Behind the nice cars, Tesla has a long list of fundamental problems that has seen several large investors take up large and long standing short positions. Indeed, some of those have been losing positions for years.
This article sums it up nicely:
www.sovereignman.com...ort-the-stock-23345/
The recent news are also not encouraging.
- production halt
- 24/7 shifts (signs of extreme desperation)
- California safety lawsuit
- ongoing investigation in fatal Model X / autopilot crash
- Tesla cover-up by leaving/being kicked from NTSB investigation. In my opinion, their autopilot is clearly at fault. However, they cannot handle this liability at this time (bankrupt).
This quote from the linked article sums it up:
"Who in their right mind would continue to finance this money losing operation? Up to this point, it has been from growth investors who have likely never owned an auto stock before."
It will likely go the way of SolarCity, bankrupt.
In addition, the fundamental backdrop across all markets are looking weak (this was not the case in 2017):
- SPY, QQQ trending downward, seriously failing to make new highs
- rising interest rates, risk-off
- late credit cycle
From a technical perspective, I noted (privately) that if TSLA fails to recover $300 on a relief bounce, that is very bearish. Well, that just happened. I usually discount most "news" and fundamentals unless price action confirms. I believe price action is confirming fundamentals here.
While there is a bull flag in play, the longer trend is down. If TSLA pops to the 50ma that would be a good short entry, if I were the type to short stocks.
This article sums it up nicely:
www.sovereignman.com...ort-the-stock-23345/
The recent news are also not encouraging.
- production halt
- 24/7 shifts (signs of extreme desperation)
- California safety lawsuit
- ongoing investigation in fatal Model X / autopilot crash
- Tesla cover-up by leaving/being kicked from NTSB investigation. In my opinion, their autopilot is clearly at fault. However, they cannot handle this liability at this time (bankrupt).
This quote from the linked article sums it up:
"Who in their right mind would continue to finance this money losing operation? Up to this point, it has been from growth investors who have likely never owned an auto stock before."
It will likely go the way of SolarCity, bankrupt.
In addition, the fundamental backdrop across all markets are looking weak (this was not the case in 2017):
- SPY, QQQ trending downward, seriously failing to make new highs
- rising interest rates, risk-off
- late credit cycle
From a technical perspective, I noted (privately) that if TSLA fails to recover $300 on a relief bounce, that is very bearish. Well, that just happened. I usually discount most "news" and fundamentals unless price action confirms. I believe price action is confirming fundamentals here.
While there is a bull flag in play, the longer trend is down. If TSLA pops to the 50ma that would be a good short entry, if I were the type to short stocks.
Comment:
Today, TSLA offered another short/exit opportunity by rallying to its 50ma.
What's interesting is the action of Elon today, actually *disclosing* the fact that he bought $10M of TSLA stock. A very obvious attempt to manipulate the price upwards, or spark some upward momentum, WHILE Tesla quietly files statements that they WILL need additional capital raise:
www.zerohedge.com/ne...me-accounting-change
I find this move in financial chess very interesting. To me, it looks like desperation.
That said, a short-squeeze rally is always possible, and obviously what Elon is gunning for.
What's interesting is the action of Elon today, actually *disclosing* the fact that he bought $10M of TSLA stock. A very obvious attempt to manipulate the price upwards, or spark some upward momentum, WHILE Tesla quietly files statements that they WILL need additional capital raise:
www.zerohedge.com/ne...me-accounting-change
I find this move in financial chess very interesting. To me, it looks like desperation.
That said, a short-squeeze rally is always possible, and obviously what Elon is gunning for.
On 4/20 I said that if there is a pop to the 50ma, it would be an excellent short entry.
We see here that it tagged the 50ma and downtrend line yesterday and has now collapsed.
The situation is dire. Today: "Elon Musk unexpectedly and abruptly cut off the earnings call when he encountered a question he appeared to find "uncool."
This is not normal. I maintain that Tesla will be worth $0 and Elon will end up in prison, or will have to settle some huge lawsuit. In fact, this week they had a new $2 billion lawsuit open, related to their semi truck.