Tesla (TSLA) Stock: Is Now The Time To Short?

Tesla Inc TSLA Stock NewsTesla Inc (NASDAQ: TSLA) is a company that has been marred with issues as of late. In fact, things are getting tough enough that investors are starting to lose faith while Steve Eisman, the money manager who famously predicted the collapse of subprime mortgages before the 2008 crisis announced that he is shorting the stock. So, is now really the time to short?

TSLA Is Beaten And Bruised

There’s no doubt that Tesla is havinga  hard time as of late. The company took forever to reach it’s goal of producing 5,000 model 3 vehicles per week as issue after issue started to arise. Then, shortly after announcing that it had finally reached it’s production goals, news broke that the company was reaching out to its suppliers asking for refunds of money paid since 2016.

In the letter that Elon Musk sent to some of the company’s suppliers, the CEO of TSLA asked for a refund stating that it would help the company to reach proitability. Of course, this would further strengthen the cmpany’s foundation, which would be a positive for not only the company, but its suppliers. However, questions are being raised with regard to cash flow issues. After all, if the issue wasn’t about cash flow, the company would be asking for a discount on future transactions to help it achieve profitability.

At the end of the day, Musk and his team have had a problem executing on plans, and that seems to be hitting their pockets hard. Eisman recently said it best, offering the following:

Elon Musk is a very, very smart man, but there are a lot of smart people in this world and you’ve got to execute. He’s got execution problems… He’s nowhere in autonomous driving, as far as I can tell, and big competition is coming in his space next year.

Is There Something To The Short Idea?

I believe that Eisman is onto something here. As soon as I saw that TSLA was asking its suppliers for refunds, I became concerned about the stock. While I wouldn’t go as far as counting Elon Musk out, I would go as far as to say that at the moment, Tesla is beaten and bruised. If the company doesn’t start to execute, things aren’t going to go well.

Never Miss The News Again

Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!

Subscribe Today!
* indicates required

Add Comment