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Tesla Stock Surges 9% on Reports of Resuming Shanghai Factory Production

Tesla (TSLA) stock has been on the radar of the investors after its massive price surge this year. So far, since the beginning of 2020, the Tesla stock has surged over 90% taking the company valuations close to $150 billion.

After an unprecedented surge to $965 levels last week, the stock has retraced back and under wild trading. On Monday, February 10, the stock price shot 9% northwards after reports coming from China. The gains arrived amidst the report from Reuters that Tesla would soon resume work on its Shanghai gigafactory.

The price after the closing bell was $771.28, at the moment in the premarket TSLA stock is $766.34.

The latest coronavirus outbreak has forced several businesses to shut their shops. Even giants like Apple and Tesla have to face the brunt of this widespread epidemic across the country. But late last Friday, the Shanghai municipal government said that they would extend help to Tesla to resume their operations. Shanghai municipal government spokesman Xu Wei said:

“In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible”.

Tesla Vice President Tao Lin assured that the production would start from Monday, February 10. However, the company will have to delay the delivery of cars for the time being. Tesla established its factory in Shanghai last year after support from the local government there. China is one of the largest automobile consumers and thus a potential market for Tesla.

The Tesla stock which has recently been in the news saw some wild trading last week. Over the last week, $170 billion worth of Tesla stock was traded with Musk’s net worth rising to nearly $39 billion. However, with such massive price swings, analysts think that the stock has entered a speculative zone.

Canaccord Genuity analyst Jed Dorsheimer has lowered his rating to hold from buy for a target price of $750 per share. Speaking to The Street, he said:

“Just as we observed a clear buy signal coming into 2020, we see the risk of China’s coronavirus as a clear headwind to the Shanghai facility, suggesting a more pragmatic position. Given the 3,000 per week China Model 3 production expectations in a country that remains on lockdown, we feel a reset of expectations in Q1 is likely and thus needs to be reflected in the valuation.”

The Monday price rally was also the outcome of the latest discussion in the market of Google‘s possibility of buying out Tesla.

Tesla Stock Surges 9% on Reports of Resuming Shanghai Factory Production

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