Investing

Why Tesla Stock Jumped on Thursday | The Motley Fool

What happened

Shares of electric-car maker Tesla (NASDAQ:TSLA) rose sharply on Thursday. The stock ended the trading day up 5.3%, trading at nearly $656.

The growth stock‘s gain was likely caused by a combination of an overall bullish day in the stock market and S&P Global‘s (NYSE:SPGI) move to increase its credit rating on the automaker’s debt.

Image source: The Motley Fool.

So what

Ahead of S&P Global‘s move next week to include Tesla stock in the S&P 500 for the first time, S&P Global changed its rating of Tesla’s debt to BB, up from BB-. S&P Global noted that the company’s “mounting liquidity has substantially reduced its financial risk.” 

This news follows Tesla’s recent capital raise. Earlier this month, Tesla entered into an agreement to issue up to $5 billion worth of common stock. This would bolster Tesla’s cash position by an impressive 34%.

Also likely helping the stock on Thursday was the market’s big move higher. Highlighting optimism in the market, the S&P 500 rose 0.6% to a record high.

Now what

Tesla is set to be added to the S&P 500 before market open. While it’s possible that this could provide a near-term boost to the stock, investors shouldn’t count on it.

What’s more important is that Tesla meets its full-year guidance for 500,000 deliveries and that it continues to provide evidence that this is just the tip of the iceberg for its long-term growth story.


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button