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GE   13.21 (+0.76%)
MU   94.48 (-0.30%)
T   28.17 (+0.28%)
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BA   224.93 (+0.24%)
BAC   35.69 (-0.28%)
QQQ   323.78 (+0.06%)
CGC   35.25 (+1.50%)
GE   13.21 (+0.76%)
MU   94.48 (-0.30%)
T   28.17 (+0.28%)
F   12.03 (+0.42%)
ACB   11.25 (+1.90%)
BA   224.93 (+0.24%)
BAC   35.69 (-0.28%)
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Tesla's (NASDAQ: TSLA) Fresh Round Of Funding Sends Shares Rallying

Wednesday, December 9, 2020 | Sam Quirke
Teslas (NASDAQ: TSLA) Fresh Round Of Funding Sends Shares RallyingIs there anything that can hold Tesla (NASDAQ: TSLA) stock down right now? Typically when a company raises more money from an additional stock offering, shares see some weakness creep in as their value is diluted, on paper at least. Not so for the company of Mr. Musk, which finished the day up more than 1% and at all-time highs.

The $600 billion electric vehicle titan plans to pull in a cool $5 billion from an at-the-money offering, even with shares as high as they are. Several double-digit percentage pullbacks in recent months haven’t been enough to dilute the resolve of their bulls, who’ve pushed the stock up almost 9x in as many months. Investors would do well to take note. It seems the smart money and the big money is focusing on the ever-growing potential that lies ahead in the electric vehicle and clean energy space, and are betting big on Tesla’s ability to continue capturing market share.

$1,000 Price Target

Wedbush Securities called yesterday’s decision a smart move and one that will give them a hefty balance sheet to enter 2021 with. Analyst Dan Ives noted how "this is in addition to the $5 billion raised from September and additional equity raises in a continued effort to build up its treasure chest and capital expenditure capabilities down the road.” By raising so much fresh capital, Tesla seems to have put to bed any near-term concerns about the bears’ thesis becoming reality. Not only were they able to side step the shutdown of key factories due to COVID-19, but they’ve also been able to hit their key production and sales metrics this year too.

Wedbush’s $1,000 price target for Tesla shares should have those of us still on the sidelines licking our chops at the prospect of getting involved, even with the stock as high as it is. Wedbush are not alone on Wall Street either in terms of being fans of Tesla, with Goldman Sachs upgrading the company’s shares from Neutral to a Buy rating late last week. A vastly improved long term sales outlook and attractive margins underpinned their decision, which was also possibly influenced by them being the underwriters of the $5 billion offering announced yesterday.

Close To Zero Competition

On Monday, Loup Ventures' Gene Munster looked beyond 2021 and called for a $2,500 price target, or a 300% increase from the current share price, within the next three years. This would put their market cap above the $2 trillion level but Munster is bullish on this happening as Tesla continues to bring its characteristic disruption to industries outside of the auto space.

In an interview on CNBC, Munster said Tesla “are really going to take their tech that they're defining and pioneering with auto and apply it to new markets", with high margin industries like insurance ripe for a 21st century player. Is there a chance that their automotive peers could catch up with them? Not a hope says Munster, “that ship has sailed”. Indeed, it’s already a fading headline that Tesla now outweighs almost any combination of other automakers by market cap.

The consistent profitability that has now become the mainstay of their quarterly earnings reports has also come to bear fruit, with their upcoming inclusion in the S&P 500 index seen as a major step in their maturity as a public company. Tesla’s inclusion will come into effect on Monday, December 21st, in what will be the largest rebalancing of the benchmark index in its history.

By the time that Monday's session closes, Tesla will be around the 7th biggest component of the index, lagging behind fellow tech titans such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN). But based on the seemingly unstoppable momentum that’s in its shares at the moment, it’s hard not to see them soon moving towards the top of that bunch.

Teslas (NASDAQ: TSLA) Fresh Round Of Funding Sends Shares Rallying

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tesla (TSLA)1.4$715.49-0.4%N/A1,436.73Hold$324.92
Apple (AAPL)2.2$128.17+0.3%0.64%39.32Buy$133.93
Microsoft (MSFT)2.7$236.78-0.1%0.95%38.25Buy$268.65
Amazon.com (AMZN)1.8$3,142.38-0.1%N/A92.02Buy$3,938.59
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7 Penny Stocks That Don’t Care About Robinhood

By the time you read this Vladimir Tenev, the CEO of the trading app Robinhood, will be testifying in front of Congress. The company’s role in the GameStop (NYSE:GME) short squeeze will be called into question.

However, the real issue at stake is the right of traders to buy and sell the equities of their choice. In the case of Robinhood, some traders are buying a lot of penny stocks. While definitions vary, penny stocks are generally considered stocks that are trading for less than $10 per share. These stocks are largely ignored by the investment community.

One reason is that many of these stocks are cheap for a reason. For example, the company may have a business model that is out of date. In other cases, they operate in a very small, niche market that doesn’t drive a lot of revenue.

And most of these stocks are ignored by the investment community. They simply aren’t considered significant enough to spend time debating.

But some penny stocks do have the attention of Wall Street. And they’re being largely ignored by the day trading community. The focus of this special presentation is to direct you to penny stocks that have a story that the “smart money” thinks will eventually be trading at much higher prices.

And that’s why you should be looking at them now.

View the "7 Penny Stocks That Don’t Care About Robinhood".

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