How Rich Would You Be If You Invested in Tesla Stock Instead of Buying a Tesla?
Written by
Andrew Lisa
Edited by
Amber Barkley
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Spending nearly six figures on a car may not always seem like the best investment, but was it better than investing that same amount of money into the electric vehicle company itself? The short answer is no, no it wasn’t.Â
The earliest EV adopters bought the original Tesla Roadster when it debuted in 2008 for the handsome sum of $98,950. Founded in 2004 with Elon Musk as its biggest investor, Tesla always planned to eventually mass-produce cheaper EVs that mainstream drivers could afford. But at the dawn of the electric revolution on the eve of the Great Recession, the first Roadster was a novelty toy for the wealthy, and not necessarily a get-rich-quick investment ticket.
Today, the Tesla stock price is about $325. Here’s a look at the price of the first Roadster and how it could have grown for an early investor who opted for company stock over a strange but exciting new kind of vehicle.
Tesla’s Original Investors Could Buy a Share for Less Than $20
Tesla was only four years old when the company delivered Elon Musk the very first Roadster in 2008 — but it was still a privately owned company. Tesla wouldn’t go public for two more years, when it celebrated its IPO on June 29, 2010.
Although its initial public offering was $17 per share, it opened for trading at $19 per share. By the end of the trading session, it enjoyed an impressive 40.5% gain when it closed the day at $23.89. If you had invested $98,950 in Tesla’s IPO instead of spending it on a Roadster, you would have ended the day with $139,025 — more than $40,000 profit in a single trading session.
A Roadster Could Have Bought You More Than 4,000 Shares
It’s important to note that only insiders could have pulled off the previous scenario. Retail investors didn’t have access to Tesla’s IPO shares, which means $23.89 is the lowest price average investors could have paid at the dawn of Tesla’s transition to the stock market.
That means a $98,950 Roadster would have been good for about 4,142 shares. With the stock trading at around $325 today, 4,142 Tesla shares would yield you over $1.3 million.
Even if that were the whole story, a ninefold increase between then and now would have trounced the overall market’s returns — but that early investor who traded a Roadster for company stock would have far more than 4,142 shares today.
With Splits, 1 Share Becomes 15 — And Tesla Delivers Five-Digit Growth
If you look at a chart of Tesla’s stock price history, you’ll notice that it doesn’t say shares traded for $23.89 in its earliest days as a public company. It shows them trading at less than $1.30. That’s because several splits downwardly revised the value of Tesla company stock.
Companies split their stocks to increase liquidity by boosting the number of shares on the market while lowering the price to make them more attractive to a wider pool of buyers.
Tesla has done this twice:
- Aug. 31, 2020: Tesla issues a 5-for-1 stock split
- Aug. 25, 2022: Tesla issues a 3-for-1 stock split
So, factoring in splits, if you had invested $98,950 in Tesla stock as opposed to buying the electric car, you would have about $17,805,050 today.Â
Caitlyn Moorhead contributed to the reporting for this article.
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