Tesla's stock surged a whopping 23% on Tues. Feb 4, 2020, pushing its market value up more than 3,600% since the electric-car maker first sold stock in 2010. Its current share price is hovering at around $950.
If you invested back then when the initial public offering's price per share was just $17, your investment would have paid off. Nearly a decade later, a $1,000 investment in Tesla made in 2010 would be worth more than $36,000 as of Feb. 4, 2020, according to CNBC calculations. By comparison, a $1,000 investment in the S&P 500 would have earned a total return of just over 281% over the same period.
While Tesla has performed well overall, any individual stock can over- or underperform and past returns do not predict future results.
There are many speculations as to why Tesla's stock jumped so much on Tuesday. While it could be that investors are experiencing a serious case of FOMO after the company's major shareholder Ron Baron predicted Tesla's value will exceed $1 trillion in the next 10 years, shares have seen above-average volume on retail trading platforms like Robinhood, an investing app that's often favored by millennials, which could be adding to the rally gaining steam.
CNBC: Tesla stock as of Feb. 2020.
Despite Tesla's sudden spike, the company's faced past challenges that caused its market performance to falter.
In August 2018, Tesla's CEO, Elon Musk, sparked controversy with a now infamous tweet that said: "Am considering taking Tesla private at $420. Funding secured."
On the same day, Musk also published a letter on Tesla's website explaining his thinking. "Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible," he wrote in the letter, which was also sent to Tesla employees.
After the take-private tweets, Musk faced fraud charges from the SEC. The financial regulator alleged his claims that he had "funding secured," were false and misleading. Musk and Tesla reached a settlement agreement with the SEC over the offending tweets. As a result of the settlement, Musk and Tesla each paid a $20 million fine, and Musk was forced to resign from his chairman role on Tesla's board.
While Tesla shares suffered due to Musk's Twitter activity, its stock has been on the rebound. By December 2019, its shares had reached an all-time high — with a share price of $393.15 — which even surpassed intraday highs reached when CEO Elon Musk sent his "funding secured" tweet.
In 2019, it was reported that Tesla brought in $24.6 billion in revenue, which is a $2.8 billion increase from the year prior. And, in the past six months, its stock grew 220% and exceeded a share price of $700 for the first time ever.
Last week, Musk announced he's recruiting new staffers for Tesla's artificial intelligence team — and he doesn't care if you have a high school degree. Instead, the CEO is planning on requiring candidates to "pass a hardcore coding test" and have a "deep understanding" of artificial intelligence.
If you are thinking about getting into investing, experts often advise starting with index funds, which hold every stock in an index, such as the S&P 500. Seasoned investor Warren Buffett agrees that it's a smart idea to start with index funds, in part because they fluctuate with the market, making them less risky than individually selected stocks.
Here's a snapshot of how the markets look now.
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