I think I'll buy a little Tesla today, but no, I'm not crazy


First came Tesla (TSLA) cutting 9% of its workforce in June. Then came SpaceX announcing a reduction of 10% of the workers of that firm. On Friday morning, Tesla returned for the second round. An additional 7% of Tesla's full-time staff would be fired. Are you okay, Elon?

The basic fact, from what I can see, and certainly I can be wrong in Tesla … is that the average sales price for the famous or infamous Model 3 for the company's profitable third quarter was approximately $ 59K. Elon Musk has long expressed the intention to make this electric vehicle affordable for the mbades by something like $ 35K. Achieving this goal and making money seem to be different objectives. Federal tax credits for value reduction for electric vehicle buyers are now in the phasing-out phase for Tesla, and actually represent an unwanted price increase.

What this means is that for consumers interested in buying a Model 3, a vehicle that starts at the low end at $ 44K, by the way, will only receive help at $ 1,875 after July 1. Last year that consumer would have received a $ 7,500 credit. That's a stealth increase of almost six thousand. The aggressive reduction of expenses seems to be the only way out for a company that intends to deliver this vehicle internationally at the end of this quarter.

"The road ahead is very difficult"

That's what Elon Musk said this morning, and the equity markets have not wasted time turning the firm on early Friday. Musk acknowledged that the company had been profitable, but less in the fourth quarter than it had been in the third quarter that surprised the world. What does a merchant do? My first instinct is to abbreviate the name. It is true that I have accumulated a negative bias towards Tesla over time. This is something that every trader and investor should create awareness for. Like sports teams, we are attracted to certain brands and away from others. To be truly mercenary in nature, which is a requirement of the merchant, each of us must be aware of our strengths, our weaknesses and, unfortunately, any prejudice, as they are always personal responsibilities.

I know, but a discount matched with the likelihood of positive headlines next week with respect to commercial relations between the United States and the Child, that would cause an algorithmic response. It is likely that I lower my toe in small. Yes, I think your old friend Sarge will buy a little Tesla today, but no, I'm not crazy. We are talking about entry-level size. There is not enough exposure to ruin a trading session that would otherwise be nice. I'll wait for the publication to act.


Entry: On or near the last sale of $ 315

Goal: $ 345

Add: no

Panic: $ 297

Receive an email alert every time I write an article for Real Money. Click on "+ Follow" next to my sentence for this article.

Source link