Wednesday, October 27, 2021 | Rabi' al-awwal 20, 1443 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Tesla’s surge inspires fans to buy and sceptics to dig in
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NEW YORK: Pretty much everyone on Wall Street has an opinion about Tesla. The electric vehicle maker’s stupendous rally in recent months has given shareholders something to cheer about, cost short sellers billions of dollars and vindicated legions of retail investors who have long adored Elon Musk’s company.


Tesla shares have soared by nearly 320 per cent since early June, helped by the company’s better-than-expected financial results and ramped-up production at its new car factory in Shanghai.


After surging 36 per cent over Monday and Tuesday, the stock by Friday had settled back to a gain of about 15 per cent for the week. On Friday afternoon, it was down marginally at $747.11.


Another factor driving this week’s surge may be fund managers hurrying to raise their allocation of the stock, analysts said.


“A lot of advisors and institutions, they jump in the bandwagon because they don’t want to trail,” said vocal Tesla bull Ross Gerber, president and chief executive of Gerber Kawasaki in Santa Monica, California. “If Tesla goes to $1,000 and they don’t own it, what are they going to tell their clients?” Gerber trimmed his fund’s position in the stock as the company’s valuation soared. He hopes to buy more if the stock falls and said a fair valuation would be around $550.


Retail investors have driven part of the surge.


Among Fidelity Investments customers, Tesla has been by far the most actively traded stock in recent sessions, with nearly 16,000 buy orders for the electric carmaker’s shares. Twitter, ranked second overall in trading activity on Fidelity, had just over 2,000 buy orders.


On Monday, when Tesla shot up 20 per cent in its biggest one day rally since 2013, clients at TD Ameritrade — millennials in particular — overwhelmingly took profits after having bought the stock for months, said JJ Kinahan, chief market strategist at the online brokerage. — Reuters


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