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Tesla Motors Inc (TSLA): Introducing the ‘Cornwell Effect’

Tesla Motors Inc (NASDAQ:TSLA) just can seem to do no wrong in the month of May. Is there any way that this month could be extended by executive fiat to be, say, 100 days long? The good news just keeps on coming for Tesla, and that has led to a dramatic effect on the stock price, which has shot up 72 percent just this month alone, and has grown more than 300 percent since September.

Tesla Motors Inc (TSLA)How do we know this? We’ll call this the “Cornwell Effect.” We bestow this honor onto U.K. student Sam Cornwell, 32, married with a young child. Mr. Cornwell, you see, became a big fan of Tesla Motors Inc (NASDAQ:TSLA) back in September, when Tesla was just another car company – though maybe a curiosity at the time, since it was an electric-car company, a luxury electric-car company, and one of the few companies to receive U.S. government assistance and not go belly-up. Cornwell read about the company and its CEO, Elon Musk, last fall and was so convinced about the company that he put his entire life savings – $25,000 – into Tesla stock when it was trading about $27.50 a share. For those of you non-math wizards out there, that bought about 909 shares.

The stock slowly started moving in a positive direction But then, May happened. Positive would be an insult to Tesla Motors Inc (NASDAQ:TSLA). First, there was the winning quarterly earnings report (which was later downplayed a bit), then there was the near-perfect score in a review by Consumer Reports; and now the company can brag about raising $1 billion of cash in a secondary stock and debt offering just this week to help the company pay off its remaining government loan balance.

So, back to Cornwell. The guy who threw his life savings into a virtually unknown electric-car manufacturer just a few short months ago, is now riding high – his 909 shares in Tesla Motors Inc (NASDAQ:TSLA), worth $25,000 in September, are now worth nearly $84,000 based on Friday’s opening price. Is this time for Cornwell to take his profits? “If I thought there would be a serious problem with the company, I would sell,” he said. “I don’t want to sell. I’m happy to sit with it until I really need the money.”

Guess we can say that Cornwell expects the Cornwell Effect to continue. “The story is exciting. I’m addicted to Tesla,” he said. “My son is going to get some Tesla stock for his first birthday.” Spoiler alert.

What are your thoughts? Let us know what you think about Tesla Motors Inc (NASDAQ:TSLA) in the comments section below.

DISCLOSURE: None

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