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Tesla Motors? Bwahahah

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38

June 30, 2010 – Comments (15) | RELATED TICKERS: TSLA

Tesla Motors IPO'ed yesterday and the stock is up strongly since.

So what do I think of this? The cars are cool, but the company is a train wreck. First, they have no current production. They may have a product to sell in 2012. Secondly, the backer, Elon Musk, is pretty much bankrupt. Thirdly, no new American car manufacturer has IPO'ed and stayed in business since Ford in 1956. Fourthly, they are in a cruel business, where you have to invest huge amounts of capital and the need to amortize that over as many units as possible leads to ruinous price competition. Fifthly, there is electric car competition coming from the established manufacturers.

So am I going to short it? Not yet. This will run for a while on sentiment. CROX ran up pretty high before the crash and this could do likewise. So I will sit on the sidelines and wait for the enthusiasm to run out. Then gravity will reassert itself, and Look Out Below!

The traders may be able to make money on this on both sides if they are adept. The investors are suckers. 

15 Comments – Post Your Own

#1) On June 30, 2010 at 9:30 AM, Jimage (49.82) wrote:

Agreed - look what happened to AONE.

 The only winner here is Elon Musk's soon to be ex-wife.

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#2) On June 30, 2010 at 9:41 AM, catoismymotor (33.56) wrote:

... the company is a train wreck.

Amen. That alone should cull the speculators from the serious investors.

 

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#3) On June 30, 2010 at 10:21 AM, Gemini846 (60.44) wrote:

Just glad I didn't short it yesterday. I'm glad I didn't have to work that Syndicate.

"what have you got for me today bob"

Well mr mutual fund, I've got a steaming pile for you. Expected to be hot though, very steamy. We were expecting to move it at $14 but now it looks like $17.

"hmm, I'll take some. how long do I have to hold it".

"well 3 months at least, but you'll want to hold it for at least 2 years till they make a profit"

"2 years huh? well it's not my 401k money. drink after work today?"

.. and the pigs get slaughtered.

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#4) On June 30, 2010 at 10:35 AM, summitclark (38.54) wrote:

When does the stock become available to short? My online broker, fidelity does not show any shares available to short.

 

 

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#5) On June 30, 2010 at 10:50 AM, FleaBagger (29.71) wrote:

buy an OTM strangle?

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#6) On June 30, 2010 at 10:51 AM, FleaBagger (29.71) wrote:

Oops: no options.

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#7) On June 30, 2010 at 2:32 PM, ragedmaximus (< 20) wrote:

looks like TIMBERRRRRRRRRRRRRRRRRR high today 30 bucks at 25 now wait till next week haha hahah

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#8) On June 30, 2010 at 4:19 PM, SnowleopardNW (74.71) wrote:

The thing about the CEO being bankrupt is no longer truely.  As of the IPO he $15 million.

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#9) On June 30, 2010 at 5:06 PM, Atlasher (< 20) wrote:

I just can't support this stock right now.

 A 50k price tag is certainly more affordable than the 100k.  They'd be competing with luxury cars from say toyota, volvo, etc. as well as Lexus and BMW.  As far as the competition goes, dropping the price to 50k certainly opens up more opportunities for sales by broadening their market.

 Buuuut too many negatives working against them.  The economy is still in a recession so everyone is clinching butt cheeks to save money, even those willing to spend 50k on a car.  And I doubt they're ready to spend it on an upstart motor company with electric engines.

 I think the company is a good step forward (generally speaking), but it will go under due to the economy.  The populace just isn't ready yet to go electric.

I wonder how long their investors can prop them up.  I have faith in google, so I'm wanting to believe in this stock.  It just seems too risky.

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#10) On June 30, 2010 at 6:24 PM, blesto (32.07) wrote:

"The populace just isn't ready yet to go electric."

Oh, they're ready, Atlasher,

for the right price.

It's just that Tesla is to pricey, and probably will never reach their 20,000 a year in sales mark for making a profit.

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#11) On July 01, 2010 at 12:39 PM, TMFCHarris (99.59) wrote:

Congrats on making Top Fool!

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#12) On July 01, 2010 at 1:58 PM, ragedmaximus (< 20) wrote:

uh oh whuh happen to tesla stock price of 30 bucks looks like da battery is dying in the stock price ha ha ha ha

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#13) On July 06, 2010 at 1:11 PM, LANaturist (99.16) wrote:

The stock is down another 6.7% today, just 25 cents above it's all-time low of $17.54.

Cramer said that this would be a very short term play, not a long term investment.

 

 

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#14) On July 06, 2010 at 7:18 PM, blesto (32.07) wrote:

I made an outperform CAPS pick with a start limit @ $15.00

I think I might get it before the month is out.

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#15) On July 07, 2010 at 12:07 PM, chk999 (99.97) wrote:

 I made an outperform CAPS pick with a start limit @ $15.00 I think I might get it before the month is out.

That might work out. I expect multiple trips up and down before the final fadeout.

 

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