There was a damning article this morning. Here is what it says. “It appears there’s inadequate shielding on the bottom of these vehicles,” the executive director of the Center for Auto Safety told the news service. “Road debris is a known hazard to the undercarriage of vehicles.”
So in short, I am lucky to get out of TSLA yesterday as it continues to drop. Here are the possibilities for Tesla at this point.
1. There might be a formal announcement of an investigation.
2. If the investigation leads to a recall, then this can be a lot of trouble.
Net-net: There are probably investors and hedge fund guys who are calculating all the risks for bad scenario as well as worse case scenario. What are the costs for #2. I am sure someone will be doing the math. I don't have the details on tesla shielding in the bottom of the vehicles, so I got to sit this one out. This does though have the opportunity of a buy like HP in the 11's. When HP finally took the loss for Autonomy, the stock took a big tumble that day. Tesla might have a similar day. Which means buy on the drop on the news event, as smart money has probably pulled out long before that. This is all considering there is a formal investigation in the first place. If that clears up, then there is some hope. That said I do think the stock has suffered technically and so a wait and watch strategy for now is probably right. This is a momentum stock in the end and so if the momentum is over, it won't give traders what they are looking for.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment