Please ensure Javascript is enabled for purposes of website accessibility

Why Tesla Stock Popped Today

By Joe Tenebruso - Jun 24, 2021 at 1:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors may soon have another reason to buy the EV leader's shares.

What happened

Tesla (TSLA -0.37%) rose on Thursday after CEO Elon Musk said he would strive to give the electric-vehicle maker's shareholders preference when a subsidiary of the privately owned SpaceX goes public. As of 12:55 p.m. EDT, Tesla's stock price was up more than 5%.

So what 

Musk said on Twitter late on Wednesday that Starlink, which is rolling out satellite-powered, high-speed internet, could have an initial public offering (IPO) once its revenue is "reasonably predictable." Musk noted, however, that a Starlink IPO is likely "at least a few years" away. 

Curvature of Earth as seen from space with the sun slightly visible.

Space stocks have proven popular among growth-focused investors. Image source: Getty Images.

Musk has found ways to tie his companies together in the past. In 2016, Tesla acquired SolarCity -- a sustainable energy business that counted Musk as its largest shareholder -- for roughly $2 billion. It's possible that Musk will also seek ways to entice some of Tesla's shareholders to invest in his space-focused ventures as well as reward them for their loyalty to the EV leader. 

Now what

The possibility of receiving priority stock allocations in a promising IPO could make Tesla's stock more attractive to investors seeking exposure to the emerging space industry. That's particularly true for those wishing to own what analysts say is the most valuable part of SpaceX's business. Morgan Stanley, for one, believes Starlink could be worth more than $40 billion. 

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
$908.61 (-0.37%) $-3.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.