Tesla shares jumped on Thursday after the company announced a $2 billion stock offering.
Here's what five experts are watching now.
Aswath Damodaran, professor at NYU Stern School of Business, explains why Tesla scares investors and is the "bread and butter" for traders.
I describe Tesla as my corporate teenager. Every day I wake up and it's got lots of potential and then it says, "What can I do today to screw it all up?" That's not going to change today, it's not going to change next week. ... This company has immense potential, but there'll be things that show up and say, "What the heck are they doing?" ... When you have a story stock and the mood is right it doesn't really matter what the fundamentals are, people are going to push up the price. That's scary if you're an investor, but if you're a trader this is your bread and butter.
Dan Ives, managing director at Wedbush Securities, praises Tesla for its strategic move and how this changes the story.
I think when you look at the situation for Tesla ... it's a smart strategic move ... This from a board perspective is something, and even for the bulls, I think the Tesla story potentially changes with this, in terms of now what's happened with the balance sheet. I think it's going to be hard for bears to make their case.
Ten days ago, we weren't as worried about China. ... Ralph Lauren told you 10 days ago that things look pretty good. They put out some numbers today which says that things look pretty bad. So, there's real changes. I think that Musk obviously, like everybody else, is trying to keep his workers healthy but wants to expand there, and he's got a chance. And why not take advantage of it? I think there are some people who don't understand that there is no law against a stock appreciating 100 points and you now selling where you wouldn't have down below 100. He didn't do anything wrong. If anything he did what you want.
Kari Firestone, chairman and CEO of Aureus Asset Management, said the illogical growth of Tesla makes it difficult to price.
It's a cult. It doesn't relate to logic and earnings per share. It's a cult, so people believe in Elon Musk. They think that he is unstoppable, he's invincible. He's created a great franchise. People love the car, and that's what it's about. So, it's really hard to price.
Steve Weiss, managing partner at Short Hills Capital Partners, said Tesla could have been even more generous with their stock offering.
I think the only mistake in doing $2 billion is that they should have done $4 billion to $5 billion. ... This is no different than a biotech stock that reports phase three results — stock goes way high and they immediately come with an offering. So, funding and the balance sheet being one of the concerns here, they could have gotten to $5 billion for it. ... But look, to me the same story applies whether it's up $500 from me here or down $500. So, that's why I'm not here, but I wouldn't short it.