0: - I don't think any other stock has captivated investors

4: on Wall Street or Main Street the way Tesla has.

8: It's just become one of the most controversial names

11: and one of the most watched names out there.

14: This summer, Tesla became the most valuable auto company

18: in the world,

19: surpassing Toyota and claiming a market cap

21: of nearly $183 billion before continuing its climb.

26: - The electric vehicle maker's stock speeding this year.

29: - Musk's wealth skyrocketing

30: thanks to a surge in Tesla shares,

32: making him wealthier than Warren Buffet.

35: - But the company's fundamentals

36: don't seem to explain the rise.

39: For example, Toyota sold almost 25 times as many

42: vehicles as Tesla did last year.

45: Instead, the rally has been driven by investor enthusiasm

48: for CEO Elon Musk.

50: In a belief by some that in the future,

52: cars everywhere will be powered by batteries,

55: not gasoline.

56: Here's how Tesla became the most valuable auto maker

59: in the world.

62: Tesla developed its first car in the early 2000s.

65: But to follow its ballooning share price,

67: a good place to start is last fall.

69: In October 2019, Tesla reported a surprise profit

73: for its latest quarter,

75: and that just sent its shares soaring.

78: Just a few months prior,

80: Tesla shares were hovering near a three year low.

84: The prior year, Elon Musk had tweeted

85: that he was going to take Tesla private at $420 a share.

91: And that landed him in the cross hairs of regulators.

94: He also kind of had a history of missing financial targets

97: and car delivery targets.

99: So that's why this surprise earning spree

101: was a really big deal.

102: Amid the rush of investor optimism,

104: in mid-November Musk held an event in Los Angeles

108: to reveal Tesla's Cybertruck.

110: What he did was he unveiled this pickup truck

113: that looked unlike any other pickup truck

116: we had ever seen before,

117: and he boasted that it was really, really durable.

121: At the event, a Tesla employee

123: threw a metal ball at the window to show its strength

126: but ended up breaking the glass.

128: - I should say also, we're going to be offering rides

130: in this all night.

131: (audience cheers)

136: Yeah, don't mind the glass.

138: (audience laughs)

139: - The next day, shares fell more than six percent,

142: but amid press around the event,

144: the stock quickly recovered,

146: and on December 23, it surged past $420.

150: The reason that 420 mark is kind of a milestone

153: is that, you know, that was kind of the tweet

156: that landed Musk in the cross hairs of regulators.

159: The SEC later said the tweet

161: was a reference to marijuana culture

162: that Musk used to amuse his girlfriend.

164: The shares crossing 420 later in the year,

167: it was kind of a victory in that sense.

169: In the following weeks, Tesla had a string of wins.

172: The company said it met its delivery goal

174: of 360,000 cars for the year.

177: And less than a year after breaking ground

179: at its China plant,

180: the car maker met its objective for Model 3 production

183: at the facility,

184: and held a press conference to celebrate deliveries

186: of China-made Model 3s to Chinese customers.

190: Many people viewed China as the world's biggest market

193: for electric vehicles,

195: so in order for Tesla to make this journey

198: from a small start-up to a global behemoth

202: producing electric cars,

204: Polish investors say that it needs to target that market.

207: So this boosted expectations for the coming year.

211: The investor momentum continued when on January 29,

214: Tesla posted a profit for the second quarter in a row.

217: On the earnings call,

218: the company said it was well on its way

220: to producing its next car,

222: the Model Y compact sport utility vehicle.

225: And it told investors the business should be profitable

227: going forward.

229: So this was around the time that Tesla shares

232: really just started to go parabolic,

234: and you saw Wall Street investors, Main Street investors,

237: kind of all piling into Tesla shares, Tesla options,

242: and it just kind of became this huge frenzy

244: around the company.

246: But not everyone was betting for the car company.

249: The fascinating thing about Tesla is that

252: despite its meteoric rise in the stock market this year,

256: it remains one of the most popular shorts,

259: so that means it's a really popular bet for investors

262: who think the shares are going to absolutely plummet.

266: When the stock goes up,

267: that's painful for a short investor.

269: That means that they're losing money.

271: So some people can't hold on

272: to these money-losing positions for too long,

275: so they have to close out their position,

277: and sometimes they do that by buying Tesla stock.

280: In this kind of unusual twist,

281: you have investors who think the shares are going to go down

286: actually helping to drive it up.

289: But the stock run-off was stopped short in March.

292: Despite investor enthusiasm,

294: Tesla was not immune to the market effects

296: of the Coronavirus lockdowns.

299: That month, California issued stay-at-home orders,

302: leading Tesla to suspend production at a factory,

305: and interrupting the company's ramp-up

306: for its newest vehicle.

308: The stock fell in March and then quickly bounced back

310: as the market started to recover.

313: At the heart of this downturn,

314: the federal reserve enacted a massive stimulus plan

317: to buoy the economy,

318: fueling a broader recovery in the stock market

321: that also lifted stocks like Tesla.

323: On April 29, Tesla reported another profit,

326: the third in a row.

327: Even through the low of the S&P 500,

330: the S&P was down roughly 30 percent year to date,

333: and meanwhile, even through that time frame,

335: Tesla stock was up.

337: So despite a recession,

339: a global pandemic that could crimp demand for cars,

342: Tesla's stock has still been resilient this year.

346: Then on June 10, investors pushed the auto makers' stock

349: past $1,000 a share for the first time ever.

352: After Musk told employees it was time to begin production

355: on the company's all electric semi-trailer truck.

358: By July, Tesla became the world's most valuable car maker,

362: overtaking Toyota,

363: and on the 2nd, Musk taunted the short sellers

366: when shares opened above $1,200 for the first time

370: after Tesla deliveries beat expectations

372: and investors anticipated the company's inclusion

375: in the S&P 500 Index.

377: In order to be considered for the S&P 500,

380: a company needs to deliver a cumulative profit

382: over four consecutive quarters,

384: including the most recent.

386: So even before Tesla's most recent earnings report,

389: a ton of investors were anticipating,

392: hey we think it's going to be profitable this quarter,

394: we think it's going to be in the S&P 500,

396: and that drove the stock even higher.

399: On an earnings call on July 22,

401: Tesla said it hit that goal,

404: defying the Wall Street bears who expected a loss.

407: - We were able to achieve

409: a fourth consecutive profitable quarter,

411: and although the automotive industry was down

414: about 30% year over year in the first half of the year,

417: we managed to grow deliveries

419: in the first half of the year.

420: - If you bought 10 shares of Tesla last June, in June 2019,

424: it would have cost you a little more than $1,700.

428: If you held on to that investment through late July,

432: it would have been worth more than $15,000.

435: Bears still say that the stock is going to go down.

438: They don't think that Tesla will bring electric vehicles

441: to the masses.