Tesla's stock has been a rollercoaster for investors, but recent developments could push it onto a rougher track. Yesterday, Tesla closed at $394.36, a far cry from its 52-week low of $138.80 but below its high of $488.54. Despite this impressive growth, I’ve maintained skepticism about its valuation. Even when Tesla was trading around $190, I considered it significantly overvalued. Now, with the stock price much higher, it’s firmly out of my consideration for investment.
Tesla Motors (TSLA)
Adding to my hesitation, NHTSA recently announced an investigation into nearly 2.6 million Tesla vehicles. The probe raises concerns about safety and compliance issues, potentially leading to recalls, fines, or reputational damage—all of which could weigh on Tesla’s stock price. The uncertainty stemming from this investigation makes the stock even less appealing to me.
Another key factor in my decision is Tesla’s lack of dividends. My investment strategy leans heavily toward dividend-paying stocks, which provide steady income and tend to be less volatile. Tesla’s growth-focused model doesn’t align with this preference, as it reinvests earnings into expansion and innovation rather than rewarding shareholders with dividends. While this strategy might appeal to growth investors, it doesn’t fit my portfolio goals.
Given these considerations, Tesla remains off my radar, and I wouldn’t be surprised to see the stock dip further, potentially toward the $350 mark or lower, if the NHTSA investigation intensifies or other headwinds emerge.
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