Tesla rocked by market panic but fundamentals remain strong as ever

Tesla stock (NASDAQ:TSLA) has taken a significant hit in recent weeks, falling back into sub-$500 levels as of writing. Yet despite the sharp drop, it should be mentioned that Tesla’s fundamentals remain unchanged. This means that outside the pressures on the market due to the automobile manufacturer, this epidemic ’s company is at least as powerful as before.

The global COVID-19 pandemic has not yet been kind to the economy, and this is true across the globe. Experienced automaker Volkswagen has announced that it is poised to suspend its own automobile manufacturing actions in Europe. The PSA Group also has shut down its European facilities. In the technology sector, companies such as Apple and Facebook have been hit hard. Even entertainment giant Disney has shut down its parks and resorts. TSLA, being characteristically volatile than stocks, has felt this drop significantly.

That being said, the US market appears to have obtained a breather on Tuesday’so trading, together using the Dow regaining 1,100 points over as of writing. Tesla stock, showcasing its trademark volatility, fell as low as $396 per share, before rebounding per share, about 1% greater on Monday.

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There’s absolutely not any doubt that the international COVID-19 pandemic is affecting industries far past the technology and auto sector. Bearing this, it is important to say that the recent dips in TSLA stock are likely caused by the market’s reaction to the continuing outbreak, not because of the company’s performance. Allowed, Tesla will have a very challenging Q1 considering that the corporation cannot actually do its normal shipping push, but that is.

In fact, Tesla is one of the automakers today that could weather a crisis that is worldwide. A good deal of this has to do with the company’so choice to raise an additional $2 million worth of capital in February. In the end of Q4 2019, Tesla needed a healthy $6.3 billion in cash, but following February’s capital investment round, this was raised to $8.3 billion. This level, the highest in the company’s background, will likely supply Tesla using ample runway to remain afloat since the global markets weather the pressures resulting from the COVID-19 pandemic.

As for its business, Tesla is poised to hit the ground running once the danger of this coronavirus is dealt with. The company has started its first deliveries of this Model Y crossover, also a vehicle that may be its most successful. Tesla has started ramping its attempts in China, which has dealt with the first wave of this virus. If Tesla is going to be wise using its funding expenses, and whether the firm keeps its operations lean, it could very well emerge from this pandemic stronger than previously.

As of writing, Tesla stock is trading +5.70% at $470.44 each share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any places over 72 hours.

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