Explan to us why a share of common stock is worth more than $420 at this time. Certain many of this would like to believe it is so, but the market has never countenanced a price that high.
I am inclined to believe that a private share would be worth more than $500, but not a common share. These are two distinct vehicles for holding equity. So the point of the transaction is to transform common shares into higher value private shares.
So what actually makes a common share worth more than $420?
Tesla's execution
right now justifies a price of $365/share under my current models, which assume highly probable achievement of selling 100k Model S/X per year, and 400k Model 3 per year, as well as some Energy products in the mix.
My next Price Target is $670/share, but this is a speculative guess, based on gaining probability of selling 100k Model S/X per year, and 900k Model 3/Y per year, as well as some Energy products in the mix.
In my estimation, a common share could be worth $420 or more to an investor who (1) Sees and believes in Tesla's vision towards Model Y and beyond and (2) Does not have anywhere safer with equivalent or better return to invest their capital.
Right now, TSLA isn't jumping to $420 and beyond IMO because the vast majority of market participants who are evaluating Tesla as a company (I am deliberately excluding momentum traders and others who rely mostly on technicals) don't have sufficient certainty or visibility into Tesla's path beyond Model 3.
So far, all we have is a general agreement that Tesla will build a factory in Shanghai and begin production (hopefully) in the next 2 years or so.
As we get more specifics, and more things start to happen to move Tesla towards the next tier of production, I expect the stock price will gradually move upwards to reflect increased certainty.
Anyone remember when TSLA was trading in the 30's range? There was tremendous uncertainty at the time that Tesla would get Model S out the door and even make it to 20k/year. The low price reflected the big risk.