Tesla shares rose after the annual meeting. Here’s why.

It’s always difficult to call out Tesla’s stock price reaction to any event. For starters, it’s hard to know what he’s going to say or do. It’s hard to tell how high or low investors’ expectations will be on a vehicle delivery report, earnings report, investor day, or product launch.

Expectations were not high at the annual shareholder meeting held on Tuesday night. Tesla (Ticker:TSLA) stock rose at the beginning of the day on Wednesday.

Shares were up 1.4% in pre-market trading at about $169 a share.

Standard & Poor’s 500


NASDAQ Composite

Futures rose 0.2% and 0.4%, respectively.

The most obvious reason for the bump is CEO Elon Musk. He will spend less time on Twitter and continue to run his car company. “It’s not like that,” Musk said, when asked about rumors he might step down from his position at Tesla.

Like he said he would on Twitter.

This answer calmed the fears of investors. The meeting had some other pleasant surprises for investors. Tesla will try to advertise. Musk obliged in response to another question. The crowd cheered his answer.

Announcement – scroll to continue

Investors love the news, but the announcements once again show that the bigger Tesla gets, the more it starts behaving like a traditional automaker.

Smaller automakers like Ferrari (RACE) don’t need to advertise. They have no problem selling their produce. But Ferrari’s annual production is measured in the tens of thousands. Tesla cars are measured in the millions and counting. It is difficult to sell this amount of production.

Ford Motor (F) and General Motors (GM) spent $2.2 billion and $4 billion on advertising, respectively, in 2022. The figure of more than $6 billion represents roughly 2% of the companies’ combined sales for 2022. These are expenses, But GM and Ford, of course, think they’re getting the brand and sales benefits.

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Musk also talked about two new products that he said could sell five million units annually. That’s a lot. The best selling car models on the planet sell nearly a million units annually.

One of these new products is likely to be a hatchback or crossover wagon, says Gary Black, Co-Founder

Active Futures ETF

(FFND). Black, and other investors, had been waiting for a while for a smaller and less expensive Tesla model.

Production of the Cybertruck is also expected to begin in the summer, Canaccord analyst George Giannarikas noted in a report Tuesday. He evaluates buying Tesla shares and has a price target of $257 per share.

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Musk also made optimistic comments about recent improvements in self-driving technology, saying he believes Tesla will make it happen. [truly self driving cars] This year, CFRA analyst Garrett Nelson wrote in a report Wednesday. “While history has shown that Musk’s predictions should be taken into account, we believe Tesla is leading the self-driving race.” He evaluates to buy the stock and has a $250 price target for Tesla stock.

There are still some concerns. Bernstein analyst Tony Sacconaghi noted that Musk continues to warn that the coming year will be difficult for all automakers due to economic headwinds and high interest rates.

He also has concerns that Tesla’s product lineup is outdated. The company needed new models. Sacconaghi rates the shares for sale and has a price target of $150 per share.

For now, the positives outweigh the negatives and Tesla stock is up. Shares fell 6.6 percent after the annual shareholder meeting in 2022. There is no really big bad news coming out of this event. Investors’ expectations for this must have been high.

Write to Al Root at [email protected]

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