Over the past six months, Tesla shares have risen by nearly 25 percent. Over the past three months, their stock is up by 55 percent.
Business Insider reported that the automaker company Tesla had an unexpected profit in the third quarter of 2016. But right now, 2017 is setting up to be a very demanding year for the automaker. Tesla will have to spend heavily to launch its first mass-market vehicle, the Model 3, and integrate its $2.1 billion acquisition of SolarCity.
Tesla missed their mark of 100,000 cars produced, despite having a record number of vehicles delivered in 2016. This can pose a financial threat, as Tesla has a history of surges and collapses for its stock price. It seems that Elon Musk has to execute another capital raise in 2017 as the company prepares to launch the Model 3, which is going to be a costly undertaking.
Tesla has experienced several big share-price spikes, but the stock always reverts itself, usually caused by some negative news event or weak financial result. Tesla builds expensive stuff, and it has made its business more complicated by absorbing SolarCity, adding billions in debt to its balance sheet.
According to CNBC, Tesla shares have risen in line with anticipation of a successful Tesla Model 3 launch. Analysts are also reporting that the company does not have enough capital to complete its Tesla Model 3 production ramp on time, or fund the growth of its other projects, such as turning its SolarCity division into a profitable line of products.
Baird analyst Ben Kallo is urging the investors to buy the stock ahead of its fourth-quarter earnings release which is planned for February 22nd. He was the ones who visited the Gigafactory, where Tesla invited investors and analysts for a tour, and he thinks that Tesla can deliver about 25,000 model 3 sedans before the end of the year.