Unemployment is rising, the Dow Jones (DJI) is being manhandled by the bears, and New York City is shoveling Covid-19 bodies into makeshift morgues. There's a dark cloud over the U.S. and you can bet it's about to unleash a storm on Tesla (TSLA).
Tesla can't sustain its growth
After months of promises Tesla was finally able to outperform expectations. In Q4 of 2019 the company announced they delivered 112,000 vehicles, which 92,550 were Model 3 cars. Shortly after, the company's stock rose 94% to $966 where it didn't stay for long.
"In 2019, we delivered approximately 367,500 vehicles, 50% more than the previous year and in line with our full-year guidance," they said in written remarks.
“If Tesla stumbles, the stock will sell off hard, but I believe my buddy-pal-friend Elon Musk will deliver,” said Jim Cramer on "Mad Money" as shares were nearing $966.
Unfortunately for Cramer, Tesla did stumble and has sold off hard. Of the 112,000 vehicles delivered in Q4 2019, 92,550 were Model 3 cars. The Model 3 has been popular amongst Tesla consumers and in March of this year Tesla announced it was closing their California factory that produces the Model 3. Halting production has caused the company to stumble and shares have dropped 53% since the beginning of 2020.
Expect shares to fall further
Tesla weekly chart. Source: TradingView
In the midst of the company shutting down their factory and a market sell off; don't expect shares to soar, or keep their current price. At the time of this writing Tesla shares are trading at $454.47 and have a 52-week low at $176.99. Tesla has been in business since 2003 and didn't generate its first profit until 2019, but somehow has managed to earn itself the most expensive automobile stock in the market. The company has been extremely volatile as shares have been experiencing unhealthy and unsustainable growth. What goes up must come down and Tesla isn't an exception to the rule.
Don't forget to register on the site to get access to our weekly podcast. Please, send us your investment questions through the contact form so we can answer them on our podcast!
DISCLAIMER: This site article does not contain financial advice. Any and all market analysis is solely the authors opinion.