Navigating the Uncertainties of Tesla Stock: Insights for Investors

Discover key insights for investors on navigating the uncertainties of Tesla stock and making informed investment decisions.

Tesla’s (TSLA) stock is up 0.23% today, leveling off after several days of gains. The stock is down by 29% since the start of the year. Many automaker stocks are not growing exponentially despite great sales figures, as they need to prove that they have a great forecast for the next quarter and are looking for ways to grow their market. Tesla has been working to cut costs and find innovative ways to grow the company, but the success of their efforts will determine the trajectory of the stock.

June 13th Shareholders Meeting

June 13th is poised to be a pivotal day for Tesla shareholders, with several critical decisions on the agenda, including relocating Tesla’s headquarters from Delaware to Texas and a pay package worth around $50 billion for CEO Elon Musk. Morgan Stanley analyst Adam Jonas believes the vote will have a big impact on the long-term strategic direction of the company and could drive material volatility in the stock.

Musk’s ownership of Tesla stands at around 20.5% when factoring in the options granted in the 2018 award, and he is seeking to have around a 25% share of the vote. Tesla is the only entity in Musk’s portfolio where he lacks control or a blocking minority vote.

If the payment package is rejected, it could make it increasingly difficult for Musk to achieve 25% ownership. Jonas believes that Tesla’s AI prospects will be limited until there is some resolution to the voting control matter, and as long as the issue of blocking minorities remains in limbo, Tesla’s share price trajectory will continue to be dominated by the more sobering developments within the global EV industry.

Pros and Cons of Investing in Tesla Shares

Tesla is widely known for being at the forefront of electric car development and manufacture, with its vehicles having a noticeable presence in every large town and city across the UK and America. The company is also making strides in battery technology, solar power capture and storage, and artificial intelligence.

The pros of investing in Tesla shares include the possibility of targeting two global mega-trends in one stock (the green energy transition and AI), the current attractive pricing of shares compared to their peak, Tesla’s proven leadership in battery technology and AI-powered automation, and the potential benefits from the global energy transition.

However, there are also cons to investing in Tesla shares. The company’s shares have been very volatile, with extreme market reactions to changes in sales numbers. There is a key person risk associated with Elon Musk, as his departure could shake the company to its foundations. Tesla’s relationship with China is precarious, and rising competition from long-established car giants is a concern.

The Bottom Line for Tesla Investors

Investors can buy Tesla shares directly through investment platforms and brokers or invest in funds, investment trusts, or ETFs that have a large holding in the company. The decision to invest in Tesla should be based on a careful consideration of the pros and cons, as well as an assessment of one’s risk tolerance and investment goals.

The upcoming June 13th shareholders meeting could have a significant impact on the future direction of the company and its stock price. As Tesla navigates the challenges and opportunities in the electric vehicle and AI industries, investors will need to stay informed and adapt their strategies accordingly.