To recap my previous post, after the committee announced Tesla will join the S&P 500 Index and Morgan Stanley’s rating change, the stock rose sharply. The rally has continued and Telsa now trades well above the $550 level.
Tesla Inc (TSLA)
Goldman Sachs has a “Buy” rating on Tesla and set a target of $780 for the stock, a 30%+ premium over the most recent close. With the incredible move in Tesla’s stock this year, Elon Musk has become the second wealthiest individual in the world seeing an increase in net worth of over $111 billion.
Last week the Dow Jones passed the 30,000 mark for the first time in history. Markets are at all time highs amid optimism surrounding the various Covid-19 vaccines and their efficacy as well as talk of additional fiscal stimulus.
Investor sentiment has turned towards companies that will benefit from the normalization of the economy. In general, Americans have been spending their money on online streaming, gaming, entertainment, and shopping, but are looking forward to leisure travel. As an example, let us look at Vail Resorts.
Vail Resorts (MTN)
The company had been lagging the S&P Index before November, but last month it rose about 19% compared to 11% for the broader Index.
Speaking of big market moves, Nikola Corporation has had its’ share in the last several months. Nikola designs and manufactures electric components, drivetrains, and vehicles including the Nikola One and Nikola Two electric semi-trucks. In September, GM agreed to take an 11% stake in the company and deliver a fuel cell pickup truck called Badger by the end of 2022. An agreement valued at $2 billon; GM recently announced they will no longer build the pickup truck. Nikola will start refunding customers deposits for the Badger after GM’s announcement. The shock for the company was imminent; the stock fell 25% on Monday. From the beginning Nikola faced challenges. The company was accused of fraud and two weeks later their founder Trevor Milton stepped down as Chairman. GM’s new agreement with Nikola is expected to be “cost plus”, indicating that Nikola would pay for the investment upfront, adding to the challenges for the company.
Nikola Corp (NKLA)
Markets are ready for the resumption of normal life with stocks at all-time highs, yet domestic Covid-19 hospitalizations are breaking records as the virus continues to spread uncontrolled. Investors are closely focused on the timeline for vaccines and additional stimulus to keep the recovery on pace.