Tesla surges 9% after reopening its Shanghai factory following coronavirus shutdown
- Tesla's Shanghai Gigafactory is expected to reopen Monday following a closure related to the coronavirus outbreak, and will receive government assistance to do so, Reuters reported.
- Shares of Tesla gained as much as 9% in early trading Monday.
- It's the latest wild swing for the stock following a week where it posted both double-digit gains and double-digit losses.
- Watch Tesla trade live on Markets Insider.
- Read more on Business Insider.
Tesla's surging, again.
Shares of the Elon Musk-led automaker gained as much as 9% in early trading Monday, continuing to climb following a volatile week for the stock.
The gains were fueled by a Reuters report late Friday that the automaker's Shanghai factory would reopen on Monday following a closure due to the coronavirus epidemic. The company will also receive assistance from the Chinese government to resume production, according to the report.
"In view of the practical difficulties key manufacturing firms including Tesla have faced in resuming production, we will coordinate to make all efforts to help companies resume production as soon as possible," Shanghai municipal government spokesman Xu Wei said, according to Reuters.
Tesla announced January 29 that it expected a production delay of one-and-a-half weeks at the factory due to a government-ordered shutdown prompted by the coronavirus epidemic, which has killed more than 700 people.
The closure was expected to delay in February the deliveries of some Model 3 sedans made at the factory, said Tao Lin, vice president at Tesla. Still, the shutdown and delay were not expected to have a significant impact on the automaker's first-quarter financial results, as the Shanghai factory is not yet a major contributor to earnings, Zach Kirkhorn, Tesla's chief financial officer, said in late January.
Tesla's stock has whipsawed lately. Last week, the stock posted double-digit gains on Monday and Tuesday and reached as high as $968.99 per share before falling 17% Wednesday.
The stock has surged this year following positive earnings numbers and rosy forecasts for the automaker's future growth.
It fell on fears that the stock's rapid climb was a bubble, or that it was fueled by a short squeeze, which is when short-sellers stop betting against a stock as the price gains push losses to the limit. Tesla shares were also dragged lower when the coronavirus emerged and threatened production in China.
Tesla has gained about 79% year-to-date through Friday's close.
