by Clean Energy Intel
Having traded in a tight range for most of the day, Tesla
collapsed in the last 45 minutes of trading on Friday. The stock
hit a low of 22.64 and closed at 22.79, down 19.3% from its
previous close. Although it was reported to have bounced 7% in
after hours trading, the price action remains a clear worry. More
worryingly, the move took place on what became the third highest
volume day of the last 52 weeks - with just over 5.5 million
shares changing hands.
The stock indeed closed down 35% from the $35 high it
saw twice in November and December of last year.
The move took place after Tesla confirmed that Chief engineer
Peter Rawlinson and Nick Sampson, supervisor of vehicle and
chassis engineering, had left the company.
Not much has been said publicly about the moves.
However, in an emailed statement attributed to spokesman Ricardo
Reyes, Tesla made the following comments to Investor's Business Daily
"Having completed conceptual and design engineering work on Model S,
Peter has decided to step away to tend to personal matters in the
U.K.,..... Nick Sampson is no longer with Tesla. He had fully
transitioned from any Model S activities by the time of his
All of this would imply that the departure of these two players
should have little effect on the launch of the Model S in the
summer. However, the market may worry about this for a while longer-
and that of course would be likely to be reflected in the price
Nevertheless, from a big picture perspective, Tesla looks
heavily oversold. As the chart above indicates, we are now in
the rough $22 to $24 range that has seen good support in the
past 52 week period. Moreover, Tesla has already announced the
pricing and broad timely of it´s year´s launch of
the model S - for more detail see here
I already have a small position in Tesla, having recommended
the stock on a few occasions last year. However, I intend to use
the current weakness in the stock price to build
a significant position ahead of what should in the end
be a solid launch of the Model S.
Finally, you can read our bigger picture analysis on Tesla
and the future of the electric car here
Disclosure: I am long Tesla.
Clean Energy Intel is a free
investment advisory service produced by a retired hedge fund
strategist. You can read more at www.cleanenergyintel.com