Tesla Getting Trounced by S&P 500 Three Years After Joining

Bloomberg2023-12-21

EV-maker up 6.7% since 2020 entry, trailing index’s 27% gain‘Tesla’s valuation was way overdone’ at time of inclusionTesla shares closed around $232 on Dec. 18, 2020, the session before the company ...

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JinHan
2023-12-21
JinHan
Pretty debatable headline. To compare performance since entering the index vs other benchmarks.$Tesla Motors(TSLA)$ still bullish and it'll eventually outperform the index.

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Today they’re about $258, a roughly 11% increase.Exactly three years ago tomorrow, Tesla Inc. finally started trading on the S&P 500 Index. Since then, the company’s stockholders have been on a wild ride that’s left them wondering if they should’ve just put their money in the broad equities benchmark.Tesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&P 500. Today they’re about $247, a 6.7% increase based on closing prices. Meanwhile, the S&P 500 has climbed roughly 27%, led by mega-cap technology stocks such as Microsoft Corp., Apple Inc. and Nvidia Corp. Tesla, which has the seventh-largest weighting in the index, is among the bottom half of S&P performers over that time.“Tesla’s valuation was way overdone when they went into the S&P, so it is no wonder the shares are underperforming and will likely do so for the next couple years,” Craig Irwin, an analyst at Roth Capital Partners, said in an interview. “Trading the volatility is the right strategy to make money in the stock currently.”Indeed, Tesla’s lackluster three-year return masks a highly volatile run. At one point, the stock was up nearly 80% from its price right before joining the S&P, while at another it was less than half that value.Rally Covers WoundsLooking ahead, conditions could get even more challenging for Tesla as demand for electric vehicles cools. Even the company’s dominant position in the sector, which makes it perhaps the only viable bet for investors in the industry, may not be enough to help its stock price in the coming years.Still, the euphoric rally that preceded Tesla’s entry into the S&P 500 makes the stock’s weak showing palatable to some investors. The shares rose a staggering 731% in 2020 through Dec. 18 as expectations that the company would soon gain blue-chip status lured both institutional and retail investors.Getting a spot in the S&P meant many fund managers who were wary of the volatility, the company’s flamboyant and unpredictable chief executive officer, Elon Musk, and the nascent EV industry had to take notice. And for funds tracking the benchmark, portfolio managers were required to buy Tesla shares to reflect the index’s new makeup.“Passive index investors jumping in after the run-up in 2020 have not had a great return considering the volatility,” said Jerry Braakman, chief investment officer at First American Trust, which held about 16,000 Tesla shares as of Sept. 30. But “change the starting point just a little and it is obvious how much value can be created by holding Tesla.”The question from here is how much room there is left in a market valuation that already towers above other carmakers and resembles the biggest tech companies.Autonomous FutureWall Street’s current consensus seems to be: maybe none.Analysts’ average price target on Tesla reflects an expectation for the stock to fall about 2.4% over the next 12 months. That’s not surprising, given that demand for electric cars is widely projected to fade in 2024, before picking up again.As auto companies including Tesla, EV suppliers and even car-rental companies have said in recent months, it appears that the pool of first adopters for the technology has been tapped out, and a mix of questions around the economy, expensive vehicles and high interest rates are keeping mainstream buyers away.And then there’s the hope that Tesla will be able to build a truly self-driving car before anyone else does.As Nicholas Colas at DataTrek Research sees it, about two-third of the company’s valuation hinges on the success of its “full self driving” technology. But that has seen some stumbles. The most recent setback came last week when Tesla said it will recall over two million cars after the top US auto-safety regulator said the system doesn’t do enough to prevent misuse.“Tesla’s valuation and therefore volatility and potential future return is inextricably linked to its ability to deliver a truly autonomous vehicle,” Colas said. “Investors who think that’s going to happen will own the stock. Those who doubt Tesla can get to that finish line first or second won’t. It’s a pretty binary investment case at this point.”","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":0},"commentList":[{"id":254272908640496,"gmtCreate":1703115082470,"gmtModify":1703115085431,"author":{"id":"3581586102966898","authorId":"3581586102966898","name":"JinHan","avatar":"https://community-static.tradeup.com/news/023377e47661ee615bf8b22d4bd036e3","vip":1,"crmLevel":5,"crmLevelSwitch":0},"htmlText":"Pretty debatable headline. To compare performance since entering the index vs other benchmarks.<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$&nbsp;</a><v-v data-views=\"1\"></v-v>still bullish and it'll eventually outperform the index.&nbsp;","listText":"Pretty debatable headline. To compare performance since entering the index vs other benchmarks.<a href=\"https://ttm.financial/S/TSLA\">$Tesla Motors(TSLA)$&nbsp;</a><v-v data-views=\"1\"></v-v>still bullish and it'll eventually outperform the index.&nbsp;","text":"Pretty debatable headline. To compare performance since entering the index vs other benchmarks.$Tesla Motors(TSLA)$ still bullish and it'll eventually outperform the index.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/254272908640496","repostId":2392419772,"repostType":2,"repost":{"id":"2392419772","pubTimestamp":1703114809,"share":"https://www.laohu8.com/m/news/2392419772?lang=&edition=full","pubTime":"2023-12-21 07:26","market":"us","language":"en","title":"Tesla Getting Trounced by S&P 500 Three Years After Joining","url":"https://stock-news.laohu8.com/highlight/detail?id=2392419772","media":"Bloomberg","summary":"EV-maker up 6.7% since 2020 entry, trailing index’s 27% gain‘Tesla’s valuation was way overdone’ at time of inclusionTesla shares closed around $232 on Dec. 18, 2020, the session before the company jo","content":"<html><head></head><body><ul style=\"\"><li><p>EV-maker up 6.7% since 2020 entry, trailing index’s 27% gain</p></li><li><p>‘Tesla’s valuation was way overdone’ at time of inclusion</p></li></ul><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e2bcbd9c19f79d916ea2f61b7d1b51d2\" alt=\"Tesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&amp;P 500. Today they’re about $258, a roughly 11% increase.\" title=\"Tesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&amp;P 500. Today they’re about $258, a roughly 11% increase.\" tg-width=\"2000\" tg-height=\"1334\"/><span>Tesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&amp;P 500. Today they’re about $258, a roughly 11% increase.</span></p><p style=\"text-align: start;\">Exactly three years ago tomorrow, Tesla Inc. finally started trading on the S&amp;P 500 Index. Since then, the company’s stockholders have been on a wild ride that’s left them wondering if they should’ve just put their money in the broad equities benchmark.</p><p style=\"text-align: start;\">Tesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&amp;P 500. Today they’re about $247, a 6.7% increase based on closing prices. Meanwhile, the S&amp;P 500 has climbed roughly 27%, led by mega-cap technology stocks such as Microsoft Corp., Apple Inc. and Nvidia Corp. Tesla, which has the seventh-largest weighting in the index, is among the bottom half of S&amp;P performers over that time.</p><p>“Tesla’s valuation was way overdone when they went into the S&amp;P, so it is no wonder the shares are underperforming and will likely do so for the next couple years,” Craig Irwin, an analyst at Roth Capital Partners, said in an interview. “Trading the volatility is the right strategy to make money in the stock currently.”</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a75f6a76ea195020b83f492109d83ed6\" tg-width=\"1200\" tg-height=\"675\"/></p><p>Indeed, Tesla’s lackluster three-year return masks a highly volatile run. At one point, the stock was up nearly 80% from its price right before joining the S&amp;P, while at another it was less than half that value.</p><h3 id=\"id_587637886\" style=\"text-align: start;\">Rally Covers Wounds</h3><p style=\"text-align: start;\">Looking ahead, conditions could get even more challenging for Tesla as demand for electric vehicles cools. Even the company’s dominant position in the sector, which makes it perhaps the only viable bet for investors in the industry, may not be enough to help its stock price in the coming years.</p><p>Still, the euphoric rally that preceded Tesla’s entry into the S&amp;P 500 makes the stock’s weak showing palatable to some investors. The shares rose a staggering 731% in 2020 through Dec. 18 as expectations that the company would soon gain blue-chip status lured both institutional and retail investors.</p><p style=\"text-align: start;\">Getting a spot in the S&amp;P meant many fund managers who were wary of the volatility, the company’s flamboyant and unpredictable chief executive officer, Elon Musk, and the nascent EV industry had to take notice. And for funds tracking the benchmark, portfolio managers were required to buy Tesla shares to reflect the index’s new makeup.</p><p style=\"text-align: start;\">“Passive index investors jumping in after the run-up in 2020 have not had a great return considering the volatility,” said Jerry Braakman, chief investment officer at First American Trust, which held about 16,000 Tesla shares as of Sept. 30. But “change the starting point just a little and it is obvious how much value can be created by holding Tesla.”</p><p style=\"text-align: start;\">The question from here is how much room there is left in a market valuation that already towers above other carmakers and resembles the biggest tech companies.</p><h3 id=\"id_3014379412\" style=\"text-align: start;\">Autonomous Future</h3><p style=\"text-align: start;\">Wall Street’s current consensus seems to be: maybe none.</p><p style=\"text-align: start;\">Analysts’ average price target on Tesla reflects an expectation for the stock to fall about 2.4% over the next 12 months. That’s not surprising, given that demand for electric cars is widely projected to fade in 2024, before picking up again.</p><p>As auto companies including Tesla, EV suppliers and even car-rental companies have said in recent months, it appears that the pool of first adopters for the technology has been tapped out, and a mix of questions around the economy, expensive vehicles and high interest rates are keeping mainstream buyers away.</p><p style=\"text-align: start;\">And then there’s the hope that Tesla will be able to build a truly self-driving car before anyone else does.</p><p style=\"text-align: start;\">As Nicholas Colas at DataTrek Research sees it, about two-third of the company’s valuation hinges on the success of its “full self driving” technology. But that has seen some stumbles. The most recent setback came last week when Tesla said it will recall over two million cars after the top US auto-safety regulator said the system doesn’t do enough to prevent misuse.</p><p style=\"text-align: start;\">“Tesla’s valuation and therefore volatility and potential future return is inextricably linked to its ability to deliver a truly autonomous vehicle,” Colas said. “Investors who think that’s going to happen will own the stock. Those who doubt Tesla can get to that finish line first or second won’t. It’s a pretty binary investment case at this point.”</p></body></html>","source":"lsy1584095487587","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Tesla Getting Trounced by S&P 500 Three Years After Joining</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTesla Getting Trounced by S&P 500 Three Years After Joining\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-12-21 07:26 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.bloomberg.com/news/articles/2023-12-20/tesla-is-getting-trounced-by-s-p-500-three-years-after-joining><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>EV-maker up 6.7% since 2020 entry, trailing index’s 27% gain‘Tesla’s valuation was way overdone’ at time of inclusionTesla shares closed around $232 on Dec. 18, 2020, the session before the company ...</p>\n\n<a href=\"https://www.bloomberg.com/news/articles/2023-12-20/tesla-is-getting-trounced-by-s-p-500-three-years-after-joining\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0056508442.USD":"贝莱德世界科技基金A2","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","BK4555":"新能源车","BK4533":"AQR资本管理(全球第二大对冲基金)","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","TSLA":"特斯拉","LU2063271972.USD":"富兰克林创新领域基金","BK4559":"巴菲特持仓","BK4550":"红杉资本持仓","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","LU1720051017.SGD":"Allianz Global Artificial Intelligence AT Acc H2-SGD","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","BK4551":"寇图资本持仓","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU1548497426.USD":"安联环球人工智能AT Acc","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","BK4511":"特斯拉概念","BK4099":"汽车制造商"},"source_url":"https://www.bloomberg.com/news/articles/2023-12-20/tesla-is-getting-trounced-by-s-p-500-three-years-after-joining","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2392419772","content_text":"EV-maker up 6.7% since 2020 entry, trailing index’s 27% gain‘Tesla’s valuation was way overdone’ at time of inclusionTesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&P 500. Today they’re about $258, a roughly 11% increase.Exactly three years ago tomorrow, Tesla Inc. finally started trading on the S&P 500 Index. Since then, the company’s stockholders have been on a wild ride that’s left them wondering if they should’ve just put their money in the broad equities benchmark.Tesla shares closed around $232 on Dec. 18, 2020, the session before the company joined the S&P 500. Today they’re about $247, a 6.7% increase based on closing prices. Meanwhile, the S&P 500 has climbed roughly 27%, led by mega-cap technology stocks such as Microsoft Corp., Apple Inc. and Nvidia Corp. Tesla, which has the seventh-largest weighting in the index, is among the bottom half of S&P performers over that time.“Tesla’s valuation was way overdone when they went into the S&P, so it is no wonder the shares are underperforming and will likely do so for the next couple years,” Craig Irwin, an analyst at Roth Capital Partners, said in an interview. “Trading the volatility is the right strategy to make money in the stock currently.”Indeed, Tesla’s lackluster three-year return masks a highly volatile run. At one point, the stock was up nearly 80% from its price right before joining the S&P, while at another it was less than half that value.Rally Covers WoundsLooking ahead, conditions could get even more challenging for Tesla as demand for electric vehicles cools. Even the company’s dominant position in the sector, which makes it perhaps the only viable bet for investors in the industry, may not be enough to help its stock price in the coming years.Still, the euphoric rally that preceded Tesla’s entry into the S&P 500 makes the stock’s weak showing palatable to some investors. The shares rose a staggering 731% in 2020 through Dec. 18 as expectations that the company would soon gain blue-chip status lured both institutional and retail investors.Getting a spot in the S&P meant many fund managers who were wary of the volatility, the company’s flamboyant and unpredictable chief executive officer, Elon Musk, and the nascent EV industry had to take notice. And for funds tracking the benchmark, portfolio managers were required to buy Tesla shares to reflect the index’s new makeup.“Passive index investors jumping in after the run-up in 2020 have not had a great return considering the volatility,” said Jerry Braakman, chief investment officer at First American Trust, which held about 16,000 Tesla shares as of Sept. 30. But “change the starting point just a little and it is obvious how much value can be created by holding Tesla.”The question from here is how much room there is left in a market valuation that already towers above other carmakers and resembles the biggest tech companies.Autonomous FutureWall Street’s current consensus seems to be: maybe none.Analysts’ average price target on Tesla reflects an expectation for the stock to fall about 2.4% over the next 12 months. That’s not surprising, given that demand for electric cars is widely projected to fade in 2024, before picking up again.As auto companies including Tesla, EV suppliers and even car-rental companies have said in recent months, it appears that the pool of first adopters for the technology has been tapped out, and a mix of questions around the economy, expensive vehicles and high interest rates are keeping mainstream buyers away.And then there’s the hope that Tesla will be able to build a truly self-driving car before anyone else does.As Nicholas Colas at DataTrek Research sees it, about two-third of the company’s valuation hinges on the success of its “full self driving” technology. But that has seen some stumbles. The most recent setback came last week when Tesla said it will recall over two million cars after the top US auto-safety regulator said the system doesn’t do enough to prevent misuse.“Tesla’s valuation and therefore volatility and potential future return is inextricably linked to its ability to deliver a truly autonomous vehicle,” Colas said. “Investors who think that’s going to happen will own the stock. Those who doubt Tesla can get to that finish line first or second won’t. It’s a pretty binary investment case at this point.”","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":14,"commentSize":0,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2392419772"}