Why Buy and Sell Tesla (TSLA) Inc. Stock?

Buying and selling are the two crucial things that happen in every market. Thus, before you can buy anything, there ought to be someone or a company willing to sell that thing. However, if you are a buyer, before making a purchase, you need to consider many things. For instance, before purchasing Tesla stock, one of the things you need to study is the Tesla stock forecast which will tell you the stock movement in the market. 

Since establishing the company, Tesla Inc has witnessed an increase in its stock value, so many investors are buying a piece of the company. Buyers buy with the aim that the stock price will increase over a long time. Sellers sell due to the reduction in the stock price. In this guide, we will discuss the reason behind the buying of Tesla stocks.

Why Buy Tesla Stock?

Below are three reasons why investors invest in Tesla stock:

  • Mass adoption of electric cars
  • Less risk of bankruptcy 
  • Multiple revenue sources

Mass Adoption of Electric Cars

There is a rapid increase in the number of electric cars being purchased. This is shown when the sale of electric vehicles was 2.6 million between the beginning and middle of 2021. Compared to a year before, the increase is at 160 percent, implying that the sale in 2021 is over 6x of the year before. Tesla is among the leading manufacturers of electric cars with the mass adoption of the vehicles in China and Europe. 

Many car manufacturers are on the verge of creating their electric vehicles. General Motors, one of the leading car manufacturers, reported that by 2035 it would halt the selling of vehicles using gas. Also, by 2030 Ford wants half of its cars to be electric. Due to the wide adoption of electric vehicles, long-term investors buy Tesla stock and hold on to it for a long time.

Less Risk of Bankruptcy

Any company that has not been faced with the option of bankruptcy has high investment risk. According to Jim Chanos and Elon Musk, Tesla was faced with the possibility of failure in 2017. The belief that the company cannot become bankrupt solidifies the buying order of some traders even though the CEO is controversial. However, the company scaled through, and since then, it has been growing massively in its stock price. 

The profit of the company increased by 256 percent and is still growing. A nearly bankrupt company is now a company that is making enough profit to sustain itself without external funding. The company’s successful phase indicates a risk reduction based on TSLA stock forecast, making it worth buying for some.

Multiple Revenue Source

The market cap of Tesla is now in billions of dollars, even higher than most vehicle companies. Thus, it is expected that there will be a disruption in the market. The rate at which Tesla is growing is fast such that the company’s valuation is higher than most companies producing cars before its establishment. The company’s option to generate money through various means is among the reasons investors buy the stock. Since it is ascertained that once the profit increases, the stock price will also increase. 

Apart from selling cars, Tesla can generate money by commercializing its factory under construction through power supply and production of batteries. Also, other companies manufacturing automatic vehicles can obtain the algorithm for self-driving from Tesla at a fixed cost. Also, ensuring the car is another means of generating money using its treasure trove of data.

Why Sell Tesla Stock?

Investors sell Tesla stock for different reasons, part of which can be personal or economical. If the Tesla stock forecast shows that there will be a fall in the stock price, some investors will sell the stock, whereas the long-term traders will wait for the market to bounce back. Also, with the increase in competition in the electric car niche, some investors may want to get out of the market quickly before it affects the stock price.

Conclusion

The success Tesla Inc. sees in the electric car industry cannot be disputed, which makes some investors consider the stock a good investment choice. However, the company’s success should not strike out the possibility of its stock price plummeting. The uncertainty is what makes some traders sell the stock. Regardless of whether the stock price is increasing or decreasing, ensure to research the market before buying or selling. You can also check the stock’s financial information and use the Tesla stock forecast.