Wednesday, March 2, 2016

Something's Off about Citron's Shorting of $TSLA

I saw lots of buzz around this tweet yesterday:

After watching $TSLA stock go up for the last couple of weeks, it suddenly had a downturn yesterday. Well, not significant enough to cause any panic, but it did go down. And it returned back on the upswing again today. So much for trying to influence the market, Citron. One day of slight-but-not-so-much panic.

The thing is, Citron seems to be betting their short stocks on the fact that Tesla has had a problem supplying their demand in the past. I mean, it's possible that Tesla Motors may have some delays initially filling orders for the Model III when it comes time to ship (a lot is riding on their new gigawatt factories), and it wouldn't surprise me if there was a delay. But that's looking beyond this year.

While the Model III continues in development for now, this year, Tesla factories are focused on pumping out more Model S's and X's, and is increasing their output. Their aim is to once again double their production in the coming year. But even if they fall slightly short of that goal, there's no doubt that they WILL grow. The issue of the falcon doors on the Model X seem to settled now that they have gone with a different supplier. And the X's have started to show up at the buyers' doors. Whatever supply problem they had, they seemed to have weathered most of that storm and are back on track.

As for the Model III, there's no demand to fill yet. They don't go into production until late 2017, far after Citron's projection of a minus-$100 loss on each share. Maybe Citron's projection has merit for next year. But for this year, they are blowing their whistle way, WAY too early. I think they will be in for a big surprise.

I think Tesla stock owners know there'll be a ramp up in price leading to the Model III unveiling on March 31st. If Citron's trying to kill, or at least dampen, that upward trend, they are going to be in a losing battle this month. While $TSLA stock prices might go through a bit of a roller coaster after the announcement, I expect it to equalize shortly thereafter and return to its course upward.

Stock trading is a game, and we're trying to figure out who is reading it right. I'm not convinced yet that Citron has got it right. But what do I know, right? It's not like I'm an experienced trader. I'm just trying to do my homework and rooting for Tesla Motors to make a difference. So good luck, Citron. But for the sake of the future of sustainable transport, I hope it's not good...

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