Tesla Inc. (NASDAQ: TSLA) can’t stay out of the headlines, landing in the spotlight once again earlier this week.
On Tuesday, the electric vehicle maker unveiled its plan to raise $5 billion by selling additional shares. This isn’t out of the ordinary behavior for any stock, but what’s raising eyebrows is that this is the second time in three months the company has made this move.
In fact, this announcement marks Tesla’s third multibillion-dollar stock sale of the year.
In a filing with the U.S. Securities and Exchange Commission (SEC), the company plans to sell additional shares “from time to time” and “at the market” prices.
There’s no doubt that it’s a smart way for the automaker to take advantage of its meteoric rally through 2020. It also has quite the lineup waiting for when these shares become available.
But an important thing for you to keep in mind is that just because a stock is breaking records, it doesn’t mean it’s an automatic buy. Today I’ll explain â€“ and share with you my best piece of advice when it comes to investing in Tesla stockâ€¦
The Smart Way to Play Tesla’s Big Year
Tesla lines up a deal with ten banks, including Bank of America Corp. (NYSE: BAC), Goldman Sachs Group Inc. (NYSE: GS), and Morgan Stanley (NYSE: MS), that will serve as sales agents or buy shares themselves when any portion of the $5 billion in stock becomes available.
But this impressive lineup isn’t the only reason Tesla is feeling so confident.
The company is also moving forward with its global expansion plan and building factories in Germany and Texas, allowing it to speed up its building process and focusing on battery cell manufacturing.
With that said, it’s clear that Tesla’s stock has had a monumental year. From being added to the S&P 500 to its record-breaking 667% rise, it’s no surprise that it’s been one of the most famous companies in the news.
Of course, what’s important now is what this means for you and making money.
I’ll start with the question we’re all asking: Does anything matter when it comes to the companies in the electric vehicle sector â€“ and by anything, I mean any factors that could impact the company’s stock one way or the other.
It doesn’t seem like it.
The good news? Buyers rush in. The bad news? Buyers rush in.
I’ve been studying the electric vehicle industry for quite some time now, and I’ve realized that regardless of what is happening, investors will always rush in to buy EV stocks on a pullback.
And the same is true for Tesla. It doesn’t seem to matter that the company is looking to raise money. The stock price just continues to climb.
But I’m not buying it literally or figuratively. I wouldn’t be looking to buy TSLA stock on a massive pullback even with the stock’s current valuation.
And while that may come as a surprise, if I’ve learned one thing from my 20 years of trading, it’s that sometimes the best trade is no trade. And I think that sentiment is ringing true for Tesla right now.
But not to worry â€“ just because it’s not ideal to trade TSLA right now, it doesn’t mean there aren’t plenty of other stocks you should have in your portfolioâ€¦
Indeed, my colleague Shah Gilani is going to show you how to come out on top. He’s breaking down his entire 2021 investing strategy, including which obscure stocks are at the top of his “must buy” list.
Plus, he’s detailing the big stocks you need to sell ASAP. He’s revealing it all â€“ names, tickers, and prices. Be ready to take notes â€“ Shah moves fast. Click here nowâ€¦
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About the Author
Andrew Keene, editor of the 1450 Club, Super Options,Â andÂ Project 303 at Money Map Press,Â is a globally known trader and a renowned expert on all things options.
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