True Believing Tesla Retail Investors

Hardika Singh, Wall Street Journal:

Bartash isn’t alone. Scores of individual investors have piled into Tesla shares in recent years, lured by the company’s technology, visionary chief executive and mammoth stock market gains. Through the end of last year, the stock was one of the top 10 wealth-creating companies for investors over the past decade, according to Morningstar, rising from about $10, on a split-adjusted basis, to $250.

But the shares have since hit a rough patch, down almost 40% in 2024. Tesla is the second-worst performer in the S&P 500 and off more than 60% from its peak in November 2021. The company’s market value fell below $500 billion last week for the first time in nearly a year, after climbing as high as $1.235 trillion.

It is hard to blame these people for sticking with Tesla despite its actual performance. Tesla’s stock is in the tank for the year, and Singh’s story was published Monday, one day before a bleak earnings report. Income was less than half was it was a year prior, revenue and margin fell, and it sold many fewer vehicles than it made.

Even so, Tesla’s stock jumped 12% because its CEO said “A.I.”, and he recently promised a robotaxi service once again and a less expensive model. Investors apparently believe him.