Will TESLA Price Falls Further If It Fails To Deliver AD?
I think US market fall from grace on Thu, 20 Apr 2023 was a combination of several factors played out over the course of this week (Apr 17 - 21).
What Are They ?
(1) Mixed earnings reported by Wall Street corporates.
Bank stocks did not report “flawless” results that Wall Street was hoping for. Except for $JPMorgan Chase(JPM)$ the other Top 10 banks earnings were a mixed bag. US regional banks fared none the better.
Semiconductor stocks have not fully reported yet. Again hit and miss by individual companies. $Taiwan Semiconductor Manufacturing(TSM)$ reported -18.7% decline in revenue. Will competitors (Nvidia, AMD, Intel etc…) suffer the same fate soon ? To be seen soon !
More celebration or desperation earnings results ahead ? To be seen !
(2) Fed Governors’ Negative Harbingers At Work
With the “blackout” period set to be “active” from Sat, 22 Apr onwards for the next 13 days, FOMC members have hit the grounds socialising as much as possible.
What Have They Said So Far :
Loretta Mester. Central bank still has more interest rate hikes ahead of it, with the policy rate climbing over 5%.
Michelle Bowman. Central bank is focused on bringing down inflation to support a growing economy and climbing incomes. The “tight” labor market made it difficult for growing businesses to find workers.
Lorie Logan. Assessing whether Fed has made enough progress to combat inflation. Searching for further & sustained measures of improvement.
Raphael Bostic. Agrees with raising rates one more time before holding them above 5% for a while to reach the Fed's goal on inflation.
James Bullard. Struck a similar hawkish tone that rate hikes will need to continue.
When US market gets hammered by central bank’s agents “negativity” on a daily basis, the disillusion begins to set in and takes effect !
(3) Oil Prices / Stocks Are Falling.
With an impending view of a soon-to-be “recession” hitting the US market soon, this has negatively impacted oil stock (prices).
This is because it’s deemed that there will be a fall in demand for oil when US economy languishes during the recessionary period.
(4) Tech Giant Continual Layoffs
Meta. 3 rounds of retrenchments exercised - Nov 2022, Mar 2023 and Apr 2023.
Amazon. 3 rounds of retrenchments exercised - Nov 2022, Mar 2023 and Apr 2023.
Google. 2/3 rounds of retrenchments exercised - Sep 2022, Jan 2023 and maybe Apr 2023.
Microsoft. 3 rounds of retrenchments exercised - Nov 2022, Jan 2023 and Feb 2023
These massive layoffs have generated a “negative” effect on both society and US market; affecting the workers and US stock market directly.
During Tesla’s Q1 2023 earnings report conference, mr musk has once again talked about achieving Full autonomous driving (AD) by end 2023.
Even the writer of above post is skeptical about that. Afterall who could blame him when the whole idea of AD was mooted by mr musk so long ago that its supposed everyone has forgotten about the origin.
Not me - ha ha. You can find out the details dating back to 2015 here ! Click to read the juicy details.
Even mr musk promise of delivery seemed “unsure” (refer to quotation below) - if you asked me.
"For those that are using the FSD beta, I think you can see the improvements are really quite dramatic. There’ll be a little bit of two steps forward, one step back between releases for those trying the beta. But the trend is very clearly towards full self-driving, towards full autonomy. And I hesitate to say this, but I think we’ll do it this year." Tesla, CEO, elon musk..
.
Suffice to say, I think his fans have been worn thin by the empty promise that has stretched for 7 years in the running.
With its stock price falling almost -10% yesterday (coming off a weaker than wall street expected results) is this Mr musk’s delay tactics to further stem Tesla stock price from falling further in the interim ?
Come Dec 2023, if AD still does not become a reality, he will deal with it again then.
He has managed to get away scot-free for so long, he should be able to pull off another fast one by end year - right. LOL !
Having said that, will Tesla stock price falls further come end 2023 if AD is nowhere insight ? I say count on stock price falling; just to be “safe”.
Do you think Tesla will be able to meet its AD obligation by end Dec 2023 ?
Do you think Tesla stock price will fall if it fails to deliver AD by year end ?
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Low price is attracting new buyers. Not pumping, its valuation.
TSLA's current PE is about 46. Still way too rich for a car company.
It’s hard to say but I will definitely buy some shares when it’s around 150.