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Tesla stock jump is being attributed to the fact that one of its biggest rivals, Nikola is facing fraud charges with the SEC.
Closing yesterday’s market trading at $449.79 Tesla Inc (NASDAQ: TSLA) stock added 7.18% in respect to the day’s opening value. Tesla (TSLA) stock was trading around $439, 2.37% down during Wednesday’s premarket.
Amazingly Tesla stock has managed to continue with the rally in the past five days even after fears of possible sell-off. Fear had begun to grip Tesla stock investors after the company reported that it would sell $5 billion worth of shares to the market through banks, split its shares five times amid the coronavirus market slowdown.
Tesla stock is now up 22.79% in the past five days, managed to add 19.71% in the last 30 days, and up over 126% in the past three months through Tuesday. With a market cap of approximately $391.01 billion, the company is in a better position of delivering competitive electric vehicles globally.
Tesla stock yesterday’s jump is being attributed to the fact that one of its biggest rivals, Nikola Corp (NASDAQ: NKLA) is facing fraud charges with the SEC. Consequently, Nikola shares dropped 8.27% on Tuesday to close the day trading at $32.83. NKLA shares drop continued during Wednesday’s pre-market, whereby they were approximately 7.55% down to trade around $30.35.
Tesla Stock and Nikola’s Fraud Case
Hindenburg Research accused Nikola of lying to investors about the true state of its battery technology and vastly overstating its progress toward the development of its electric truck.
The case comes a few days before Tesla hosts its big day ‘Battery Day’, September 22. Nikola has, however, vehemently denied the allegations more than once publicly.
Tesla stock is likely to continue with the rise as investors gain more confidence days before the big EV announcements.
The case at hand is painting a bad picture with the Nikola mode of business operations and making Tesla a better option. If the case proceeds and is ruled against Nikola, Tesla stock will definitely skyrocket.
However, not all who have lost hope with Nikola and it still remains optimistic about its future prospects. Having invested in the company less than a month ago General Motors Company (NYSE: GM) have faith in the company’s ability to deliver.
“The company has worked with a lot of different partners and we’re a very capable team that has done the appropriate diligence,” General Motors chief executive Mary Barra said on Monday.
Tesla is now seeking ways to solve identified loopholes that are limiting its products scalability.
“The real limitation on Tesla growth is cell production at an affordable price. That’s the real limit. So that’s why we’re going to talk a lot more about this on Battery Day because this is a fundamental scaling constraint,” Musk said in the July 22 call.