newspaper The Independent reported, Tesla's Advanced Battery Research division has announced it has developed a nickel-based rechargeable car battery that has the potential to last 100 years -- or at least 1 million miles -- before it must be recycled. (For the technically curious, the key material's chemical formula is Li[Ni_0.5Mn_0.3Co_0.2]O₂.)  

Granted, Tesla's current LiFePO₄ batteries are already estimated to have a service life of more than 20 years before they lose 20% of their maximum charge capacity -- longer than the lifespan of most cars. But even so, increasing that lifespan by a factor of five implies the batteries might effectively never lose any significant charging capacity within a car owner's time of ownership. That would give Tesla's vehicles another strong competitive advantage in an electric car market that's getting more crowded by the day.

Even more than Cathie Wood's stamp of approval, this battery news is a good reason for Tesla stock to be rising. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock raced higher today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

After a brief respite on Monday, shares of electric vehicle (EV) leader Tesla (NASDAQ: TSLA) turned back south again on Tuesday. As of 11:50 a.m. ET today, the stock was down 4.5%.

So what

Tesla has announced plans to resume full-capacity production of EVs at its Shanghai Gigafactory as early as today. If it succeeds in getting production back up to full speed, it could be churning out nearly 950,000 vehicles per year in China, putting it back on track toward its goal of producing 1.5 million EVs per year. But probably not this year.

As Daiwa warns today in a note covered by The Fly, Tesla has already lost about 100,000 units of potential production in Shanghai as it sat on the kerb and waited for Chinese COVID containment regulations to lapse. Adding to Tesla's troubles, Daiwa believes production ramp-ups at Gigafactories in Texas and in Germany have been slower than planned, reducing total 2022 potential production by another 80,000 vehicles.  

Result: In a year when Tesla aimed to produce 1.5 million EVs, it might succeed in building only 1.2 million.

Now what

And that's OK. On the one hand, Daiwa cites this expected production miss as the reason it's cutting its price target on Tesla by more than 30%, to $800 a share. Yes, this lower value on shares could complicate Elon Musk's plan to finance his acquisition of Twitter (as analysts at Bernstein commented today). And yes, rival Volkswagen could very well try to take advantage of Tesla's weakness at this point to accelerate its own EV plans and overtake it in sales by 2025.  

But it's pretty irrelevant whether Tesla achieves 1.5 million EVs produced this year. In the grand scheme of things, that's a short term and rather arbitrary milestone. What's important is whether the company succeeds in producing at the rate of 1.5 million cars per year after the lockdown ends. And not only does Daiwa think it will, but that analyst estimates the company will keep growing its production, probably hitting 1.8 million cars in 2023.

That's the goal you should focus on: what happens after the lockdown goes away and Tesla's growth is able to rev higher unhindered. As long as it keeps doing that, this growth story remains intact.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock turned south today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric vehicles leader Tesla (NASDAQ: TSLA) broke a three-day losing streak on Monday, bouncing back a respectable 2.3% as of 12:05 p.m. ET.

The company announced today that it will resume production at its Shanghai gigafactory as early as tomorrow at levels prior to the recent COVID-19 lockdowns there. 

So what

If you recall, earlier this month, Tesla's production numbers on electric vehicles in China fell as low as 200 cars per day, as measures imposed by the government to contain the spread of COVID-19 dried up the supply of auto parts to Tesla's factory. By today, according to a report by Reuters, the company said it's got production back up to 1,000 units per day -- and occasionally more -- but that still works out to an annual production rate of maybe 365,000 units, which is well below the factory's rated capacity.  

That's the bad news. The good news is that Reuters reports that Tesla now thinks it will be able to get its production capacity back up to its target of 2,600 units per day -- and that will work out to roughly 949,000 cars per year.

Now what

As I pointed out last week, 949,000 will be a magic number for Tesla. It will mean that at just one single factory -- Gigafactory Shanghai -- Tesla will be producing more cars in a year than all of its factories worldwide produced in 2021. It will put the company back on track toward its goal of producing 1.5 million electric cars per year.

And Tesla could be back on that track by as early as tomorrow. Even if coronavirus complications prevent Tesla from hitting its 1.5 million-car target this year, just knowing the company has reached its goal of producing 1.5 million cars per year will be reason to celebrate. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Tesla stock finally bounced today appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 ASX ETFs with market-beating potential over the next 10 years
• Global X says it's time to target this electric vehicle ASX ETF that has doubled in a year
• Why ASX investors dumped IVV ETF last month

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.