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| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Tesla’s Stock: An Event Case Analysis |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 237 |
| Date | 2018 |
| Abstract Text | The automotive pioneer Tesla revolutionised the way consumers perceived electric cars and forced the whole industry to face the upcoming electric vehicles revolution, influencing major carmakers to develop serious commitment with related projects in the short- to mid-term horizon. Thus, Tesla played a fundamental role in bringing to light products that not only appeal to a broad segment of people, but that also minimise the adverse impact on the environment. At the same time, despite several consecutive quarterly losses, Tesla has achieved a market capitalisation, which sizeable growth in valuation has overcome the ones of major long-established car manufacturers in the automotive industry. In light of this information, this study seeks to respond to the core research question, namely: “How can exceptional performance of Tesla’s stock be explained?” Presenting an up-to-date overview of the context that emerges from a multitude of studies, the analysis encompasses the comparison between Tesla and traditional players in the car industry, the event analysis of Tesla’s stock which is compared to major carmakers by means of abnormal returns, in order to unveil the significance of the effect that news stories might exert on valuation changes and explain the market discrepancies within the automotive sector, in relation to investors’ sentiment. Therefore, linking the qualitative and quantitative research methodologies and identifying the broader context in order to explain Tesla’s market capitalisation. The findings illustrate that the consolidation of a multitude of elements can clarify the rare circumstances under which Tesla has been able to achieve enormous fame from entering successfully the highly competitive automotive industry as a start-up only 15 years ago and overcoming long-time established car manufacturers in the market valuation comparison. Possible forthcoming disruptive scenarios with disparate prospects, offer incommensurable opportunities that extend far beyond the sole car business as of today. At this conjecture, Tesla’s market capitalisation is primarily justified through the information that is available to the public eye and being gathered via open source capabilities, thus investors being able to anticipate those scenarios and market conditions in which the company might benefit from its business model and the competitive and technological advantages in the long run, when compared to traditional car companies. Consequently, it is fair to assess that the findings might further the depth and totality of a particular phenomenon capable of assisting the formation of guidelines, and provide information regarding the present situation. Hence, this study might underpin the basis for progression towards key findings and object of recommendations for further research. |
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