I was (am) a big fan of Elon -check my post a few months back on SCTY - but today’s earnings and appreciation may be a bit to heated. Anyone thinking of puchasing some puts? I expect GS’s archambault to revise his last research note but still have the stock overvalued even with the best case situation. Thoughts?
http://www.zerohedge.com/news/2013-08-07/tesla-earnings-word-cloud
Scroll down to the comments. Yeah, I’d say some people are shorting.
The market is already telling us that they don’t care about valuation for TSLA. Yes, it is somewhat concerning that the company continues to be substantially FCF negative, that order levels have not skyrocketed (at least yet), that production guidance wasn’t increased, that SG&A and R&D could increase sharply in forward quarters…but for an open-ended growth story like TSLA, the market just doesn’t care. Investors are betting that this is going to be a longer-term open-ended growth story and potential category killer (see the earlier thread on LNKD on this forum).
I’m not saying this isn’t a short, but I’d rather wait for an inflection point and see some evidence of turnover in the shareholder base and have management prove itself wrong first, than to try to jump the gun on a short bet. Valuation is essentially irrelevant here, and trying to be the first to short is like picking up pennies in front of a steamroller. I’m sure there are both buy-side and sell-side analysts that were short at $50, $80, $100, $130, or whatever price in recent memory that have plenty of war stories to share.
Its the iPhone of the automotive industry. Love the product/founder/company but will stay far away from the stock.
We are on the brink of a massive disruption in the auto industry and he is leading the charge.
The only problem with these plays are when the catalyst for a reversal can be lengthly and thus rendering options obsolete. I was killed when i picked up some puts on CMG when i thought it was a bit overpriced and they expired otm and a few weeks later the poker player himself states his position and the thing tanks.
^ That’s not the “only” problem, but it’s certainly one of them and a big one at that. One other catalyst for the stock to continue to go up? Analyst upgrades. Some of the new price targets as of today and the basis for valuation are bordering on the absurd, but the stock will still go higher as a result.
These types of stocks can continue to go up too based on momentum, upgrades, other surprises. Think like Amazon or Netflix. I wouldn’t be getting long or short right now. If I owned stock, I might sell but knowing me I would have probably already bailed and kicked myself for getting out too soon.
Like numi says, the valuations are insane. The WSJ had a piece yesterday titled “When is BMW worth $725 billion? When you value it like Tesla”
TSL is up 10%, a few traders entering the wrong ticker?
^ LOL