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- ARK Invest’s Cathie Wood made a sample call in 2018, predicting that Tesla would achieve $ 4,000 within five years, representing a potential upward trend of around 1,200% at the time.
- The headache, which many people doubted, came when Tesla struggled to increase its Model 3 production and faced a liquidity problem.
- Tesla rose more than 7% on Thursday, meeting Cathie Wood’s $ 4,000 price target on a split adjusted basis.
- This is explained where ARK Invest thinks that Tesla share can go next.
- See here how Tesla trades.
In 2018, Cathie Wood of ARK Invest made a call about Tesla: the share will reach $ 4,000 within five years.
Wood’s call raised eyebrows because it came at a time when Tesla was experiencing huge difficulties in sharpening production of its popular Model 3, was constantly dealing with quality control issues and had a looming liquidity problem. on the verge of bankruptcy.
Even Tesla CEO Elon Musk recently said that during the “darkest days” of Apple Model 3 production, he approached Tim Cook about acquiring the iPhone maker, but Cook declined to take the meeting.
At the time of the ARK forecast, Tesla shares were trading around $ 300 per share, which means that a rise to $ 4,000 would represent an upward potential of around 1 200%.
Wood doubled her call in Tesla in August 2018 in an open letter to Musk, urging him not to take the company privately after tweeting: “Funding secured.”
Tesla achieved Wood’s price target on Thursday, with shares closing at $ 816, or $ 4,080 on a split adjusted basis. Last summer, Tesla split a 5-for-1 share.
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The meteoric rise in Tesla occurred when the company successfully scaled down the production of its Model 3. In 2020, Tesla missed its 500,000 delivery target with just a few hundred vehicles, even amid a pandemic that shut down its California production facility for more than a month. .
Other factors that helped boost Tesla shares by 743% in 2020 include the December addition to the S&P 500 index and investors charging a premium to electric vehicle manufacturers over the prospect of a Joe presidency Biden and his agenda for green energy.
With Tesla hitting Wood’s target two years ahead of schedule, the company now has a $ 7,000 price target for Tesla, or $ 1400 split split, representing a potential 72% increase from Thursday’s close.
“Based on our updated expectations for the decline and demand for electric vehicles (EVs), as well as our estimates for the potential profitability of robot tax, our expected value per share for TSLA of 2024 is $ 7,000,” said Sam Korus, analyst at ARK, said last year.
The boom in Tesla has made Musk the richest man in the world and the company is now the fifth most valuable company in the S&P 500, which recently outperformed Facebook.
But not everyone believes that the rally in Tesla will last, and ‘Big Short’ investor Michael Burry said the Tesla share would only implicate like the 2007 housing bubble.
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