Being bearish on Tesla (NASDAQ: TSLA) has always been a phenomenon in the investment community, but recent announcements have been casting further doubt on the celebrity CEO and his company. Several factors are coming into play, including possible charges of contempt against Elon Musk, the consistent resignations of key executives, the announcement that many retail stores would be cut despite promises, and more.
The most recent announcement from the company, which opened the possibility to reserve a Tesla “Founders Series” Semi-Truck for $200,000, hasn’t helped much in the eyes of financial experts.
“You’ve been stuck in a trading range for about 2½ years – $245 on the lower end, $390 on the upper end. Back in December, you lost power at $390. You’ve been backing and filling since,” Craig Johnson, chief market technician at Piper Jaffray, said on CNBC’s Trading Nation. “To me, it looks like we’re going to come back down and retest the lower end of this price channel, confirm it before you can do any sort of tactical trading opportunity with these shares. I’m waiting for it to pull back and retest that level.”
“I can’t get comfortable owning it right now,” added Michael Bapis, managing director at Rockefeller Capital Management on the show. “They’re really struggling with brand definition. They don’t really know who they are. They don’t know what’s the difference between them, Ford, GM, and they’re struggling with production and delivery issues. The competition is heating up. They’re trading at per units sold to market cap of $120,000. Daimly and BMW trade at $30,000. So it’s four times any other market cap per units sold out there.”
The past few weeks have been particularly tough for the automaker. Many out there have speculated that the cash position of Tesla could be worse than expected and that the most recent $200,000 reservation price for their new “Founders Series” could be a way to drum up capital.
One company that’s bearish on Tesla, Perseid Capital, posted a potential cashflow projection of the automaker. Overall, they went on to say that there are several possibilities in the future, but most of them revolve around potential bankruptcies, missing payrolls, or a mass exodus from investors cashing out their positions and pushing Musk into a margin call.
“Of course, these are just dates that could catalyze a crisis. Tesla could run out of cash at any time or not at all. A powder keg could blow without warning. Creditors and/or the executives could force a bankruptcy tomorrow. Or Elon could really be a genius leading Tesla into the future via a paradigm of ‘creative chaos’,” wrote Perseid capital.
Only time will tell how Tesla fares in the weeks to come. Shares of the automaker dropped a further two percent today.
Tesla Company Profile
Tesla Inc is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, and Model 3 in 2017. Global deliveries in 2018 were 245,506 units. Tesla went public in 2010 and employs about 50,000 people.