not vested
Falling Knife Stocks: Tesla (TSLA)
Over the trailing month, shares have lost more than 18%. That’s bad enough, but it looks extremely conspicuous when you consider TSLA’s prior mercurial performance.
Undoubtedly, the Tesla faithful will consider this dip a buying opportunity. Again, I think it might be a falling knife for two reasons.
First, electric vehicles (EVs) are very expensive. If you’ll notice, people are crazy about used cars right now, largely due to the semiconductor supply chain disruption. But they’re mostly buying combustion-engine cars, not EVs. Globally, EVs represent only a small portion of total auto sales.
Second, Tesla has serious competition — and some of CEO Elon Musk’s lovable ways may have become a liability.
Recently, Ford (NYSE:F) unveiled its electric F-150 Lightning, which will truly gauge Americans’ interest in electric trucks. While I can’t say for certain if Ford will be a resounding success, the electric F-150 is off to a good start by looking normal.
On the other hand, the Tesla Cybertruck is, well, special. Maybe I’m wrong to be skeptical, but I think TSLA faces tough challenges ahead.
Source: Investor Place