Investors haven’t been big believers in Tesla the conclusive few days.
The stock is down 5 percent in the past week, and falling in serious trouble into bear market territory after renewed fears concluded the company’s Model 3 production had investors hitting the sell button. As far as the family’s future performance is concerned, it all comes down to whether the company can deal, said Boris Schlossberg, director of FX strategy at BK Asset Management.
“The car itself is so spacious that if you can just unleash it onto the populace and demand fills what it’s theoretical to fill, all of those problems will go away,” he said Wednesday on CNBC’s “Following Nation.” “So in some ways, it’s sort of the ultimate faith trade in and you have to just be a huge believer. … If you are, then it’s probably a tremendous buy here because it will recover.”
Despite the recent drop, Tesla is calm up 47 percent year to date, tracking for its best year since 2014.
But in beyond to the risks surrounding Tesla’s Model 3 production and delivery numbers, Dennis Davitt of Collect Volatility Management points to two more factors that could originator investors to lose their faith in the stock.
The first, he says, are value rates. “As rates keep climbing higher, that’s going to be a affect for Tesla,” he said on “Trading Nation.” “Tesla is very component to interest rates for all of the borrowing that they have on their owing on their balance sheet.”
The second risk could be Tesla’s new semi wares that CEO Elon Musk himself unveiled back in November. While organizes for the truck are already piling up, Davitt cautions that the semi’s battery could in fact be another Achilles’ heel for the automaker.
“If you talk to people who are in the trucking topic, the biggest problem with the semi truck is the time to recharge the batteries,” he state. “Semi trucks need to move to make money; sitting redundant for 8 or 9 hours while batteries recharge is not necessarily the most efficient use of the fine spent to buy that truck.”
Tesla recovered some of its losses on Thursday, return at around $315.30.