Shorting a stock means youre betting it goes down. (See full description HERE).
You probably know by now that we dont make individual recommendations of stocks. We do, however like to point out how certain situations present opportunities for those with ears to hear.
So, regarding Tesla, its worth looking at some signs that its due for a fall. A very big fall.
Lets look at some facts:
Tesla has never earned a profit.
Tesla needs to raise anywhere from $5 to $8 Billion to stay solvent in the next 14 months.
On April 1st After teasing important news to come, CEO Elon Musk tweeted: Tesla has gone completely and totally bankrupt. So bankrupt, you can’t believe it.
So far, its not looking good when your CEO openly jokes about being bankrupt.
Tesla claims that their production will rise to 5000 Model 3s per week. So far, its a no go. Model 3 is supposed to make a profit of $35,000 on a car that costs $50,000.
Thats hard to believe when you see that last year they lost $20,000 per car in their S and X Models (both sold for roughly $100,000).
Ask anyone with experience in the auto business and theyll tell you profit margins are far higher on bigger, more expensive cars. Therefore, the faster Tesla makes Model 3s, the more money they will lose.
Up till now, Teslas done a great job drawing down lines of credit to finance their losses and increase manufacturing. However, regulated lenders and suppliers eventually want to see profits.
They know that in a game of financial musical chairs, its important to sit down quickly.
Teslas not alone, but whos next?
Find out (HERE).
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