TSLA

Tesla is trading above $420 today! Rising by as much as 20%, or $70 compared to the opening price of around $350 per share just three business days ago, at the pre-market on September 11. Taking summer consolidation lows for bigger long bets has borne many sweet fruits.

You know, I was among those Tesla optimist campers who vowed sleeplessly and loudly enough about an inevitable move well beyond a multi-month $350 barrier soon. Meanwhile, the area of $420 has been considered by many enthusiasts, including me, as the first likely mid-term target. And I keep my next price target for another half of my personal stake in Tesla just a bit above $500, valid for late 2025 or early 2026. However, this mark of $420 deserves at least half of the profit-taking volume. Surely, not only because it is one of Elon Musk's favourite numbers, inextricably linked to the pot culture he aimed at in his very old tweets years ago. The point is that the mark was also reached too quickly right at the moment. If we had been climbing here gradually for several weeks, I wouldn't even have looked back at this step only to take a breath, but now the horny crowd produced a kind of too volatile scenario.

While I understand Tesla as a very real and powerful value as a giant business not just in the segment of cutting-edge electric cars and also parts and gas stations for them, but as a pioneer in AI robotics, I'm a little put off by the overly lightweight reasons behind the stock's recent rise.

In an interview with Bloomberg TV last Friday morning, Tesla board chair Robyn Denholm clearly dismissed all those quite common misconceptions that Elon Musk’s political activity had allegedly depressed Tesla sales globally. She called the eccentric multi billionaire as "front and center" at the company after he resigned from his temporary job at the White House. "What he does from a personal perspective in terms of his political motivations is up to him," she added as "obviously we’re in a democracy, so everyone gets to voice their points of view". Robyn Denholm delivered all those comments just days after Tesla’s board officially launched a $1 trillion "compensation plan" for CEO Elon Musk, in what would be the largest corporate pay package in history. Denholm admitted there’s some investor fatigue around the matter of Musk’s previous controversial 2018 pay plan of roughly $50 billion, still nominally tied up in a Delaware court. But she thinks the latest $1 trillion proposal is what investors want, even despite the Cybertruck, launched in 2023, is still not in the sales top while Tesla's pretentious bet on robot cars' wide distribution all over the world is still in its infancy with a limited taxi service in Texas. “Our view is the opportunity ahead is far greater with Elon at the helm than without,” she emphasized.

Well, Musk’s ambitions into party politics heightened concerns among Tesla investors. The board has recommended shareholders, during its annual meeting, to vote against a radical proposal on political neutrality, which could prohibit the company's team from endorsing any political party. This will not hurt sales, the board chair said, but without mentioning new figures. That's very good, but many were wondering if that was enough for a 7.5% price move to the upside in one day on September 12. The genuine background behind the move was revealed today, after a regulatory filing showed that Elon Musk himself had purchased nearly $1 billion worth of Tesla stock in the course of that Friday's session. Before this, Musk held a roughly 13% stake in Tesla, and this Monday he disclosed additional buying of 2.57 million Tesla shares in open-market transactions on Friday. He paid between $372.37 and $396.54 per one item, showing much confidence in the further price growth. That's why last Friday's move was so fast, as many investors eagerly joined Mask-initiated rise. And Tesla shares jumped up to another 8% on Monday, because of the same news on Musk's purchase. What a cool way to move a stock price up and then hit the Repeat button just by talking about it! Gorgeous, I'm enchanted! He already earned much money by spending $1 billion only, out of this future $1 trillion income, and he also increased his share at Tesla.

Before that, Musk threatened to build AI and robotics products somewhere outside of Tesla if he cannot get 25% voting power. Now his strategy is clearer to do this inside the Tesla company, and he will surely not sell his stake at $420 or even above $500. But I am a small investor to earn my little money, and I will take some profit here at $420 and hope to repeat this successful action somewhere above $500 as well some time later.