It’s hard to bet against Elon. Elon is a serial entrepreneur who has beaten all the odds and at times he works 120-hour work weeks and doesn't leave the Tesla factory for days at a time. Not even the odds, but the timing of events are really Elon and Tesla at this time.
Bad news continued to mount for Tesla (TSLA) Tuesday as Morgan Stanley outlined a worst-case scenario that calculates a potential 95% swoon in Tesla stock while the company's short sellers are in position to see a highly profitable month of May.
Morgan Stanley analyst Adam Jonas slashed his low-end bear case scenario on Tesla stock to $10 a share, down from $97. That scenario is based on weak demand from China, exacerbated by the ongoing trade war with the U.S.
And now a Citigroup Global Markets analyst is out with another shocking scenario for Elon Musk’s electric car maker.
Citi’s Itay Michaeli sees increasing probability the shares plummet more than 80% to $36.
“Maintain sell/high risk as the risk/reward still appears negatively skewed despite the recent capital raise and stock pullback, mainly on lingering demand/FCF (free cash flow) concerns,” the analyst said in a note late Tuesday.
This isn’t Elon’s first rodeo show. I mean SpaceX and Tesla both almost went bankrupt in 2008. Elon had $40 MM left to his name and split the $40 MM to continue funding SpaceX and Tesla. Fast forward to 2019 and Space X’s Falcon Heavy flight landed all three rocket cores for the first time recently and Tesla is producing over 5000 Model 3s per week.
Nevertheless, if Tesla does go down, it won’t go down without a fight because Elon isn’t only one of the greatest visionaries of our time, but he is also a fighter and a warrior.
Major levels to fend off the most bearish cases on Tesla are the monthly demand at $100 and at $44.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.