Your TSLA dropped to $230 on Friday. If it was great at $256 two weeks ago, it must be a real bargain now :-D
So what would drive this crazy stock higher? There are a lot of people short on the thing, so any semi believable positive hype could force those short to panic buy and that really shoots a stock up. So what is left to hype? Profits? No, they don’t have any. Sales? No, they’re minuscule. A new $5 billion dollar gigafactory? No, see how A123 systems went bust. Elon splitting the atom? No, I doubt it. So what’s left?
I would submit to you that if they want to remain in the auto business, they need to buy out a real auto maker; sooner than later. History has proven over and over again that small volume niche cars aren’t viable businesses unless they’re in the high end sports car industry.
One of the real advantages Tesla has right now is the huge pile of funny money (stock) Wall Street has afforded them due to their celebrity status. That won’t last forever. They would be foolish not to use that money to buy out some profitable businesses before their stock falls back to earth. They can’t live off hot air forever ya know.
I think Fiat/Chrysler would be a good target to try to buy since their market cap is only 13 billion and something Tesla might be able to buy out with a stock swap. Last year Fiat made over 2 billion in profit, while Tesla made nothing. But in the crazy Wall Street world, Tesla is the bigger more valuable company by 2x! If Tesla buys out a real auto company like Chrysler, Lord only knows how high this stock might go on the hype. That’s why I don’t short the high flyers.
Meanwhile I hear VW has created a Lithium Air battery with 3 times the capacity of Lithium Ion batteries. Does that make Tesla’s new $5Billon Lithium Ion gigafactory obsolete even before it’s built? Anybody can, and has, built a car with an electric motor, it’s the battery technology that has always been the problem. Does Tesla really know more about batteries than VW and everybody else?