Even though Tesla’s stock was practically worthless five years ago, its most devoted supporters continued to cling onto their shares in the business in the hopes that Elon Musk’s vision would materialize. Those who persevered were richly rewarded. Tesla’s stock rose 743 percent in 2020 and an additional 50 percent in 2021.
Finally, Tesla had fulfilled its long-standing pledge to produce powerful, aesthetically pleasing electric automobiles that could successfully compete with conventional gas cars. Was that remarkable rise, nevertheless, sustainable? What is the current value of Tesla shares?
What Is the Fair Value of Tesla Shares?
Because Tesla shares accounted for a disproportionate amount of his personal portfolio, Elon Musk was the richest person in the world at the time of the stock’s high. However, he was so preoccupied with expanding Tesla and developing other ventures like SpaceX that he hardly paid attention to his enormous wealth.
As Musk continued working, prominent figures in the financial sector, such as Cathie Wood of ARK Invest, were praised for their long-standing belief in Tesla. Some market observers questioned whether it was time to abandon the traditional value-based investing strategy in favor of disruptive, inventive, and entrepreneurial individuals along the lines of Tesla.
With a net worth of $104 billion, Warren Buffett follows the classic value-based investing strategy to the letter and has never invested in Tesla stock. The media implied that he was out of touch for not supporting Elon Musk’s determined efforts to develop the greatest electric car.
Can You Afford Tesla?
Because of how closely linked to its CEO Tesla is, the company’s future is less predictable than that of most others. Elon Musk has shown himself to be erratic; frequently, he takes quick, unforeseen actions that drastically alter the course of one or more of his commercial endeavors. For instance, he abruptly announced in 2022 that he was buying Twitter, attempted to back out of the agreement, and ultimately carried through with it. The drama unfolded, and Tesla’s stock dropped.
That being said, Musk is a visionary who, in a comparatively short amount of time, has revolutionized EV technology. In addition to possessing amazing ideas, he also possesses the abilities, means, and motivation to transform them from ideas into completed goods and services. Although he may not be prepared to wager on Tesla or Elon Musk, Warren Buffett calls Musk’s achievements “remarkable.” Buffett stated in an interview from 2018:
He’s experimenting to make a product better. I applaud him for that, and whether it’s a success or not will be determined by the American people. It’s also not simple.
Musk has accomplished a great deal, possibly even extraordinary. A small amount of Tesla stock is probably a wise investment, even though it could be risky to take on too much.
Buffett was correct, though, as the price of Tesla stock fell by more than 65 percent in 2022. While external economic factors played a role in that downturn, Elon Musk bears a significant portion of the blame.
Tesla and Musk
While most firms and their executives are not synonymous, Tesla and Musk are seen as one and the same by the general public. Retail investors are balancing the risk of Musk’s volatile behavior against the possible rewards if Tesla’s stock recovers and rises above its former highs now that it is affordable to purchase the company’s shares.
Nobody can agree on the value of Tesla stock, thus it’s a conundrum with no simple solutions. The company’s intrinsic worth has been estimated by the most knowledgeable analysts in the field to be between $50 and over $200 per share, a difference that is too great to ignore.
Purchasing Tesla stock with restricted exposure, such as a single share, is one option available to ordinary investors. So is purchasing a single Tesla share worthwhile?
Is Purchasing One Share of Tesla Worth It?
Purchasing a small quantity of shares in any business offers benefits and drawbacks. The upside is that there is less risk. An investor’s loss in a declining stock price is minimal. On the other hand, it is also true that investors only receive a little return if the stock increases.
Because Tesla isn’t like most businesses, purchasing one share of Tesla stock at the current price may offer a higher potential profit than risk. It is possible for the corporation to lose value, in which case the loss on that one share would be minimal. However, Tesla’s return potential might be greater than that of the majority of companies.
Tesla did, after all, increase by 743 percent in a single year. Not many growing companies, even the most prosperous ones, produce returns this remarkable. There’s a chance that Elon Musk may unveil additional disruptive technology, in which case triple-digit returns for Tesla shares are possible. This implies significant gains for investors, even if they own a single share.
How Do I Purchase A Single Tesla Share?
Purchasing a single share of Tesla or any other stock was nearly impossible prior to the advent of self-service online brokerage accounts. A “round lot,” or at least one hundred shares, was the minimum trade requirement, and the human brokers who handled the trades received a large commission.
For average investors, that isn’t feasible because of the price of a hundred Tesla shares. By March 2023’s end, over $19,000. For the wealthy who need a place to deposit their money, that’s OK, but for people with smaller portfolios, it doesn’t work.
The good news is that self-service brokerage platforms understand that not everyone has a large amount of money to invest, therefore they cater to people who are new to the market. They don’t have minimum balance requirements, trade fees, or costs, and they let investors purchase one share of Tesla and the majority of other stocks.
With fractional share programs, several respectable online brokers expand on this idea by allowing account holders to invest as little as $1 in the stocks of their choosing. The following are a few of the top fractional share internet brokers:
Schwab Charles
Buy Sell
Trustworthy Investments
Robin Hood
Trade Tasty
Only a limited number of equities may be eligible for fractional shares, and some platforms offer a greater selection than others.
Can You Afford Tesla?
Because of how closely linked to its CEO Tesla is, the company’s future is less predictable than that of most others. Elon Musk has shown himself to be erratic; frequently, he takes quick, unforeseen actions that drastically alter the course of one or more of his commercial endeavors. For instance, he abruptly announced in 2022 that he was buying Twitter, attempted to back out of the agreement, and ultimately carried through with it. The drama unfolded, and Tesla’s stock dropped.
That being said, Musk is a visionary who, in a comparatively short amount of time, has revolutionized EV technology. In addition to possessing amazing ideas, he also possesses the abilities, means, and motivation to transform them from ideas into completed goods and services. Although he may not be prepared to wager on Tesla or Elon Musk, Warren Buffett calls Musk’s achievements “remarkable.” Buffett stated in an interview from 2018:
He’s experimenting to make a product better. I applaud him for that, and whether it’s a success or not will be determined by the American people. It’s also not simple.
Musk has accomplished a great deal, possibly even extraordinary. Although taking excessive risks with Tesla stock may be risky, it’s likely that investing in a little amount of the company’s shares is a wise move.”
