Yes, I got killed on my Tesla short play.  I assumed that when they released horrifically bad results, the stock would tank.  I assumed that repeated customer complaints about crappy car quality would cause the stock to tank.

Apparently not.

All it took was a tweet from Elon Musk to “confirm” that financing was confirmed to take the company private at $420 per share.

Yup.  “Funding secured”.

Of course this is a lie.  Investor support comes in the form of cash.  What investor group has $70 billion to complete the largest “go private” transaction in corporate history?

None, apparently.  “All it takes is a shareholder vote” is a lie.  What you really need is $70 billion to buy a company that can’t make cars, and can’t make money.

It ain’t happening, folks.

But, as I have said before, imminent and inevitable are not the same, so this scam could continue for many more weeks or months.

Time will tell.

See you next week.

 

A Bad Week to be Short

by JDH on August 4, 2018

Well, that did not play out as expected.

Last week I was blathering on about how it was a good week to be short, because Facebook’s stock crashed, and Tesla’s was going down.  I don’t short Tesla, but I bought puts, which were a great speculation two weeks ago, but a horrible disaster this week.

As you know, Tesla announced horrible results.  Lower profit, massively negative cash flow, etc.  Every financial statement number was horrible.

But, on the analyst’s conference call, instead of Elon Musk yelling at the analysts like he did last quarter, this time he apologized, kept his mouth shut, and therefore in contrast appeared to be completely normal.  Even better, he said “we have no plans to raise capital”, and “we are going to spend a billion dollars on a factory in China”!

Yup, he can’t pay his suppliers, he’s reducing CAPEX, and yet he will somehow be able to borrow a billion dollars to build a factory in China.

Not a tent.  An actual factory.

So investors said “great, he’s not crazy, and he’s building a new factory, which is growth, so that’s great, let’s bid the stock up”!

And they did.

By 50 bucks.

Tesla had a slight pullback on Friday, down just over a dollar, but it was a big spike on the week.

And, depending on how you want to draw your downtrend lines, it would appear that the downtrend line started in June was broken.

So it’s all good, right?

Yeah, no.

It is quite possible that the good feelings of this past week will propel Tesla to $400.  It would not surprise me at all.

They could keep building cars in tents and have a not horrible third quarter.

Could happen.

But you can’t continue losing money forever.  That’s not a strategy.  That’s not a plan.

So, I will take my lumps and live to fight another day.  As I said last week, I’m not betting big bucks on this.

Gold, on the other hand, appears to be perking up, so that will be our discussion topic next week.

Until then, thanks for reading.

A Good Week to be Short

July 28, 2018

I’m not a short seller.  I’m an optimist, and being a short seller implies that you are a pessimist.  It’s bad karma.  I prefer to take an optimistic approach. Also, the most you can make shorting a stock, un-leveraged, is 100%.  If you short a stock at $100 and it goes to zero, you made […]

Read the full article →

Still Short on Tesla

July 21, 2018

Tesla has settled in the $313 range, ahead of the quarterly earnings report due at the beginning of August.  I assume the bulls will be able to find something positive in the earnings report, given that they built a tent and built a lot of cars in the last week of the quarter. But, there […]

Read the full article →

The Cash Accumulation Phase Begins

July 14, 2018

We are in the dog days of summer.  The weather is hot.  Everyone is on vacation.  Nothing much is happening. As I have previously predicted, TSLA – Tesla Inc. will eventually go bankrupt, but it hasn’t happened yet.  The next quarterly earnings announcement will be around August 1, so presumably we will get more insight […]

Read the full article →

Like I said last week…

July 7, 2018

Last week I said to buy gold and short Tesla.  That was good advice.  You’re welcome. I bought some Tesla puts on Monday, sold them on Tuesday (at a profit), and then took another position on Friday.  It’s not a big position, but enough for fun.  I bought the $300 strike price, expiring in September. […]

Read the full article →

Buy Gold and Short Tesla

June 30, 2018

It’s a long weekend here in Canada, and the weather is very hot, so since you don’t want to waste your time in front of a computer screen, I’ll be brief. The panic selling in gold appears to be over (for now), so on Friday I began to accumulate a small position in NUGT – […]

Read the full article →

Gold and Tesla are Going to Pot

June 23, 2018

Gold The two month carnage in gold continues.  From the quadruple top resistance level of around $1,360, gold has collapsed, and the next two stops appear to be $1,240 and $1,200. This is not a pretty picture. Why is this happening? I don’t know.  Could be the USD dollar, could be better places to put […]

Read the full article →

The Last Pop for Pot?

June 16, 2018

Bill C-45 will eventually become the Cannabis Act.  It was passed by the House of Commons (thanks to a Liberal majority government), and last week it was passed by the Senate, but with amendments.  The Liberals don’t like some of the amendments, so they have accepted some of the proposed amendments, rejected others and sent it […]

Read the full article →

1 Out of 3 Ain’t Bad

June 9, 2018

Two weeks ago I made this prediction: Gold $1,400 by Canada Day. I could still be correct.  All we need is a $100 move in three weeks and I’ll be a genius, but it’s not looking like a great prediction at the moment. Obviously I’m long on gold, and as I said one month ago, […]

Read the full article →