Tesla stock rises on Shanghai factory optimism—what to watch now

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Telsa shares pop on positive news from China—Three experts on what's next for the company

Tesla's wild swings are apparently far from over.

The electric-car maker's stock climbed 3% on Monday after Shanghai's municipal government said it would help companies including Tesla get their operations back up and running again after coronavirus-related suspensions. Tesla shares initially popped more than 9.5% earlier in the session before receding.

Market commentators, still baffled by Tesla's recent moves, largely saw the action as part of a broader trend higher for the surging stock.

Here's what three of them were watching:

Roger McNamee, co-founder and managing director of Elevation Partners, said this could be a case of history repeating itself, or at least rhyming:

"I look at it and say, 'It may be the battery that's driving the business, but it's jet fuel that's driving the stock.' And it just feels like 20 years ago. For those of us who've been around a while, the late '90s saw a lot of that kind of action, and it's really fun to watch. I can't imagine owning the stock right now just because what do you [do]? I mean, who knows? It's so wild. And this is what makes markets great, because, at the end of the day, it's about buyers and sellers. And the shorts … can sit there and give you 100 pages of good data why the stock is overpriced, and in the short run, it doesn't make any difference because there's a lot of enthusiasm. … You look at this and go, 'This is obviously an extraordinarily well-discovered stock.' It's an incredibly high-priced stock and it has fans who just support it. It's a cult-like situation, and Wall Street gets these from time to time. And you know what happens at the end. Eventually, it does come back down to something realistic, but when does that happen? It doesn't happen until a lot of people have been burnt to a crisp."

Sam Jaffe, co-founder and managing director of Cairn Energy Research Advisors, flagged Tesla's powerful first-mover advantage:

"Tesla has a lead in technology. They started earlier than the other carmakers, so, they've got a few years' lead in the horse race. They have better battery technology right now, better battery pack technology, all the way up to the way that they control the battery pack, and it's a significant lead. … Tesla has reached scale in a way that nobody else has yet, although that's changing quickly. We've got a number of announcements from other carmakers that they're going to be building 35, 50-gigawatt-hour factories with their battery partners, but Tesla is already there and they're growing just as fast, too. … The battery management system is what controls the battery pack and it used to be a very dumb piece of software and hardware, and Tesla has really revolutionized that part of the battery pack and made it much more sophisticated, and it gives them a competitive advantage."

Jay Jacobs, head of research and strategy at Global X ETFs, pointed to his firm's Lithium & Battery Tech ETF (LIT), which has an 11% stake in Tesla, as a good way to play the trends driving the company's success:

"Tesla's the poster child of a broader trend, which is the growth of the electric vehicle space. So, right now, electric vehicles make up less than 3% of total car sales around the world. It's an 80 million annual market in car sales. People don't know about the miners, they don't know about the battery producers, but they want exposure to the broader EV space."

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