Elon Musk Wealth Grows $14.5 Billion in One Day

The wealth of the world's richest person, the head of Tesla Elon Musk rose by $14.5 billion, as shares of his electric car maker rose 9.4%, outpacing the Nasdaq tech index's 2.5% rebound from last week's decline.

Analysts attributed Tesla's outperformance to Musk's comments and broader market factors. Referring to an interview Musk gave to Bloomberg at the Qatar Economic Forum on Tuesday, in which the Tesla chief highlighted the company's backlog of orders.

"The positive demand comments from Musk resonated with the street and gave some confidence," Wedbush analyst Dan Ives said. In the interview, Elon Musk reiterated his concerns about the recession and the need to trim Tesla's workforce, but investors appeared to have focused on his comments downplaying the risk of competition, identifying supply constraints as the main obstacle to meeting the company's strong demand.

“As anyone who has tried to order a Tesla knows, the demand for our cars is very high and the waiting list is long,” Elon Musk told Bloomberg. “This is not intended and we are working to increase production capacity as quickly as possible.”

According to RiskReversal Advisors founder and president, Dan Nathan, “This comment may be encouraging to investors, as Musk has been known to send encouraging messages to employees as he has. last week".

"Over the past year, Tesla shares have in the last month of every quarter seen huge gains in the last two weeks of the month from their lows," Nathan added. But he also warned that Musk's comments about the recession and pending Chinese production issues "may set up investors to miss deliveries and earnings in the second quarter."

Gordon Johnson, CEO of GLJ Research, said the rise in Tesla's stock price was due to broader market factors, noting that with stocks emerging from their worst week since March 2020 last week.

"The S&P 500's 14-day RSI indicates that the stock market is currently oversold, and high beta stocks like Tesla were set to bounce back," Johnson explained. (Stocks with a higher beta generally move more than the broad market in any direction.)

Johnson expects the company's second-quarter deliveries and earnings to be disappointing. Thus, with Tesla trading at higher levels than its peer group, we see that any underlying disappointments are likely to send stocks lower.