[VIDEO] Did You Catch This Runaway Stock?
I have a quick question for you. Did you catch Tesla’s (TSLA) crazy run?
I definitely have some thoughts about it! Check out the video below for details…
Monumental Gains in a Hurry
When I saw Tesla shares jump above $300 back in October, I thought it was nuts.
After all, the company still hasn’t posted an annual profit, and there has been a predictable cycle of company founder Elon Musk overpromising and then failing to hit his targets.
Don’t get me wrong… I think Musk is a tremendous innovator, and I love his cars.
But with the stock price hitting new highs day after day, the company is worth more than many of the largest Fortune 500 companies that have been generating reliable profits for years!
Could the stock really keep trading higher?
Well, as you can see in the chart above, shares continued higher for months, briefly crossing $900 — and posting more than a 200% profit after I thought the stock was likely to have peaked.
Did you have shares in your account? Do you still own shares of TSLA?
Send me an email and let me know! (EdgeFeedback@StPaulResearch.com)
So What Now? Is the Party Over?
After topping out at $968.99 a share on Feb. 4, shares pulled back by more than $250, hitting a low of $704.11 the very next day.
This just shows how wild the ride has been and how quickly big gains in runaway stocks like TSLA can evaporate.
But does that mean the fun is over? And if you don’t own TSLA shares, did you miss out on this opportunity?
I can’t tell you with 100% certainty that TSLA’s run is over. But I can tell you that there’s a lot of risk as this stock jumps higher and lower.
That doesn’t mean you can’t still make some great profits from TSLA’s crazy run.
Because just last week, a very large transaction went largely unnoticed by the adrenaline-junkie TSLA trading crowd.
You see, on Thursday evening Elon Musk made one of the smartest financial moves for TSLA ever.
The company used its crazy stock price to raise $2 billion in cash — money that can help the company grow, pay down debt OR hand you a giant overnight gain (as I’ll explain in just a moment).
Here’s how the $2 billion transaction worked.
Tesla essentially created 2.7 million new shares of stock and then sold them for $767 per share.
Now, THAT’S how you take advantage of a runaway stock price!
Tesla now has plenty of cash in the bank, and that cash will be very useful for the company’s future survival and growth.
Now the real question we need to ask ourselves is how can WE capitalize on the giant money grab that Tesla engineered last week?
Setting up a Backdoor TSLA Play
In a conversation with my Buyout Millionaires Club Executive Boardroom members last week, I mentioned that companies will start using their surging stock prices as currency for new buyout transactions.
[If you’re unfamiliar, Buyout Millionaires Club focuses on companies that are primed to receive an overnight buyout offer that will send shares surging higher. My One Day Bonus Indicator scans the market for unusual activity that typically precedes these buyout transactions, alerting us when it looks like a deal is about to happen. You can find out more about Buyout Millionaires Club here.]
Just one day after that conversation, Tesla announced its $2 billion offering, which instantly gives the company a treasure chest of cash that can be used for buyout opportunities like this.
My indicator — and my research team — are now scanning the markets to figure out exactly which company will most likely receive a buyout offer from TSLA in the next few weeks.
And you can be sure that once we zero in on unusual activity pointing to a new takeover deal, our Buyout Millionaires Club members will be the first to know.
You see, investing in shares of a runaway stock like TSLA can be a dangerous move. Just look at the $250 drop in the stock over a single day.
But understanding the backdoor plays that a runaway stock like this can create can help you to bag the same sorts of profits with much less risk.
So we’ll continue to keep an eye on TSLA and what the company is up to.
And don’t forget to send me YOUR experience trading (or staying away from) this runaway stock.
Once again, you can reach me at EdgeFeedback@StPaulResearch.com.
Here’s to growing and protecting your wealth!