Tesla's String Of Profits Opens A New Door For World's Most Valuable Automaker
Already a Wall Street superstar, Tesla turned a profit for the fourth straight quarter, an important milestone that will make it eligible to join the S&P 500 stock index for the first time.
Even though its main factory in Fremont, Calif., was closed for much of the time, the electric-car maker brought in more than $6 billion during the second quarter, well above analysts' expectations. Tesla reported a profit of $104 million, a reversal from a year earlier when it lost $408 million.
"Our business has shown strong resilience during these unprecedented times," a company statement said.
Tesla's stock has enjoyed towering gains this year, going from $430 a share at the start of 2020 to nearly $1,600 at the close of trading Wednesday. It's the biggest automaker by market value. Even its CEO, Elon Musk, has called the company's stock overvalued.
If Tesla joins the S&P 500, as expected, many investment funds will be obligated to buy it, which means it will become part of many people's retirement savings.
"We believe the progress we made in the first half of this year has positioned us for a successful second half of 2020," the company said earlier this month.
"Production output of our existing facilities continues to improve to meet demand, and we are adding more capacity. Later this year, we will be building three factories on three continents simultaneously," it said.
On Wednesday, Tesla announced it would build a factory near Austin, Texas.
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