Wow.Talk of a parabolic explosive move.A 110% gain year to date and 50% appreciation in just the last 2 days of trading.This is NUTS!!

No doubt Tesla is by far the world leader in Electric Vehicles (EV) market and their cars are superb with a cult following among Tesla car buyers and also the mythical cult of personality of Elon Musk promising a bright future of innovation.Its the cult of Musk and EV innovation that's driving the stock ever higher.

Despite this,Tesla has relatively crappy financials earning just 386 million in Q4 2019.Sure earnings per share was a beat with earnings per share of 2.14 USD vs 1.72 USD expected and revenue of 7.38 billion USD vs 7.02 USD and finally they have some positive free cash flow (FCF) after suffering years of negative FCF.They also raise lots of capital via issuing junk debt and the US junk debt market has already started to rollover.The investors who are short the stock believe the financials are cooked up in a fraudulent manner to juice up the stock and not forgetting Musk fraudulent shenanigans of "funding secured" tweet last year to pump up the stock where he was nearly forced out as CEO and paid a 20 million USD fine for misleading investors

Tesla is probably the most emotive stock in the US stock market with bulls riding on the Musk myth and bears looking at the possibly fraudulent financials and this stock is the most shorted equity in the US equity market but the shorts have been crushed by the epic upward move.Much of the recent epic rally has been fueled by shorts being squeezed and forced to cover as they lost billions.Once the next US recession hits and the junk bond debt unravels,Tesla may not survive this.Also other car manufacturers with better financials are entering the EV market so Tesla may face stiff competition in future.

Also not forgetting that Tesla epic rise plus the unprecedented general US equity market rise hitting all time highs almost daily is fueled by unparalleled Fed liquidity injections to the tune of over 1 trillion USD in new money every week in overnight and term repurchase agreements plus 60 billion/month in short term treasury purchases to stem a liquidity crunch in the financial system most likely due to some overleveraged hedge funds finding themselves in distress.This represents the largest money printing binge by the US central bank in history and the money just pumps the stock bubble to levels greater than the dot-com bubble that crashed in tears.Any sell off in the markets are mitigated by the infamous "Plunge Protection Team" (PPT) who use the Fed injection money to buy back declining stocks.Last Friday the US market sold off steeply due to corona virus fears but the PPT stepped in on Monday and yesterday buying stocks reviving the markets again.Even China that's reeling from coronavirus had its stock market open down 9% on Monday but the Chinese central bank Peoples Bank of China (PBOC) has injected 250 billion USD equivalent of new yuan in the last 2 days and the Shanghai Index has recovered from some of its losses.

Tesla is a horrendously volatile stock.Despite its epic rally,it also suffers steep sell offs.Yesterday just before US market close,the stock plunged 100 USD on strong volume in the last 10 minutes of trade so caution is advised.Its grossly overbought but still can go much higher

Tesla now sinking like a rock.From an intraday high of 968 USD yesterday,now its trading at 765 USD.The volatility is insane.Lets see if the shorts and sellers carry the day.One shouldn't be surprised to see it bounce back and hit 1,000 USD but lets see how it plays out.

Those who follow US markets are used to these tulip mania madness.One just has to recall a stock called Tilray that was trading at 23 USD on 1st August 2018 only to explode to 300 USD on 19th September 2018 then completely collapse and currently trades at 17 USD.

Not forgetting marijuana stocks that explode in many multiples then immediately implode.

The Tesla stock already stabilized in the $700s range and it is still up by 75% YTD. No pump and dumping here. I would buy it any day

Well it seems a billionaire fund manager called Ron Baron is the one who pumped up the stock.Insider big money investors who knew he was about to appear on CNBC Squawk Box to praise the firm bought the equity massively to frontrun the stock before he appeared.When he finally appeared on CNBC and heaped praise on the stock,it went parabolic then of course the market became too frothy and these money managers who bought before Ron appeared started to sell late Tuesday and massively on Wednesday raking super profits and the short sellers also dived in to get their steak in the slaughterhouse.Its almost obvious that some of the fund managers and wall street banks that bought the stock on Monday and early Tuesday were the same ones shorting yesterday and the retail investor got destroyed chasing the stock

Check out the following 2 videos

https://www.youtube.com/watch?v=R5QJlTMADGQ

https://www.youtube.com/watch?v=j7P_2DWIQKQ

You got to love WALL STREET .The investment firms quietly take a position in the market,go to media houses to pump up the stock then sell to the converts who chased the stock upwards and same investment firms now short to the downside.

Probably.Who knows Tesla could be 2,000 USD in the next few months.I have seen an analyst predicting 15,000 USD by 2024. .I would probably wait for the froth to deflate and catch it at a much lower price.Personally I wouldn't buy the stock as its too emotive with fanatical bulls and bears at each others throats thus the volatility hence impossible to predict the trajectory.The fact its the most heavily shorted stock in the US equity market could make me nervous going long.There are better more stable stocks with predictable trajectories.Even scalping some day trades is a challenge considering the volatility but there are some expert scalpers using leverage to make fantastic profits both on the long and short side

I bought 10 shares in this at $228 last year and didn't think anything would come of it in the short term. Target price for 5 years already smashed and still holding on

That's putting it quite figuratively meteorite and dinosours

Yes no doubt that Tesla EV cars are revolutionary and way ahead of competition but caveat is that Tesla most times sells its cars at a loss.

Tesla made and delivered more cars in the second quarter of 2019 than it did in any other quarter in company history, but still lost $408 million, according to a new filing with the Securities and Exchange Commission. They suffered an even bigger $702 million loss posted in the first quarter of 2019.Most times they suffer from negative Free Cash Flow (FCF).Look at the appalling losses and meagre profits that the meteorite Tesla makes on selling cars vs the dinosaur other competitors per quarter.



They had been a loss making company for many years with only recently earning a profit largely from sale of EV credits.




Since Tesla cars don't emit hydrocarbons,they have a massive EV credit that they sell to internal combustion car makers so that the latter can avoid even larger taxes for selling cars that emit hydrocarbons.Also they raise lots of their capital from issuing junk debt and interest rate on the US junk bond market is artificially suppressed (as is the rest of the entire US interest rate environment) by the Fed money printing to push rates down and supply cheap money to the economy thus keep zombie companies that cannot be solvent at higher normal interest rates alive.The US junk bond market-like the Mortgage Backed Securities (MBS) of the housing bubble of early 2000s has already started showing signs of distress hence the current massive Fed liquidity injections to prevent an implosion of the corporate bond market similar to collapse of MBS market in the 2008 financial crisis.Also,lots of Tesla bears short sellers believe Tesla's financials are cooked and could be a ponzi scheme like Enron and the long term prospects at least in terms of financials is dire and the company stock could collapse to zero.Billionaire major Tesla short like Jim Chanos on image above and other famous Tesla short sellers like Andrew Left believe the business model of Tesla isnt sustainable as per financials.

One also shouldn't forget the controversial mercurial nature of Elon Musk calling an analyst "bonehead" during a conference call;misleading investors by pumping up the stock last year by tweeting the infamous "funding secured" whereby he was almost forced out as CEO and was compelled to pay a 20 million fine for the tweet.Also he openly smoked marijuana on a major podcast in what most investors felt was unbecoming of a CEO of a major US company.



It is this paradox of Tesla ie great prospects for EV innovation vs crappy possibly fraudulent financials that make it the most emotive stock in the US equity market with fanatical bulls and bears at each other's throats hence the wild price action swings.



It remains to see if Tesla unravels like Enron or becomes an icon to be revered in the future.


Thus is Tesla a Prodigy or a Ponzi?The future will decide this

Tesla is the quintessential "meme stock" Once it's on the move,don't kvetch,throw the fundamentals out the window,go out on a limb and ride the tide.Just don't be caught holding the bag when the music stops.

Oh the Tesla hype but other car manufacturers are coming up and may give Tesla a run for its money



No doubt Tesla will go down as one of the most fascinating stocks and firms in history.Fanatical stock with billionaires backing both the long and short side and the most shorted stock in the US stock market.Lets see if it collapses like Enron or becomes an icon like the once Ford Motors (when Ford was an icon decades ago and now its a bogus basketcase).