Tesla-WTF?
What a wild ride Tesla is on.
One could make the case, in light of what is taking place the global economy, that the stock market is insane right now. If that is the case, then the situation with Tesla is absolutely asinine.
The stock jumped today, up 7.56% to close just shy of $900. This is enough to make even the most ardent bull pause.
Which brings up the question, what caused such a massive jump in the stock price?
It is often difficult to pinpoint what moves a stock other than there were more buyers than sellers. People often seek out news which, in this case, was absent.
The only thing that the talking heads could come up with is the fact that Elon Musk had a great weekend with the launch of two astronauts into space. The success of SpaceX, according to some, is bleeding over into Tesla.
Most are aware there is some cross pollination between the two companies in terms of R&D. However, that is the extent of it unless you feel that Musk being CEO is a link.
In fact, this is what many are reasoning as the cause of today's run. Elon Musk is obviously a lightning rod of a character, especially in Wall Street eyes. There are few topics he is unwilling to Tweet about and often puts his foot in his mouth. He is far from a stuffed shirt that Wall Street likes.
At the same time, he makes projects on when things will be out which tend to be overly aggressive. This also has set many of the Wall Street types on edge. They do not like missed forecasts about anything. When this happens, stocks get penalized.
It is hard to argue against any of this. Musk is certainly his own worst enemy at times.
Perhaps that is why many are feeling this weekend was a sign of things to come. SpaceX had a great deal of success which shows that Musk's leadership is solid. In fact, we have to call this what it is: a truly historic moment.
Could Elon be coming into his own? Or is it that Wall Street is finally realizing that, in spite of his antics, Musk is capable of pulling off some really big things?
Whatever the reasoning is, we are now sitting at the point where it is time for all to separate Musk from Tesla. Both the good and the bad are both window dressing; a side show that does not really tell the story.
Yes, we all agree Musk is a visionary who could pull off miraculous things for Tesla. Nevertheless, as it stands now, there is another story to tell.
The entire North American operations for Tesla, everything from cars to batteries to solar tiles, was shut down for two months. Even now, the plant in New York, where the solar tiles are made, is still idle.
On the car front, the company had its best first quarter ever. The second quarter, due to the coronavirus, will not be so kind. While estimates are all over the place, the range of deliveries appears to be between 40K-70K. Fortunately for the company, China was manufacturing during entire quarter.
I am a long term believer in Tesla and what is can accomplish. That said, it is often a sign of insanity when companies have such high prices compared to what is taking place on the ground. I understand that growth is paid for in the market but this is getting ridiculous.
For the moment, I am still holding. Until the 13 EMA crosses over the 5 EMA on a daily chart, I will remain in the stock.
It is time to be agile.
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Posted Using LeoFinance
