I do not currently own any shares of Tesla nor I have a short interest in it.
I have been warning investors against the overvalued Tesla’s stock for many months now. See my Reddit post below that dates as far back as 6 months ago.
The stock price was trading above $300 per share and the its PE ratio at that time was around 99. Currently its PE ratio is less than 37 and the stock price as of today’s close is $109.10. That’s around $200 per share decline less than six months.
Elon Musk cannot be trusted
This year alone Elon sold more than $24 billion worth of Tesla stock. He started selling earlier in the year when the stock price was at its peak. He sold at multiple occasions. Every time he continued to assure investors that he will not sell more shares, yet he goes and sells more months later. All in all, this year alone, Elon sold more than $24 billion worth of Tesla. He must have realized how over valued the stock was and took advantage of that. Elon again promised that he would not sell anymore shares for two more years, but who can trust him now?
While Tesla, inc (NYSE: TSLA) stock looks much more affordable at these levels, the decline in its price might not be over yet. Investors are ticked off from Elon’s selling and realizing how overvalued Tesla stock is. The big question is, can Tesla’s business growth continues despite all the competitors out there nowadays? Is Tesla working on new products or technologies that will sets it apart from competitors? To me, I would want to have these questions answered before thinking about investing into the business.