New Developments For Tesla

During the last 2 trading days, Tesla's (TSLA) share price did not change much despite gains for major indices such as the Nasdaq 100 (QQQ) and the S&P 500 (SPYSPX). Moreover, it did not change much despite the positive sentiment for environmentally friendly technology as a result of the start of the new US administration (see also here), a massive pumping from an analyst from Oppenheimer, and positive news about the model Y in China (see here and here).

So far we have been in the "it does not matter" part of "it does not matter until it matters". My feeling is that we are slowly moving to the other part. What could be coming? On Twitter, there is increasing speculation that Musk is going to sell.

Also, there are new speculations of gross margin fraud. So far Tesla has been decreasing prices for years while keeping gross margins pretty constant. Investors find it difficult to believe that Tesla managed to do this without some temporary dents in gross margin. I agree that is indeed highly uncommon.

Other news

Again a Tesla exploded in a parking garage in China. Allegedly according to Tesla the explosion was caused by a damaged battery. Apparently, the driver had hit something with the undercarriage (a speed bump?) which damaged the battery. Sound like an inherently unsafe car to me, that can be very dangerous to innocent passers-by. Moreover, such a Tesla can ignite other cars.

Meanwhile, Teslas are being tested during Winter and the results are not good. In Winter range falls below expectations of certain drivers. See here.

Final words

My opinion on the stock is still strong sell.

Global Deep Value Stocks is a long-only newsletter. I do not publish research on stocks like Tesla in Global Deep Value Stocks. See here for an example of what I do at Global Deep Value Stocks. For more information you can take a free trial here or send me a DM.

Disclosure: I am/we are short TSLA.

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