Tesla Inc. in the American Auto Industry Essay

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The company is listed on USA NASDAQ, with an IPO in June 29, 2010 and its headquarters is located in Austin, Texas, United States. The company was founded on 1st July 2003 by Elon Musk, Martin Eberhard, JB Straubel, Marc Tarpenning and Ian Wright (Dzialo, 2018). Tesla is better described as a battery manufacturer, even if its name is most commonly associated with electric vehicles. The firm was operates within the automotive sector where it is well-known for its expertise in solar panels and Lithium-ion battery energy storage.

According to the past three years worth of stock activity at Tesla Inc., the average share price for the company was about $205.39 as per the data provided by Yahoo Finance. Based on the data on the site, the stock price for 2020 was 29.53 USD, 2021 was 235.22 USD and as of 31st December 2021 it was 352.26 USD (Microsoft Corp., 2022). The previous three years have seen a tremendous increasing trend in the price of Tesla Inc. shares with the December 2021 share prices being the highest.

The highest stock price as on October 3 04:00PM EDT was $414.50 while the lowest was $206.86. Tesla’s 52-week high was at $414.50 on 5th November 2021 and today this trend has reduced to $242.40 (Microsoft Corp., 2022). Over a span of three years, the prices of Tesla shares have increased in overall by about 4.8 percent and this is expected to rise over time at a similar rate. Similarly, the previous three years have witnessed the company’s revenue increase tremendously due to improved client base and sales.

When a company decides to split its stock into several shares, it is typically to reduce the price for investors. With the company stock split having been rumoured for many months, the company ended up approving the 3-for-1 stock split during its annual general meeting held on August, 4, 2022. A research on the outstanding share of stock for Tesla has revealed that as per the quarter that was ending on June 30, 2022, there was about 3.465 Billion outstanding share of stock (Microsoft Corp., 2022). This represents nearly 3.22% increase as compared to the previous financial year (Microsoft Corp., 2022). As of June, 30, 2021, Tesla’ shares outstanding were 3.387 Billion representing an increase of 4.25% from the 2020 financial year.

Considering the variety of companies that are listed and are available for investment on the NASDAQ, I believe it would be prudent to invest into a company with a NASDAQ basis such as Tesla Inc. In addition, NASDAQ is such a well-known and trustworthy exchange, investors may rest certain that they are receiving a fair return on their investment. To reiterate, NASDAQ companies are a safe investment sites due to the exchange’s history, stability and reputation.

The New York Stock Exchange and the NASDAQ both operate within the same industry. An example of a company listed on the New York Stock Exchange include Forward Industries, Inc. (FORD). On comparison between the two companies, it is evident that the stocks are traded more often and are more costly on the NASDAQ stock exchange as they are on the New York Stock Exchange (Dzialo, 2018). This finding clearly depicts that an investor who purchases a single share on the NASDAQ stock exchange platform does so at an expensive cost than on the New York Stock Exchange. This cost is probably high due to greater demands of stocks on the NASDAQ stock exchange.

References

Dzialo, B. (2018). Charging down the Road: A Historical Analysis of the American Auto Industry and Tesla Inc. Sage

Microsoft Corp. (MSFT). (2022). Yahoo! Finance. Web.

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