Below is a note from Hedgeye CEO Keith McCullough on why we're adding Tesla (TSLA) back to the short side of Investing Ideas:
"Our Managing Director of Industrials Research, Jay Van Sciver, remains The Bear (i.e. the only one in Research Print without a loss, yet!) on Tesla (TSLA) and wrote this recently to our Institutional Subscribers:
|
"Given that the Model 3 may prove a ‘make-or-break’ product launch, it is odd that Tesla is focused on pretty much everything else. Tesla has not sold a single Model 3; there isn’t a public production model. But we received guidance this morning that production could ramp from 30 units in July, to 1,500 by September, to maybe 20,000 Model 3s by December. That is apparently a very different schedule from what was asked of suppliers. It seems pretty clear production is behind relative to initial goals. If supplier deliveries are made as below, Tesla would have inventoried parts for an extra 21,000 vehicles sitting around by quarter end on the announced production schedule. “So when we place parts orders with our suppliers, we've told them 1,000 a week in July, 2,000 a week in August, and 4,000 a week in September. These are parts orders.” – Elon Musk 2/22/17 Exponentially higher demand at lower price points and the cost benefits of mass production used to be core to the Tesla story. Is that story failing? Both the hard and soft indicators suggest it is." |
* * * *
Click here to read Van Sciver's Investing Ideas stock report on Tesla.
