Tesla is announcing earnings Wednesday after the market closes. Currently, it is down a bit after its 13% jump following the announcement of their new electric vehicle.
The bottom line for me is that they have sold almost a half-million of this new car since then and they have not even started production yet. Each of those people paid $1k to reserve their Tesla, meaning they were handed a half-billion dollars in cash by people who intend to buy a Tesla once they come out.
I think the earnings report will be very good. If it starts low for its recent range on Monday, I would say this is a very good time to buy and hold until a day or two after the earnings report.
Let’s see how it goes!
On the first of last month, I bet Tesla would go up 5% after the Model 3 unveil. It ended up going up from $237 to $265, 11.8%!
It is now back down to $238.
We know several key things about their earnings announcement Wednesday;
- Tesla sold over 400,000 preorders of the Model 3 at $1,000 each, effectively handing them $400m in cash for cars that have not even started production yet.
- Sales of existing vehicles are up over 50% from last year.
It’s going to be an exciting Wednesday for Tesla. I would probably wait until we get closer to Wednesday to buy, as the stock is trending down for the last few days.
Yesterday, Tesla confirmed rumors of higher battery size options wich increase the price of some of their existing models. This morning, the stock is trading at $228, at the bottom of its 5-day range.
I would buy now if I was ready to start trading for real, and set a goal of +5%/-2.5%, but not sell until tomorrow, after the earnings report comes out.
Let’s see how it goes!
At around 10am this morning, this trade would have hit the stop-loss and sold down 2.5%. Unfortunately, though the news was all good and all better than expectations, the majority of analysis seemed to report that the stock was over-valued.
One report said that Tesla was valued at over $600k per car sold that year, where GM is valued at under $4k per car sold last year, and that this means Tesla is over-valued despite the obvious and dramatic long-term differences between the two companies.
Even though the long-term prospects had greatly increased and the short-term prospects had beaten expectations, the market decided the stock was over-valued.
I still think that when this correction ends, it will be a good time to buy long.
This is my first loss during this learning journey. I will play it safer on the next trade!