Financial Accounting Report: Tesla and BHP Share Price Analysis

This report provides a comprehensive analysis of financial instruments and market dynamics, focusing on the share price performance of Tesla Inc. and BHP Billiton. The report examines the impact of major news events on Tesla's share price, including events in January and March 2019, and quantifies their effect on stock value. Additionally, it undertakes an industry and company analysis of BHP, using Porter's Five Forces to assess the factors influencing its share price. The analysis considers threats from new entrants, bargaining power of suppliers and buyers, and the threat of substitute products. The report concludes with a summary of findings, highlighting the relationship between financial performance, market movements, and share price trends for both companies. The report uses data from various financial sources, including Bloomberg and Yahoo Finance, to support its analysis.

Running head: FINANCIAL ACCOUNTING
Financial Instruments and Markets
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Table of Contents
Introduction:....................................................................................................................................2
Identifying the major news stories, events or issues related to the company that affected the share
price by 5%:.....................................................................................................................................2
Undertaking the industry and company analysis for BHP question asks you to consider the
factors, which influence BHP’s share price:....................................................................................4
Conclusion:......................................................................................................................................6
References and Bibliography:..........................................................................................................7

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Introduction:
The overall assessment aims in evaluating the overall impact of relevant news on the
Share price performance of Tesla Inc., which changes with the alterations in Company’s
performance. Three different events have been analyzed for Tesla Inc. to determine the level of
changes in share value that has occurred during the period. The evaluation of the overall news
and its impact on the share price is directly provided in the assessment to identify the level of
changes that was initiated by the investors of the organization. Moreover, the financial
performance of BHP Billiton has been analyzed for detecting the overall current stock price and
theoretical stock price of the organization. This analysis would directly help in detecting relevant
factors that might have overall impact on the share price of the organization.

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Event 1
Event 2 Event 3
Identifying the major news stories, events or issues related to the company that affected the
share price by 5%:
Events Date Previous Day close Close Return
Event 1 02-01-2019 332.8 310.12 -6.81%
Event 2 18-01-2019 347.31 302.26 -12.97%
Event 3 01-03-2019 319.88 294.79 -7.84%
The above table and graph directly provides information about the overall events that
occurred in Tesla during the period of 1 December 2018 to 1 March 2019. From the relevant
evaluation, it could be identified that the three events occurred during the time period had more
than 5% impact on share price value. The above figure provides information about the overall
share price movement of Tesla Inc. for the period of 4 months, where the price of the company
relatively declined due to the different events that occurred in between (Ir.tesla.com). The
company was had to deal with three different major events, which negatively affected the share

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price and increase the sell-off process by the investors. The three events are adequately analyses
as follows.
Event on 02-01-2019: The first deposit event occurred during 2 January of 2019, where the
relevant information regarding the alterations in the price structure of the company was depicted.
Shareholders of the organization negatively received this reduction in the overall sales value of
cars by more than $2,000. Hence, the share price of the organization lowers at the levels of 6.1 %
in comparison to the previous day closing. The reduction in car prices was taken negatively by
the shareholders as it directly affects the shareholders wealth and negatively reduced their
income from the organization (Ir.tesla.com).
Event on 18-01-2019: The second event occurred during 18 January 2019, where relevant
information about the Reduction in full time employee headcount by approximately 7% by the
organization. The relevant reduction in the employees of the organization directly indicated the
reducing financial capability of the company to maintain its operations without increasing
relevant loss. Therefore, the investors understood the current problematic conditions of the
organization in achieving higher growth rate and profit in the financial year. This is the main
reason why the overall Share price of the organization declined by 12.97%. Company’s
performance during the financial year was relatively deteriorating, which led to the drastic
decisions falling of 7% of the total workflows. However, the reduction in the workforce would
directly affect its overall Production capability and its revenue generation capability. Hence, the
decision made by the organization was negatively accepted by the shareholders of the company
with reduced the share price value by more than 12% on a single day trade (Ir.tesla.com).
Event on 01-03-2019: The table also provide the relevant information about the third event,
which occurred during 1 March 2019, the overall share price of the organization declined by

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7.84%. Reduction in the overall share prices due to the decisions made by the management
regarding the return policy. The return policy states that customer can return a car within 7 days
or 1,000 miles for a full refund. Quite literally, you could buy a Tesla, drive several hundred
miles for a weekend road trip with friends and then return it for free. The shareholders of the
organization negatively took the decision that was made by the management regarding the free
trial that was provided to the customers. This is the main reason why major share sell off was
with pleasure during period (Ir.tesla.com).
Undertaking the industry and company analysis for BHP question asks you to consider the
factors, which influence BHP’s share price:
The Porter’s five forces can be used for analyzing the link between the share price of the
organization and the industry. From the relevant analysis, it can be detected that the overall share
price of the company is directly linked with the impacts from its industry. The analysis of the
industry impact can be conducted as follows.
Threat of New Entrants: the threat from new entrants is relevantly huge, which is making the
organization to maintain their competitive price strategy, while reducing the total cost involved
in operations. This is reducing the capability of the company to achieve exponential growth in
their profits. Hence, the share price of the company is lingering within low price range.
Bargaining Power of Suppliers: BHP is one o he major supplier of materials in to the industrial
metals and mining products, which indicates that there is no relevant threat from the power of the
suppliers. However, the company cannot increase the price of the minerals and iron, as it would
discontinue supply.

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Bargaining Power of Buyers: The bargaining power of the buyer is relevantly low, as the
demand for the products provided by BHP is relevantly high in the market.
Threat from Substitute Products: There is relevantly no substitute for the products delivered by
BHP, which mainly states the positive trend in their sales and revenue generation capability.
Hence, the evaluation of the Porter’s 5 force of BHP, it can be detected that the share
price trend of relevant adequate, as per the industry levels. The share price of the organization is
mainly linked with the financial performance of the organization. Moreover, the capital market
price movement is also affecting the share price performance of BHP Billiton, as the company’s
overall beta is at the levels of 0.54, which indicates about their positive correlation.
Conclusion:
The overall assessment has mainly analyzed the share price performance of Tesla Inc.
over the period of 4 months where the current share price of the company altered due to the
drastic decisions made by the management. From the relevant analysis, it could be identified that
the overall share price of Tesla Inc. has mainly indicated that the share price of the company
altered due three events. Moreover, the share price of BHP Billiton is mainly overvalued, as per
the theoretical price and current price of the organization. Furthermore, from the relevant
evaluation, it has been detected that the performance of BHP Billiton is directly linked with the
different factors such as financial performance and market movement.

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References and Bibliography:
Aasx.com.au. 2019. Asx.Com.Au. Accessed May 15 2019. https://www.asx.com.au/asx/share-
price-research/company/BHP/statistics/shares.
Bloomberg.com. 2019. Bloomberg.Com. Accessed May 15 2019.
https://www.bloomberg.com/quote/AS30:IND.
Bloomberg.com. 2019. Bloomberg.Com. Accessed May 15 2019.
https://www.bloomberg.com/markets/rates-bonds/government-bonds/australia.
Finance.yahoo.com. 2019. Au.Finance.Yahoo.Com. Accessed May 15 2019.
https://au.finance.yahoo.com/quote/bhp.ax/.
Finance.yahoo.com. 2019. Finance.Yahoo.Com. Accessed May 15 2019.
https://finance.yahoo.com/quote/TSLA?p=TSLA.
Ir.tesla.com. 2019. Ir.Tesla.Com. Accessed May 15 2019.
https://ir.tesla.com/static-files/bc1eddb4-7632-4b79-8862-8d31adb2a419.
Ir.tesla.com.2019. Ir.Tesla.Com. Accessed May 15 2019.
https://ir.tesla.com/static-files/87d77f9e-8b7c-4bd7-b9ca-7080f2dbe690.
Ir.tesla.com.2019. Ir.Tesla.Com. Accessed May 15 2019. https://ir.tesla.com/node/19336/pdf.