Final Trade Detail

Tesla

Investors who followed this trade Generated a

24.3-33.3% Return

Open Date

10/29/18

Close Date

6/24/19-7/15/19

Hold Time

239-260 Days

Buy Price

334.85

Close Price

223.24-253.5

%Gain/Loss

24.3-33.3%

Original Recommendation

Tesla

Tesla (TSLA)

our opinion

sell

current price

$334.85

target price

$250

market cap

$57B

div yield

0%

  • We're skeptical of Tesla's finances. After a "blowout" quarter, it hasn't filed its 10Q yet. Without an announcement. Why? We think something's up...
  • Tesla's stock is priced for perfection. It has a scaling problem. If it wants to get on the scale and size as Ford or GM, then it's going to produce a lot more losses for investors (which leads us to our third point).
  • As Tesla continues to lose money each quarter, it's going to need to issue equity or debt to help fund operations. It's credit rating is already junk. Interest rates are rising. And stock market volatility is soaring (causing momentum stocks to get crushed). Who is raising their hand to scoop up Tesla stock or debt? We don't see many takers.

trade details

We’re not in the game of speculating corporate fraud… but we do know one thing.

There’s a lot of fishy things happening at Tesla.

Besides the “funding secured” debacle (which he said was “worth it“) and its deteriorating cash flows and finances… we now are trying to figure out why Tesla hasn’t filed its 10Q.

The 10Q is a company’s financial statements for the quarter. Companies typically release their 10Q right after their earnings release.

Tesla reported their most recent quarterly earnings October 24th. After reporting a profit for the first time in years, we have to wonder why Tesla still hasn’t released theirs… it’s been 5 days.

Now Tesla has till November 9th to file the 10Q. So it’s got time.

But after the “blowout” quarter, you think Tesla would be eager to show all the naysayers wrong (including us).

So far, this does anything but…

Our last recommendation to short Tesla made us 25.6% gains in just 52 days.

We see another opportunity for that type of gain again…

You see, Tesla’s stock has soared 34% since it’s bottom October 8th.

We haven’t seen any real, hard evidence that has changed our opinion since we first recommended shorting it back in July.

It’s really just giving us another great entry point. Short Tesla. (We’ll set our stop loss at $380 – it’s previous all time high. If it breaks out, our timing is wrong.

Speculators may want to look to buy put options. But they’re quite expensive.

The most “reasonable” put options we’ve seen is the 2020 $320 puts. They’re trading in a range of $76.50-$81.50 per option contract.

The options would be breakeven at a price of $243.5 at the option price of $76.50 – a 27% decline from today’s price.

Considering we saw the stock touch $250 October 8th, we don’t see any reason why Tesla can’t reach those lows again (we see much lower prices ahead.) Plus we have 14 months for it to play out.

The icing on the cake is basic market volatility… any bigger correction or bear market will bring Tesla down with it.