Elon Musk earned $ 11 billion thanks to… going to court, Tesla is still the ‘darling’ of Wall Street in 2023

According to Bloomberg news, Elon Musk is attending a trial over Twitter tweets in 2018 about his intention to buy back all of Tesla’s shares, thereby being accused of market manipulation.

Ironically, thanks to this trial, the Tesla founder’s total net worth increased by the most in more than 2 months. At the same time, many experts also think that this electric car company will still be the darling of Wall Street in 2023 despite the controversy of the founder.

Data from the Bloomberg Billionaires Index shows that since January 20, 2023, Elon Musk’s total net worth has increased by $ 10.6 billion to $ 145.2 billion, equivalent to the sharpest increase since November/November. 2022.

Elon Musk is currently in court over Twitter posts in 2018 expressing his intention to buy back a controlling stake in Tesla for $420 a share. This billionaire said he would take the company SpaceX as collateral to implement the above plan.

Bloomberg figures show that Elon Musk’s 49 percent stake in SpaceX is now worth about $49 billion.

However, this plan was later abandoned, leading investors to accuse these posts of Elon Musk of manipulating the stock market and causing many people to suffer losses.

The Tesla founder said there was no link between his post and the stock market, even though shares of the electric car company jumped 13.3 percent following Elon Musk’s tweets.

The world’s second-richest billionaire used to hold 19% of Tesla shares in 2018 and could increase to 25% if he exercised the option to buy bonus shares.

However, Elon Musk currently holds only 13% of Tesla shares after selling nearly $ 40 billion of shares since the end of 2021 to pay taxes and raise enough capital to buy back Twitter.

At the trial, Elon Musk said the plan to buy back a controlling stake in Tesla was “no joke”, but he encountered some challenges and was not able to implement it.

My darling

According to the Wall Street Journal (WSJ), Wall Street is still very fond of Tesla. Despite a turbulent 2022, from production cuts in China to the controversy of Elon Musk’s acquisition of Twitter causing investors to sell off electric car shares, Tesla is still considered the darling of the market. US stock market in 2023.

FactSet’s survey of analysts found that 64% of Tesla’s stock should be bought in 2023. This is the highest percentage since late 2014.

The average buy-in price according to the above survey is about $194 per share, while Tesla’s current price is $143.75 as of January 23, 2023, or 26% lower.

The main reason for this optimism is that many people still believe in Tesla’s ability to dominate the electric vehicle market.

Data from research firm Motor Intelligence shows that despite many difficulties and slowing growth, the company’s sales will still increase in 2022, even as sales of the US auto industry as a whole fall by 8%.

According to the WSJ, even when a series of big brands like Ford, GM or Hyundai have jumped into the electric car market in recent years, they still have to follow Tesla. Elon Musk’s empire currently holds 65% of the US electric car market.

“Despite the challenges, we believe Tesla is in a favorable position in both the short and long term,” said Ben Kallo, analyst at Baird.

Even Wedbush Securities analysts Daniel Ives and John Katsingris think that Tesla stock has been oversold.

According to Mr. Ives, Tesla’s reduction in electric vehicle prices will boost sales in key markets like China. This expert’s survey found that nearly 70% of respondents said that they would choose to buy a Tesla Model Y because of the lower price first.

Revival

The WSJ reports that Tesla’s stock has grown well during the epidemic season and will only be affected in 2022 when inflation increases and the US decision to raise interest rates. Therefore, with the expectation that the US Federal Reserve (FED) will cut interest rates in the second half of 2023, many investors believe that Tesla stock will grow again.

Although the electric car company’s stock price is still below its 2021 peak, it has increased 17% since the beginning of 2023, much higher than the 4.7% average increase of the S&P 500.

“We’re more bullish than ever on Tesla,” said ARK Investment Management founder Cathie Wood, predicting the stock will grow fivefold over the next five years.

*Source: Bloomberg, WSJ