Over the past few weeks, they have been recovering shares of Elon Musk’s electric vehicle maker at a blistering pace, setting repeated records for one-day purchases. Already in 2023, they’ve spent $13.6 billion net on Tesla stock, approaching a record sum of nearly $17 billion for all of last year, according to Vanda Research.
Their interest in Tesla far eclipses that of any other title.
“Global retail inflows into Tesla have never been higher,” said Giacomo Pierantoni, chief data officer at Vanda, who added that buying from individual investors likely contributed to the 61% rise in the price. share price this year.
Tesla investors have a reputation for being loyal. They rushed to buy the dip last year when the stock crashed and continued to build after hitting bottom on Jan. 3. Heading into Wednesday’s highly-anticipated investor day, buying set new records.
The five-day moving average of one-day net purchases by individual investors reached around $460 million in the last week of February, according to Vanda. The average for the second most popular stock, the SPDR S&P 500 exchange-traded fund, was just under $150 million.
Three stocks followed: ETF Invesco QQQ, a Nasdaq-100 tracker; Apple Inc.
; and Amazon.com Inc.,
with interest at only a fraction of those levels.
Individual investors invested more than $500 million in Tesla shares on Wednesday ahead of Investor Day, which began at 4 p.m. ET. The event largely failed to live up to its hype. Some investors had hoped that a new, less expensive vehicle would be announced, to no avail. Additionally, the company said it may need to spend nearly $150 billion in the coming years to achieve its long-term goal of becoming the world’s largest automaker by volume.
The stock fell 5.9% on Thursday after the day for investors, but recouped most of those losses on Friday to close at $197.79. Tesla shares are still down more than 50% from their November 2021 high of $409.97.
Durga Bobba, an investor who works in vaccine marketing at a pharmaceutical company, said she first bought Tesla shares in December. Mr Bobba, who splits his time between San Francisco and Philadelphia, had been interested in Tesla for some time and said he saw an attractive entry point late last year after researching its finances. . “I saw the stock hit a multi-year low and I thought, ‘If I ever have to, now is the time,'” Bobba said.
“I’m a marketing guy, and general appeal was the #1 reason I bought Tesla,” he added. “People love it, regardless of age and gender.”
Mr. Bobba is one of several recent buyers sitting on substantial gains. “I bought it for about $110 per share and I’m very happy,” he said. “I will probably never sell.”
Tesla shares are currently trading at about 45 times the company’s projected earnings over the next 12 months, a far cry from their peak of more than 200 times earnings, according to FactSet. At the sale late last year, Tesla’s multiple approached 19.
In comparison, the multiples of General Motors Co.
Ford engine Co.
and the S&P 500 are 6.8, 8.5 and 17.6 respectively.
The Federal Reserve’s campaign to raise interest rates changed the calculus for Tesla and other growth stocks last year. The stock came under additional pressure in late 2022 when Tesla slashed car prices and investors grew more concerned that Mr. Musk was distracted by his newly acquired Twitter Inc.. Stocks ended the year down 65%, their worst annual decline to date. .
They rebounded in 2023 with some of the other more speculative investments in the market, such as bitcoin and Cathie Wood’s ARK Innovation ETF..
Tesla’s recent trading has stood out even against the pandemic-era frenzy of 2020 and 2021, said Anthony Denier, managing director of online brokerage Webull Financial LLC.
“Tesla reigns supreme on our platform,” Denier said. “We’ve seen a huge spike in volume since December.”
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The proportion of accounts at Webull trading Tesla rose to 18% in February from around 4% six months ago, Denier said. Trading in Tesla, which typically represents less than 10% of Webull stock volume on any given day, has reached about 35% of total three-day volume this year, he said.
Tesla is also one of the most popular players in the options market. Many of the biggest long-standing bets on Tesla are lottery ticket swaps requiring statistically improbable moves to be paid out. One of those bets is for the stock to reach $825 by January 2024. Nine of the 10 most popular contracts involve expectations for the stock to rise.
Many other investors are acting against Tesla. The electric vehicle maker remains the best-selling stock in the United States, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners. Short-term interest in the stock, however, fell to $15 billion on Wednesday from a high of more than $51 billion in January 2021.
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