Today, Tesla (NASDAQ:TSLA) stock is being pushed down by uncertainty regarding its future. Elon Musk had cause to celebrate yesterday after reaching an agreement to acquire Twitter (NYSE:TWTR). After a lengthy saga of negotiations and vague tweets hinting at tender offer plans, the Tesla CEO has purchased the company for $44 billion. Musk promised that the acquisition would be good for Twitter shareholders, but what about his other companies? TSLA stock has been falling all day as investors wonder what the company’s future will be.
Let’s take a look at what they can expect.
What’s Happening With TSLA Stock
For all the momentum that the deal has generated, both TWTR and TSLA stock are in the red today. The former is down 3.6%, but the latter has fallen by more than twice that. As of this writing, it is down almost 10% for the day and isn’t showing signs of a rebound. Both stocks spent the morning falling steady although both seem to have steadied in the afternoon.
Tesla has seen plenty of good news lately, reporting positive earnings and high sales figures. However, Musk’s Twitter takeover has raised some questions among large-scale investors, primarily regarding his plans for structuring his assets. His recent formation of several holding companies has led some investors to question if he is forming an overarching corporation.
Is this bad news for TSLA stock investors? Not necessarily.
Why It Matters
For all its positive catalysts, TSLA stock has also garnered some bearish energy. Cathie Wood recently sold some of her Tesla holdings. Fellow famed investor Michael Burry has predicted that the company will ultimately be overwhelmed by increasing competition. A recently revealed short position from Bill Gates has also cast a negative light on TSLA stock. However, InvestorPlace’s Louis Navellier sees the company’s recent dip as a positive opportunity. As he states:
“On April 4, TWTR stock soared on news that Elon Musk revealed he had purchased a 9.2% stake in the company. That was just the beginning of a spectacle that has grown to see Musk announcing he has lined up $46.5 billion in funding to buy the social media company outright. During all of this, TSLA stock has been feeling the heat. If you have been considering adding Tesla stock to your portfolio, now is the time to do so, while it’s still discounted thanks to the Twitter drama.”
Navellier’s bullish, buy-the-dip case focuses on Tesla’s potential and its current decline due to concerns that have nothing to do with its production. This is a valuable perspective and worth considering, particularly as Tesla is still growing and scaling electric vehicle (EV) and battery production. Its new gigafactories in Berlin and Austin, Texas, have already begun turning vehicles to meet demand that isn’t slowing down. And its Shanghai factory has just reopened, positioning it to make up for lost time.
What It Means for TSLA Stock
The bottom line on Tesla stock is clear: it will rebound in the near future, particularly as the proposed stock split draws near. Shares have been forced down by temporary market forces, and they won’t stay down for long. Investors should heed Navellier’s advice and take the opportunity to buy TSLA stock on the dip before they do.
Despite questions about Musk, Tesla has all the markings of a business that can and will keep succeeding.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
