Catherine Wood, CEO of Ark Investment Management, has performed well in 2020, and several of his company’s ETFs have performed best. One of her best times of 2021 may happen this week, and the 2018 call is about to come true.
what happened: Wood bet bullish Tesla Company (NASDAQ: TSLA) in February 2018 called for the stock price to reach $4,000.
Taking into account the five-to-one split in August 2020, the stock price exceeded $800 on Thursday, reaching Wood’s original target stock price.
Wood said that the short case of Tesla stock reached $600, which is still twice the stock price at the time.
“If we are right, the inventory in our model will reach $4,000. If we do it wrong and everything they do is electric, then our endurance is $600.”
Related link: Skillz surged 21% after Cathie Wood added the former SPAC to the ETF
Why is it important: Tesla is the largest shareholder of the Wood ARK ETF and helped the fund rank among the best performers.
Wood’s price target was the highest at the time and was questioned for being too optimistic about Tesla, but because he continued to hold stocks, he stood behind her high theorem. At the time, Tesla’s highest target price was $500 per share, which meant that Wood’s target price was twice as high.
Even in 2020, analysts and investors are trying to determine whether Tesla is a car company or an energy, automobile or technology company.
“The future is transportation as a service and software as a service. This is where Tesla is going.” Wood said in 2018.
Given today’s debate and Tesla’s valuation, it is likely that Wood will win this conference call.
What’s next: Wood became even more bullish in February 2020, issuing a new bull market case for Tesla’s stock price, which will reach $7,000 by 2024.
Wood’s target price after the spin-off is $1,400, which is based on Tesla’s gross profit margin approaching 40%, which has improved capital efficiency through the development of production scale and autonomous driving capabilities and the penetration rate of autonomous taxi services.
Wood gave a price target of $1,400 with a 50% chance of hitting. The $300 bear market price is based on 3.2 million cars sold in 2024, with a 25% probability.
Wood’s bull market forecast for Tesla believes that Tesla’s stock price will reach $3,000.
TSLA price action: Tesla shares closed Friday up 7.8% to $880.02.
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