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Tesla stock in focus after SpaceX launch

Yahoo Finance Video
Updated

Yahoo Finance's Brian Sozzi, Alexis Christoforous, and Heidi Chung discuss the market action for Tesla.

Video Transcript

BRIAN SOZZI: Let's take a look at what the companies are watching on YahooFinance.com and our trustee app-- all eyes on Tesla this morning after Elon Musk's SpaceX successfully launched into orbit over the weekend. Heidi Chung is back with us with the details. Heidi, a big weekend for space.

HEIDI CHUNG: It was historic, Brian, over the weekend, for space travel, to say the least. Elon Musk's space travel and tech company, SpaceX becoming the first private company ever to launch astronauts into orbit. Saturday at approximately 3:22 PM eastern time, a Falcon 9 rocket with a Crew Dragon capsule carrying two NASA astronauts, launched from Florida's Kennedy Space Center. And less than one day later, the spacecraft docked at the International Space Station.

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Now the successful launch is great news for Elon Musk. But looking at the way the Tesla shares are trading this morning, it appears as though Tesla investors are also reaping the benefits of SpaceX's success. Tesla stock surging more than 5% this morning, and seeing there was no notable news over the weekend regarding Tesla, it appears as though Tesla's stock and its bump this morning can be attributed somewhat to SpaceX.

It's important to note, though, besides having the same CEO, Elon Musk, there's no binding elements between Tesla's business and SpaceX's business. But seeing Tesla stock move on SpaceX news is not all that new, according to Wall Street analysts. Baird's Tesla analyst, Ben Callow, pointing out in a note last week that in the past, Tesla shares have previously traded around SpaceX launches. Now the space race is booming, Brian. And people are looking for ways to jump in and invest in the industry. And that's a reason why we're not just seeing Tesla shares up this morning. But Virgin Galactic, a publicly traded company, ticker SPCE, is also up more than 5% this morning. Brian?

BRIAN SOZZI: What, Heidi? The Tesla Model 3 doesn't fly?

HEIDI CHUNG: [LAUGHS] Well, Tesla Model 3 absolutely does fly. But if you think about it, a lot of investors in Tesla are also mostly investing in Elon Musk-- his vision, his plan for the future when it comes to autonomous vehicles, and also space travel. And being that you can't really invest directly into SpaceX, it does make sense that we are seeing investors piling a bit into Tesla because they want to invest in Elon Musk's future.

BRIAN SOZZI: All right, you heard it here first. The Tesla Model 3 flies, according to our very own Heidi Chung. Heidi, thanks so much.