TSLA: Good Short Entry

2014년 10월 7일

The release of pending news on October 9th has the stock rebounding, but it is stalling at a broken trend line where I think we will see it sell off after the news release back down to a minimum of the $220 range. Buying at theses prices seems illogical given the market cap and fact that they are not a profitable company if you remove the selling of emission credits. They have continued to issue convertible debt at historic low interest rates to boost the balance sheet, but that is also why you see price targets near the conversion price on that debt by the same underwriting institutions. The company is burning through cash and is eventually going to have to re-pay that debt (remember they make no money) unless the stock price soars above the mid 300s which I can't see happening. Given the high valuation and where the market currently sits, this is ripe for a correction as some of the momentum names are the last to start selling off in underlying market weakness.