It’s been an interesting couple of weeks for Tesla – most notably a lot of negative analyst remarks about the stock.
At a Glance:
Symbol: US-TSLA Price: $180.98 Market Cap: $21.98B Yield: N/A
Tesla received multiple downgrades over the past couple of weeks – with analysts citing execution risk, priced for perfection, etc. CEO Elon Musk pretty much declared in an interview the stock to be overvalued. Even Citron Research (as I mentioned in my previous post) put their two cents in providing a report, that while not following their modus operandi of bashing a stock outright, made a very good point – at $30, it made sense to invest. At $180, you might eke out a 20% gain but based on flawless execution over the next decade.
Along with the downgrades, came a real fire – a Model S – and a YouTube video that also spread like fire.
The company reacted perfectly, as did the actual owner of the car – and with a week already passed, this event seems to be an afterthought from investors’ minds.
However, Tesla has been an unbelievable investment this past year – reminding me of ISRG back in 2005 – except catching multiple lightning bolts in a bottle – and is causing quite a dilemma.
- As an investor, I want to sell now and take the profit. No one is going to argue against the company being overvalued – and I always say no one should ever complain about making a profit.
- As a shareholder, I want to continue on the journey of a great company and hopefully a great future. We’ve already recouped most of our cost from selling my wife’s shares.
- The trader/gambler in me says stay on – 30% of the stock is still shorted and the momentum behind the stock continues to be strong.
Today, the trader in me wins – I’m still quite surprised by the 30% short interest being reported on Yahoo!. Whether these are new shorts replacing old shorts, I don’t know but surprised that the short interest hasn’t gone down as the stock has continued to go crazy. I also think that the stock still has enough momentum behind it should good news come out of the next earnings release. I’m almost confident Elon is driving his troops hard to surpass guidance and as this blog post points out, Tracking vehicle owners posting VIN # assignments and shipments seem to indicate that Tesla is ahead of their own production targets for next year.
So, the trader in me says hold on – good things to come in this quarter’s earnings release; and enough momentum still in the stock to continue it further. After that point, I am likely to sell (unless some amazingly good news were to occur). Given that the earnings release will be on the day before my birthday, I’m hoping for a celebration.