Is Tesla (TSLA) Stock a Buy Now That the SpaceX IPO Hype Is Settling?

TLDR

• Tesla stock rose 1.7% to $381.59 Thursday as SpaceX’s IPO order book closed
• TSLA had fallen nearly 10% over the past week, partly linked to SpaceX capital raise concerns
• SpaceX’s $75 billion IPO allocated an estimated 30% to retail investors
• The Nasdaq dropped ~6% over the past week, contributing to Tesla’s broader weakness
• Consensus analyst rating is Hold with a $404.37 price target

Tesla stock climbed 1.7% to $381.59 early Thursday as the order book for SpaceX’s IPO closed, offering some relief after a rough week for the electric vehicle maker.

Tesla, Inc., TSLA

TSLA had dropped nearly 10% over the previous seven trading days, with some investors wondering if Tesla holders were liquidating to fund SpaceX purchases ahead of its expected Friday debut.

SpaceX is raising around $75 billion in its IPO — one of the largest on record. Roughly 30% of that was allocated to retail investors, a much higher slice than a typical IPO.

That retail-heavy allocation stirred concern. A lot of Tesla’s investor base is made up of smaller retail holders loyal to Elon Musk, and the thinking was some might sell TSLA to buy into SpaceX.

Tesla moved more than 3% — up or down — in each of the past four trading sessions. That kind of swing reflects just how jittery the market has been around the IPO.

SpaceX Math in Perspective

It’s worth putting the numbers in context. The $75 billion SpaceX raise equals roughly 6% of Tesla’s market cap. The retail portion is closer to 2%. And not all of that money was coming from Tesla — cash flows in from many places.

The Nasdaq Composite also dropped about 6% over the past week, which alone could explain much of Tesla’s slide. With a beta of 1.80, Tesla tends to move harder than the broader market in both directions.

Tesla opened Thursday at $381.59. Its 52-week range sits between $288.77 and $498.83, and its 50-day moving average is $397.29.

Institutional Interest Stays Steady

On the institutional side, Dorsey & Whitney Trust CO LLC raised its Tesla position by 8.8% in Q4, adding 1,809 shares for a total of 22,432 worth about $10.1 million. Overall, 66.2% of Tesla’s float is held by hedge funds and institutional investors.

Analyst sentiment is mixed but leans constructive. Of 43 analysts covering the stock, 22 have a Buy rating, 16 Hold, and 5 Sell. The consensus price target stands at $404.37.

In its most recent quarter, Tesla posted EPS of $0.41, beating estimates of $0.39. Revenue came in at $22.39 billion, slightly below the $22.96 billion consensus, but up 15.8% year over year.

Tesla’s China retail deliveries rose 22.5% year over year in May, which helped ease some demand worries. Belgium also approved Full Self-Driving software use, adding to a string of FSD-related positives in recent weeks.

CFO Vaibhav Taneja sold 3,000 shares on May 13th at $450.00 as part of tax withholding obligations on vested equity awards. Director Kathleen Wilson-Thompson also sold 26,409 shares on April 30th under a pre-arranged 10b5-1 plan at $378.11.

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