Thursday, 16 March 2017

TSLA - the cash hungry monster

Whilst the main market saw a day of moderate weakness, there was notable strength in Tesla (TSLA), which settled +2.5% at $262.05. Its truly ironic that despite asking for another billion dollars - inherently diluting existing stock, the market just doesn't care.

TSLA, daily

TSLA, monthly (linear scale)


So... as expected, Tesla is back to asking the capital markets for more money.

You could justifiably argue its to 'avoid bankruptcy', 'stay afloat'.... or merely to have 'ample liquidity'. Whatever you want to call it, Tesla is a loss making manufacturer of motor vehicles.

This is especially ironic since its customer base is unquestionably upper tier, and thus price really shouldn't matter. Why doesn't Musk think he can charge more for his elite type of vehicles, to at least breakeven?

From a pure price perspective, we have a short term floor from the $243/42s. There is clear resistance around $265 - as we also saw today.

More broadly - taking into consideration the main market (seeking sp'2600/700s by year end), a move into the $300s looks pretty easy. Indeed, there is already plenty of mainstream chatter of the 400/500s.. given another 2-3 years.

For the record, I've never traded Tesla... and probably never will. I really like the products, think the CEO is inspiring, but the shear valuation of the company is simply.... insane.

For some Tesla insanity...  pretty much.. NSFW

     waiting for the fully self-driving version in the early 2020s.