Tesla CEO Elon Musk achieved a measure of vindication on Monday as the automaker’s shares topped $420 for the first time — more than a year after he was fined for tweeting about taking it private at that price.
The stock’s new all-time high represents what The Wall Street Journal called a “U-turn in investor confidence” in Tesla, whose shares fell as low as $178.97 in June. “A surprising third-quarter profit, the unveiling of a new pickup truck, and progress toward building Model 3 compact cars in China have fueled the stock’s rise,” the WSJ said.
In Monday’s session, the shares rose as high as $422.01 before finishing the day up 3.4% at $419.22. The stock has gained about 74% over the past three months.
The $420 mark is particularly significant for Tesla because in August 2018 Musk tweeted that he had “funding secured” to take the company private at that share price, sending the stock soaring but landing him in hot regulatory waters after investors realized he had not lined up the financing for a buyout.
In a settlement with the U.S. Securities and Exchange Commission, Musk paid $20 million, stepped down as Tesla chairman, and agreed to have his material statements overseen by the company’s board.
For Mr. Musk, reaching $420 a share “is about the most significant milestone for his investor credibility in the last several years,” said Gene Munster, managing partner at investment and research firm Loup Ventures. “It shows that his intuition, whether you view it as comical or not, his intuition is right.”
Tesla shares rebounded in October after the company reported better-than-expected earnings and a surprise profit for the third quarter and also told shareholders that it was ahead of schedule with its new Shanghai Gigafactory, its first plant outside the United States.
“The road to $420 wound through new performance records as well as extreme low points that have brought litigation, government inquiries, layoffs, and operational challenges,” CNBC said.
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