The Musk Of Desperation

quoth the raven's Photo
by quoth the raven
Monday, Apr 08, 2024 - 17:53

Submitted by QTR's Fringe Finance

Back in August 2022, I wrote an article called Peak Tesla, capping off, once and for all, years of skepticism I’ve had about Elon Musk and Tesla.

Since then, Tesla shares are down about 44% and being short Tesla was one of my 24 ideas for 2024. This year alone the stock is down 33.6%.

Keeping in mind that I realize short sellers have been wrongly proclaiming end days of Elon Musk and Tesla for a decade now, I still confidently feel like it is now time to be alarmed if you're a Tesla investor.

Allow me to describe what I think is a perfect storm that is, in my opinion, all but solidifying extremely rough waters ahead for both Elon Musk and Tesla.

The idea for this article was born out of the chaos that transpired last Friday when Reuters reported that Tesla was ditching its plans to build a low cost “Model 2”.

Citing what appeared to be extremely specific sources, the Reuters story alarmed the market, and Tesla shares crashed during the day, before Elon Musk rushed to Twitter with a vague rebuke, simply claiming that Reuters was “lying.”

Musk’s tweet stopped the plunge in the stock, which is what I think the obvious reason for it was. From there, Musk then doubled down check-raised Reuters by telling the world that Tesla would be revealing its long-awaited Robotaxi on August 8 of this year. So, in a roughly 12-hour span, Elon Musk used Twitter to take the negative reaction to a seemingly well-sourced article and spin it into a bevy of positive headlines that saw Tesla's stock green by the time the Friday after-hour session was closed.

Tesla investors might call this a wonderful piece of public relations by Musk. After all, he staved off disaster for shareholders and reversed the stock's direction. But, if you ask me, his reaction was very similar to many of the things he fires off publicly: it was done to benefit the stock price and likely has no factual basis in reality. Depending on how egregious of a lie it may turn out to be, that is when discussions of walking the line up to securities fraud start taking place.

For reference, the last time Musk did a reveal, here’s what he promised:

And what he delivered:

The Reuters article marks the latest of several fires Tesla is trying to put out all at once. The most recent, prior to Friday, was the company beefing its Q1 deliveries number and missing the lowest of analyst expectations, posting the first negative Q1 growth in almost half a decade.

Chart: Zero Hedge

Despite selling off on that news too, Tesla stock somehow miraculously found its way higher than where it had started prior to the bad news within one or two trading sessions. In other words, between the terrible piece of delivery news and the story on Friday, Tesla stock looks mysteriously Teflon-like.

This stock action caps off years of what I personally believe to be questionable trading in both...(READ THIS FULL ARTICLE HERE). 

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