Posted: August 3rd, 2022

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You  may have seen how financial news outlets provide real-time financial  market reporting. They often produce stock-market news feeds for  traders; these news feeds include a stock chart. The stock chart may  include different filters that allow you to see how the stock is  performing today or has performed over one or more years.

 There are many factors that will influence pricing that can’t be  controlled or predicted accurately. The approaches used to value stocks  (determine what the stock is truly worth) are usually theoretical. You  should consider what drives stock prices and why.

For this discussion, first go to Mergent Online. Find the pricing chart under the “Company Details” tab, then click on Pricing Summary  for your selected company. This is the company you have selected for  your Project Two assignment. Filter the time period to one year.

In your initial post, address the following:

  • Discuss how the stock for your company is trending. Explain why the stock is in either an uptrend or downtrend.
  • Discuss some of the factors, including environmental, sustainable,  and governance (ESG) factors, that you believe have impacted the stock  performance and why.
  • Convince your peers to either invest in your chosen company or to not invest in the company. Explain your reasoning.

In your response posts to at least two peers, discuss the following:

  • Do you agree with your peer’s argument to either invest or not  invest in their company? Explain why or why not, making sure to also  include information not previously shared by your peer

Post by Joshue Brown

 

Discuss how the stock for your company is trending. Explain why the stock is in either an uptrend or downtrend.

Tesla’s stock has a positive trend over the past year.  The stock has  ranged from a low of $187.06 a year ago to a high of $883.09 on January  26, 2021 (Yahoo, 2021a).  Tesla’s shares have skyrocketed more than  20,000% since it went public in 2010, with its price rising more than  700% over the last year (Levin, 2021).  This growth has made Tesla the  most valuable car company in the world.  There are many reasons for this  epic growth.  After years of not turning a profit for years, Tesla has  finally shown a profit for the last 6 quarters.  Tesla also beat  estimates by producing more than 500,000 vehicles and selling its fifth  vehicle, Modle Y, ahead of schedule (Levin, 2021). In addition, Tesla  was added to the S&P 500 on November 16th, 2020, which helped the  share price spike.  These are the main drivers of the success of Teslas  stock over the past 12 months.  Another positive trend that has factored  into the growth of Tesla’s stock is the growing demand for EV stocks in  general. Tightening emission regulations and the government’s continued  push towards renewable energy have also help Tesla’s shares rise. 

Discuss some of the factors, including environmental,  sustainable, and governance (ESG) factors, that you believe have  impacted the stock performance and why.

Since taxpayers subsidize most of Tesla’s business, their ESG rating,  such as environmental, sustainable, and governance, is important.   Tesla’s total ESG rating is 31, which is high and places them in the  62nd percentile.  Their environmental risk score is 3, the social risk  score is 17.3, and the governance risk score is 11 (Yahoo, 2021).  While  Tesla is an environmentally friendly company, the production of its  products harms the environment.  The production of their cars is  C02-intensive, and the production of their batteries takes many raw  materials to make, such as nickel, cobalt, aluminum, and graphite which  are prone to cause deforestation and water contamination (Tesla  Valuation, n,d.).  Overall the reduction in CO2 emissions of their cars  generates 50% fewer emissions as a car with an internal combustion  engine.  Therefore the overall impact on the environment is positive  (Tesla Valuation, n,d.).  Tesla also scored low on water conversation  (Tesla Environmental, n.d.).  

Tesla does not rate well in the governance portion of the ESG.  The  “bailout: of Elon Musk’s cousin’s company. Soar City caused shareholders  to sue. Second, musk was forced to step down as chairman of the board  in 2018 when he had to settle fraud charges with the SEC regarding a  tweet about taking Tesla private. Third, several of Tesla’s board  members have ties with other Musk companies, which creates a conflict of  interest.  Finally, Musk’s compensation package had caused scrutiny  when the board of directors approved a compensation package that made  Musk the highest-paid CEO in US corporate history (Is Tesla Sustainable,  2020).

Convince your peers to either invest in your chosen company or to not invest in the company. Explain your reasoning

With all of Elon Musk’s controversies with his involvement in  cryptocurrency, the SpaceX program, his solar endeavors, and his erratic  behavior, I would not recommend investing in Tesla.  The stock is  already near its all-time high, and competition in the EV field will  reduce its market share. In addition, the history of Musk’s behavior,  such as smoking marijuana during a live podcast, tweeting about taking  Tesla private, and comments on Saturday Night Live regarding  cryptocurrency he is involved with, have had an immediate negative  effect on Tesla’s stock price.  

Is Tesla Sustainable? How Does Tesla Perform On ESG Ratings? Your Green Wealth. (2020, December 10).

Levin, T. (2021, February 7). Tesla’s stock price has left Wall Street analysts scratching their heads. Here’s what’s fueling the searing rally. Business Insider.

Tesla Environmental, Social, and Corporate Governance Profile. censible.co. (n.d.).

Tesla Valuation based on ESG factors. GRIN. (n.d.).

Yahoo! (2021, June 9a). Tesla, Inc. (TSLA) Interactive Stock Chart. Yahoo! Finance.

Yahoo! (2021, June 9b). Tesla, Inc. (TSLA) Environment, Social and Governance (ESG) Ratings. Yahoo! Finance.

Post by Bonnie

 

Class,

The company I have chosen for the projects within this course is  Disney. Upon reviewing the pricing summary for Disney through Mergent,  the one-year period stock prices have ranged between $201.91 and  $109.10. As of Monday June 7, 2021, the closing price was $176.99. The  trend has been slowly moving upward from the low a year ago of $109.10  although it is 6.37% below the high of $201.91 during the past 100 days.  This does pose a risk of further decline. (Mergent 2021).

In March 2020 Disney suspended its cruise operations and closed theme  parks in California and Florida due to the spread of coronavirus and  the Covid-19 pandemic. (Sloan 2020). Due to the pandemic Covid-19,  Disney had an increase in their streaming division since people were  staying home and theaters were closed. The theme parks are slowly  expanding their daily capacity limits as the more people are being  vaccinated and the CDC guidelines are less restrictive.

I believe that Covid-19 played a significant part in the stock prices  for Disney. Due to lack of operations in their travel section, and  theme parks stocks would decrease. The upswing in the streaming division  during the pandemic helped to prevent a massive fall in stock. Though  the overall stock did go down without the increase in the streaming, I  feel the stocks would have plummeted further.

Even though Disney had to shut down their cruise lines, theme parks  and many of their resorts they have plenty of cash to manage these  disruptions. Disney has seen phenomenal growth in their streaming  platform and has managed to keep generating cash flow. (Ballard 2020).  For reasons such as this, buying stock in Disney is a great long-term  investment.  

Best,

Bonnie B.

References

Ballard, J. (2020). 3 Reasons Disney is a Safe Stock to Buy Right Now. Retrieved from:

Mergent. (n.d.). Disney (Walt) Co. Retrieved June 8, 2021, from:  

Sloan,

G. (2020). Disney Cruise Line to Suspend Operations Due to Coronavirus. Retrieved from: https://thepointsguy.com/news/disney-cruise-line-suspends-operations-due-to-coronavirus

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