We spoke with a Robinhood trader who says he made a 2,500% return from Tesla's stock rally. Here's how he did it. | Markets Insider
A Robinhood trader said he turned $5,000 into more than $130,000 thanks to Tesla's wild stock rally. A Reddit user with the name Kronos_415 said he netted the twenty-six-fold return in under a month by trading call options. He argued that an $800 stock price was fair given Tesla's innovations and aggressive expansion. "Anything beyond $900 for Tesla is purely speculative, as their financials can't legitimately back a valuation that high yet," he said. Visit Business Insider's homepage for more stories.
A Robinhood user said he turned $5,000 into more than $130,000 thanks to Tesla's remarkable stock rally this year. The trader, who has the username Kronos415 on Reddit, said he netted the twenty-six-fold return in under a month. He told Business Insider that he's a 28-year-old business analyst in Washington, DC, who began investing six months ago. He declined to share his name. The amateur investor and member of the WallStreetBets subreddit first bought Tesla options on Robinhood's stock-trading app on January 3. He made the decision after reading a slew of good news about the company, including the opening of its new Gigafactory in Shanghai and the first deliveries of its Model 3 cars in China. The electric-car maker's stock surged more than 50% last month, to about $650 from $430. As a result, Kronos415 was able to turn his "meager" $5,000 into $51,000, he said. Next, he spent nearly $27,500 of his earnings on seven Tesla calls on February 3. Each of the options granted him the right to buy the stock at $700 until February 21. After the stock surged, he sold each call — worth $3,925 when he bought them — for $17,025, more than quadrupling his money. Read more: An investor crushing 98% of his peers told us why Tesla's meteoric rise echoes the dot-com bubble era — and warns it's super-dangerous to buy now Kronos_415 said his Tesla windfall totaled almost $131,000. A screenshot that he shared in the WallStreetBets subreddit backed up his story.
Tesla surged nearly 30% over Monday and Tuesday, prompting numerous skeptics to warn that its gains weren't sustainable. Indeed, the stock closed 17% lower on Wednesday, at $735. However, Kronos_415 argued that the run-up was warranted. "I feel that the rally this week is well deserved," he told Business Insider. "The strides Tesla is making in terms of battery technology combined with their aggressive rollout of vehicles and factories in emerging markets shows that they are hungry. "I think a fair market price is $800," he continued. "When I saw it reach $900 to $950, I expected the pullback. Anything beyond $900 for Tesla is purely speculative, as their financials can't legitimately back a valuation that high yet." Kronos added that he wouldn't be surprised if Tesla stock more than doubled to $2,000 in the next few years. In the meantime, he said he planned to grow his profits in an "aggressively managed" brokerage account, potentially leaving $5,000 to continue trading options on Robinhood.Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
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Tesla opened more than 9% lower Wednesday at the start of trading in New York, erasing...Tesla opened more than 9% lower Wednesday at the start of trading in New York, erasing all gains it had made in 2020. The losses come amid a broader market sell-off induced by panic over the coronavirus pandemic. The outbreak forced Tesla to close its Shanghai Gigafactory for two weeks. On Tuesday, Alameda County said Tesla would need to close its factory in Fremont, California, as it is not "essential business." Watch Tesla trade live on Markets Insider. Read more on Business Insider. Tesla has erased all of its gains so far in 2020 amid the coronavirus-led market sell-off. Tesla opened 9% lower than Tuesday's close at the start of trading Wednesday in New York, priced at $390 per share. That means that year-to-date, Tesla has shed nearly 7% from the end of 2019. Tesla's losses come as global markets reel amid the coronavirus pandemic, which has sparked investor worry that economic growth will take a hit as consumers are stuck at home, travel is canceled, and supply chains are disrupted. The market rout snapped a record-breaking rally for Tesla stock, which hit an all-time high close of $917 per share on February 19, then a 119% yearly gain in 2020. Read more: 4 energy experts break down what's ahead for an oil market in free-fall — including stocks to buy and strategies to deploy Tesla has had its own roadblocks during the outbreak, which originated in Wuhan, China, in December. The automaker was forced to shut its new Shanghai Gigafactory for two weeks due to a government mandate as China raced to contain the virus. The electric-car maker's supply chain has also been disrupted by the outbreak — Tesla had to install old hardware for Autopilot, its advanced driver-assistance system, in China-made Model 3 sedans. In addition, demand in China, a key region for the automaker, has taken a hit amid the spread of the virus. Registrations of new Tesla cars fell 46% in January from the previous month, Bloomberg reported, citing China Automotive Information Net. Tesla is also facing factory closures in the US. In an official tweet sent Tuesday, the Alameda County Sheriff's Office said Tesla is "not an essential business" per the Alameda County Health Order, and that the company will have to close its factory in Fremont, California. That sent shares falling in after-hours trading Tuesday. On Monday, CEO Elon Musk told employees that they don't have to come to work if they're sick or concerned about the novel coronavirus, according to a leaked email viewed by Business Insider. Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
JPMorgan potentially made $1 billion after boosting its Tesla stake by 600% last quarter | Markets Insider
JPMorgan Chase potentially made over $1 billion from Tesla in under two months. The bank's investment...JPMorgan Chase potentially made over $1 billion from Tesla in under two months. The bank's investment arm boosted its stake by 600% last quarter to around 2.5 million shares. Those shares have surged in value from $1.1 billion to $2.1 billion following Tesla's stock rally. JPMorgan may have netted more than $2 billion if it bought and sold at the right time. Visit Business Insider's homepage for more stories. JPMorgan Chase may have made over $1 billion from Tesla in less than two months. It boosted its stake in Elon Musk's electric-car startup by about 600% last quarter, before its stock price roughly doubled this year. The banking titan's investment arm added 2.2 million Tesla shares in the final three months of 2019, ending the year with more than 2.5 million shares or a 1.4% stake, according to SEC filings and Bloomberg data. Those shares were worth about $1.1 billion then, based on Tesla's stock price of $418 on December 31. They're now worth about $2.1 billion, as Tesla shares currently trade at $845. JPMorgan may have raked in more than $1 billion. If it snapped up the Tesla shares when they traded at $250 in early October, then sold them at their $970 peak earlier this month, its investment would have surged in value from under $650 million to nearly $2.5 billion — a return of close to $2 billion. Other investors have probably cashed in on Tesla's rocketing stock too. Renaissance Technologies increased its holding by more than 400% last quarter, making it Tesla's seventh-biggest shareholder with a 2.1% stake. The hedge fund potentially netted more than $1.5 billion from the move. Tesla's astounding stock rise has lifted its market capitalization to north of $150 billion, surpassing the combined market caps of automotive titans GM, Ford and Chrysler. However, critics ranging from investors and industry veterans to politicians argue the rally isn't based on anything substantive, and warn it will run out of steam.Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
Virgin Galactic has gained nearly 150% this year through Friday's close in a speedy rally that's...Virgin Galactic has gained nearly 150% this year through Friday's close in a speedy rally that's outpaced automaker Tesla's torrid 91% rise in the same timeframe. Shares of the space tourism company surged as much as 35% to a new high in early trading on Tuesday. Adam Jonas of Morgan Stanley thinks the stock price could "use a breather." While he's constructive on Virgin Galactic, "the move in the stock price of late appears to be driven by forces beyond fundamental factors," he wrote in a Tuesday note. Watch Virgin Galactic trade live on Markets Insider. Read more on Business Insider. Virgin Galactic is rocketing higher in a rapid surge that's even outpaced Tesla's record-breaking rally. So far in 2020, Virgin Galactic has gained a searing 148% through Friday's close. In the same timeframe, Tesla has gained 91% in a torrid rally that's led analysts and traders to question the stock's underlying fundamentals. The space company founded by Sir Richard Branson continued to beat the automaker's gains this week. Virgin Galactic spiked as much as 35% in early trading Tuesday to a fresh all-time high of $38.72 per share, while Tesla gained as much as 8%. Virgin Galactic's momentum is continuing from Friday when the stock closed 21% higher after the company announced that it had moved its spacecraft VSS Unity from Mojave, California, to New Mexico, where it will one day shuttle passengers to and from space. The recent rally has led at least one Wall Street analyst to question the stock's climb, saying that the share price could "use a breather." "We are constructive on the story and rate the stock overweight," Adam Jonas of Morgan Stanley wrote in a Tuesday note. "However, we must acknowledge that the move in the stock price of late appears to be driven by forces beyond fundamental factors." When Morgan Stanley first initiated coverage of Virgin Galactic in December, its $60 bull-case target represented over 700% upside, he wrote. Today, however, the shares have about 100% upside after just two months. Jonas also wrote that while Friday's move of the VSS Unity had "some important learnings," he didn't see it as one of the more ambitious tests for the company. "We believe the investment community still has much more room to better understand the potential of the emerging space economy," he wrote. In the future, Morgan Stanley thinks the company could even move beyond the $60 bull case as it "executes on key milestones and moves from proof-of-concept to industrial and commercial success." Virgin Galactic has a consensus price target of $18.50 and three "buy" ratings according to Bloomberg data. The company is due to report is fiscal fourth quarter 2019 earnings on February 25 after market close. Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption