https://www.marketwatch.com/story/tesla-is-just-months-away-from-a-total-collapse-says-hedge-fund-manager-2018-03-27 Is this right? Bankruptcy that soon? I mean, its INSANE with its valuation. Seems shorting this thing SHOULD be the safest game in town, given that it should go to zero pretty quick. I would think. But no idea if the end is really this near. Thanks!
Considering their burn rate which will never turn around, they are wholly dependent upon new capital funding. If their equity and credit prices keep crashing, it will be bankrupt unless someone white knights them.
I think this is so funny...See below!! You can total a Tesla by using a one foot long sludge hammer and 5-10 seconds (hit in the right place). Totaled!! I will say again...TOTALED...5 seconds!!!! Someone could do $20,000,000. worth of damage in a lot full of Tesla cars before security could get to them...5 to 10 minutes total. Just saying...See below.
Someone made that very bet as they bought, the $50 Jan puts, for $283K to make $5M. That being said, as of February earnings they had $3.5B in the bank and burned through $227M with CAPEX at $750M. So even if their burn rate went to $1B, per quarter, they still have till, the end of the year. They could use that Giga factory as collateral or do a secondary when it inevitably gets back to $340-$380 again. Or Elon kicks in some assets...guy has risked it all before. Some institutional investors have 10yr time frames on it. Bankruptcy while a possibility isn't a concern till 2019 IMO. For me it's just a trading vehicle with calls or call spreads as I sold my June $300-$330 call spreads on Thursday at $299+. Would have kept if this market wasn't so bi-polar to where it's just scalps.
Think Valeant. Tech stocks can go years and years without profits, I’m not exactly sure how you classify TSLA even though analysts like to put it in certain categories. It’s like Microsoft in the 90’s, they wanted to take over everything. Would I short it now? Probably, but it isn’t based on any business plan the company puts out. They certainly have an edge in many categories, but what is behind it when banks aren’t lending? There are very few products currently available that will give you an above alpha return in the next three years.
Should we go into a severe economic downturn, TSLA sales will tank and their sources of funding will dry up. Their cash burn rate would go up dramatically and TSLA could crash very quickly once general perception of an serious economic downturn takes hold.
i would be buying TSLA right now lawlz I look at the chart, and all I see is nothing but a buy signal despite the news. In fact some investors have already gotten in last week. Only thing scary about buying TSLA right is if the equity indexes turn down, if TSLA will hold this support level or not.
Musk cut too many corners trying to go electric without passing through the hybrid stage, Batteries are just not up to the task YET.
Elon, will just right out a personal cheque or 2 and fund TSLA until profitable. Never bet against this guy, this might fail, but he's pretty much the future in so many ways, cause he's got the balls to try, rather than play it safe!!
The thing is, the article could have been written 2 years and 2 money raises ago. Tesla was already structurally bankrupt back then, yet the stock doubled. Superstar is right in post#4, they still have some options left, although their choices are narrowing. As long as the stock is around $300, they can dilute it easily. Now if the suppliers get pissy and start to demand COD, that could be a big problem. But the cult is still strong with this one. Sell call spreads instead of buying puts. I like to read Tesla articles on SA, but fundamental analyses is shit without guessing the stock price right. With my Iron Condor thread on TSLA I have been right on price for 9+ months.