Tesla Update
Tesla keeps tumbling down the chute, to our great amusement and enrichment.
It "should" continue to do so, and in the longer term we are completely confident that it will, however this Tuesday the federal judge's decision on Elon Musk's flagrant contempt looms - see recent news items posted here - and if the powers that be once again go shamefully easy on this CEO then the stock could rocket higher in the very short term.
If so, we will add to our existing short positions.
The fundamental reasons for being short Tesla are nearly endless. Simply, it is as compelling a fundamental short as we've seen since late 1999.
As we've stated emphatically many times in this blog in recent months, we see Tesla as a generational shorting opportunity above or near $300.
Three months ago, on December 17, we posted this graphic with the caption "A typical Tesla owner (car or stock):"
That was just two days after what we now know was a major high, and since then, despite major stock indexes enjoying one of biggest multi-month melt-ups in history, Tesla has collapsed 25% while the prices of their new & used cars along with overall demand for the brand have also cratered.
"Only" customer dissatisfaction & complaints, service waits, and costs have gone up - way up - along with layoffs, executive defections, and store closures while there's increasing and far superior competition in the electric vehicle space at much better pricing from automotive brands known for quality products and service.
Ultimately we always defer to sentiment and technicals.
There's no question that public and media sentiment has staged a palpable turn downward in recent months. Even some of the most gullible and shameless touts among the flock of Tesla True Believers have begun to openly question the ridiculous and highly ambitious bull narrative along with the constant "misstatements", reversals and bizarre antics of lemming-master Mr. Musk.
Here's the chart (click to view a larger version):
1. Long-term up trend likely soon to be broken and never regained.
2. Parallel line coincidentally marking long-term tops.
3. Major and enduring upside resistance.
The orange ovals indicate multiple touch points of the respective lines.
Note considerable historic support in the $250 range per the tops in 2014, 2015 and 2016, and the big bounces in 2018.
The rest is self-evident and, we firmly believe only a matter of time. Probably not a long time, nor a good time for those who stubbornly and imprudently refuse to see the facts or those who have been making insanely bullish price proclamations.
The inset pic at bottom of the chart is not a fabrication, it is in fact CEO Musk's idea of an April Fools' joke almost exactly a year ago. With that in mind, its worth reconsidering this post from 4 months ago.
We marvel at his curious sense of "humor".
Elon Musk: Tesla nearly went bankrupt
"As soon as a CEO says 'I'm not sure if we'll survive', you're dead." -Elon Musk speaking of Solyndra, the taxpayer-funded fraud that previously occupied Tesla's Fremont factory.
Given the massive taxpayer subsidies Tesla was built and has thrived upon, that may prove to be a quote of exceptionally fine irony in the fullness of time.
No one can say there weren't very obvious, strident warnings and massive flapping red flags however losers will only blame the bears and short-sellers, as losers always do blame others for their own mistakes. Perhaps worse they will fail to learn from their mistakes, as losers always do.
It "should" continue to do so, and in the longer term we are completely confident that it will, however this Tuesday the federal judge's decision on Elon Musk's flagrant contempt looms - see recent news items posted here - and if the powers that be once again go shamefully easy on this CEO then the stock could rocket higher in the very short term.
If so, we will add to our existing short positions.
The fundamental reasons for being short Tesla are nearly endless. Simply, it is as compelling a fundamental short as we've seen since late 1999.
As we've stated emphatically many times in this blog in recent months, we see Tesla as a generational shorting opportunity above or near $300.
Three months ago, on December 17, we posted this graphic with the caption "A typical Tesla owner (car or stock):"
That was just two days after what we now know was a major high, and since then, despite major stock indexes enjoying one of biggest multi-month melt-ups in history, Tesla has collapsed 25% while the prices of their new & used cars along with overall demand for the brand have also cratered.
"Only" customer dissatisfaction & complaints, service waits, and costs have gone up - way up - along with layoffs, executive defections, and store closures while there's increasing and far superior competition in the electric vehicle space at much better pricing from automotive brands known for quality products and service.
Ultimately we always defer to sentiment and technicals.
There's no question that public and media sentiment has staged a palpable turn downward in recent months. Even some of the most gullible and shameless touts among the flock of Tesla True Believers have begun to openly question the ridiculous and highly ambitious bull narrative along with the constant "misstatements", reversals and bizarre antics of lemming-master Mr. Musk.
Here's the chart (click to view a larger version):
1. Long-term up trend likely soon to be broken and never regained.
2. Parallel line coincidentally marking long-term tops.
3. Major and enduring upside resistance.
The orange ovals indicate multiple touch points of the respective lines.
Note considerable historic support in the $250 range per the tops in 2014, 2015 and 2016, and the big bounces in 2018.
The rest is self-evident and, we firmly believe only a matter of time. Probably not a long time, nor a good time for those who stubbornly and imprudently refuse to see the facts or those who have been making insanely bullish price proclamations.
The inset pic at bottom of the chart is not a fabrication, it is in fact CEO Musk's idea of an April Fools' joke almost exactly a year ago. With that in mind, its worth reconsidering this post from 4 months ago.
We marvel at his curious sense of "humor".
Elon Musk: Tesla nearly went bankrupt
"As soon as a CEO says 'I'm not sure if we'll survive', you're dead." -Elon Musk speaking of Solyndra, the taxpayer-funded fraud that previously occupied Tesla's Fremont factory.
Given the massive taxpayer subsidies Tesla was built and has thrived upon, that may prove to be a quote of exceptionally fine irony in the fullness of time.
No one can say there weren't very obvious, strident warnings and massive flapping red flags however losers will only blame the bears and short-sellers, as losers always do blame others for their own mistakes. Perhaps worse they will fail to learn from their mistakes, as losers always do.
Click here for the source for the excerpt above.
It is a service to society to sell wilfully ignorant sheep shares they eagerly demand in hyper-overvalued crap companies at high prices then, perhaps, eventually offer the arguably totally undeserved mercy of buying back said shares at far, far lower prices when they are clamoring for cash to satisfy margin calls.
Indeed, Musk himself may soon be in that very margin call situation.
CNBC: Elon Musk touted a lenient return policy for Tesla, but history suggests customers should read the fine print
New York Times: Tesla Sales Slump Hinted At in State Data
This victim suffers the common issue of water leaking into the Tesla trunk, having had it "repaired" twice already. It still leaks:
Such stories are legion, as we've documented many times before. When owning a Tesla often starts off like the following account, what else could you reasonably expect?
Tesla Motors Club: Tesla Delivery Nightmare
"Signing papers on the kid's back since we didn't even have a table..."
Imagine having so little self-respect as to risk buying a Telsa at this point, much less to go through with the purchase in that fashion?
We remain double-short Tesla, believing it to be a generational shorting opportunity above or near $300.
posted by C. Guinness @ 4:27 PM
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