Tesla Stock Could be In For Some Pain
There are several pertinent bearish catalysts about which Tesla investors could be cautious.
For one, broadly speaking, EV stocks have been hit by inflation-induced bond yield increases in recent months. Indeed, all growth stocks have this headwind to contend with at the moment. Additionally, as has been known for a while, a global EV chip shortage is threatening production numbers for all high-growth EV players such as Tesla.
Moreover, earnings quality has become a big issue for investors. The fact that Tesla’s still losing a ton of money making electric vehicles, yet is able to report a profit due to unsustainable cash flow streams (namely, Bitcoin trading and the sale of emissions credits), is worrisome to many long-term investors.
Also, valuation concerns have begun to take hold with Tesla stock. This stock still trades at more than 16 times sales and 600 times earnings. As mentioned above, those earnings primarily comprise non-operating profits.
One of the most famous investors of our time, Michael Burry, who is known for his role in The Big Short, has placed an absolutely massive short bet on Tesla. His recently-filed form 13-F spells out an incredibly short, the likes of which we haven’t seen in a long time. Obviously, Burry is not predicting continued growth for Tesla.
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