Tesla shares recovered 40% loss and Elon Musk became the richest man again
Investors praised second-quarter deliveries and helped Elon Musk regain his top spot on the list of the world's richest people.
• Tesla (TSLA) stock is making such a strong comeback. After losing a painful 40% between January and the end of April, the electric vehicle maker has nearly recouped all of its losses and is down just 0.8% for the year. Investor optimism helped Tesla recover from such a deep loss, even if the electric car maker did not exceed all expectations.
• Over the past couple of months, Tesla shares have jumped an impressive 75%, or more than $300 billion added to the company's market capitalization. Most recently, earlier this week, Tesla released its second-quarter delivery data, and the buzz extended the stock price to a two-day gain of about 17%. Despite a year-over-year drop in the number of vehicles shipped to customers, the 443,956 deliveries beat Wall Street consensus and sparked the rally.
• The growth was enough to return Elon Musk to the top spot among the world's richest people. According to the Bloomberg Billionaires Index, Musk's net worth now stands at $252 billion, and he added about $11 billion to that on Wednesday alone. Second on the list is Jeff Bezos, Amazon AMZN, who has amassed a fortune of $219 billion.
• Tesla shares rose about 17% on Tuesday and Wednesday after the company released its quarterly delivery data. A total of 443,956 electric vehicles were shipped in the quarter ended June, well above expectations of 438,000 vehicles. However, it's fair to say that the consensus forecast was low for the electric vehicle maker. In reality, and by a more important metric, deliveries have fallen.
• On an annualized basis, the number of vehicles delivered fell 4.7% compared with the same quarter a year earlier. This was Tesla's second straight quarterly decline in vehicle sales and an indication that revenue from vehicles sold is still shrinking. Fierce competition from the East is eating up demand. China's BYD made 426,000 deliveries in the second quarter. The Chinese electric vehicle maker briefly overtook the American giant in the final quarter of 2023.
• However, Tesla is doing better and may even be out of the slump. Investors appear to be more optimistic about holding its shares. The stock has managed to erase most of its 40% decline for the year and is now just 5% below the line since early January. From its low in April to current market prices, the stock has seen a recovery of over 65%.