If You Invested $10,000 In Tesla 10 Years Ago, Here's How Much Money You'd Have Today
As the calendar hurdles toward the end of 2024, electric vehicle manufacturer Tesla is solidly ranked among the 10 largest companies in the United States based on market capitalization. For the uninitiated, market cap is defined as a company's share price multiplied by the number of outstanding shares. Indeed, the brand is nothing short of a household name and considered synonymous with electric vehicles to many consumers. But 10 years ago, investors were taking a leap of faith by investing in the rambunctious upstart.
At the time, Tesla only sold two models: its flagship Model S sedan and the Model X, a futuristic SUV featuring gullwing doors in the rear, a'la DeLorean. Neither vehicle was particularly affordable, and the more wallet-friendly, entry-level Model 3 and Model Y were still years away. Yes, four of Tesla's vehicles are named S, 3, X, and Y. Kudos if you get Elon Musk's joke.
Also kudos to the brave early investors in Tesla, who made a small fortune if they purchased shares 10 years ago and managed to resist the temptation to sell along the way as their position appreciated. How much did 10-grand blossom in 10 years? Let's just say it's enough to buy a few Cybertrucks and still have some change left over to pay your electric bill.
Stock splits are often a bullish indicator
While this article focuses on gains over the past decade, Tesla actually went public a few years earlier; June, 2010, to be exact. Like many initial public offerings (IPOs), Tesla's stock was bid up considerably on its first trading day. It closed at $23.94 versus an IPO target price of $17. By December, 2014, the earliest Tesla investors already enjoyed a blockbuster jump in stock price to approximately $225 per share, depending on the exact trading day that month. However, as impressive as that early performance was, the bulk of price appreciation was yet to come.
Like other high-flying stocks such as Amazon and Nvidia, the secret sauce to Tesla's outsized gains is multiple stock splits. MoneyDigest has previously discussed the mechanics of stock splits, but in a nutshell, Tesla stock split 5-for-1 in August 2020, followed by another 3-for-1 split in August 2022. Combined, that means every share of Tesla stock owned prior to August 2020 is now equal to 15 (1*5*3) shares today.
In other words, the December, 2014 cost basis of about $225 is actually equal to just $15 per share (225/15) when adjusted for the two rounds of stock splits. At the time of writing, Tesla is trading at exactly $463.02 per share. Doing some quick math, $463 divided by a split-adjusted 2014 purchase price of $15 equals a gain of 3,087%. That means a $10,000 investment in Tesla in December, 2014 would be worth about $308,700 today.
Musk's relationship with Trump is a boost
Glancing back at profit potential from 2014-onward begs the additional question, what if you had purchased $10,000 worth of Tesla stock on its opening day in 2010? Well, $10,000 divided by the June 29, 2010 split-adjusted closing price of $1.59 equals ownership of 6,289 shares today. At the current price of $463 per share, those share are now worth $2,911,807. Yes, that's almost $3 million dollars from a $10,000 investment made in 2010.
Interestingly, if this same article had been written several months ago, these figures — though still impressive — would have been quite a bit more modest. That's because Tesla's stock rallied more than 80% since 2024's presidential election. To wit, TSLA closed at $251.44 per share on election day, November 5, 2024. That's compared with $463.02 per share today.
Prior to the insanely expensive 2024 presidential election, some investors felt that Tesla was caught in the doldrums. An aging vehicle lineup, competition from Chinese EV manufacturers, declining demand for EVs in general, and continued new product delays all conspired to hammer Tesla's stock price. So what happened? Tesla's controversial CEO, Elon Musk, aligned himself politically with President Elect Donald Trump. In short, it's thought that Musk's camaraderie with Trump could lead to less stringent rules for autonomous (self-driving) vehicles, as well as the possibility of Tesla being allowed to import vehicles manufactured less expensively in China, among other possibilities. Do you think Tesla is priced for perfection at $463 per share? Or is it the stepping stone to another 3,000% profit payday in the year 2034?