Tesla excites the market once again with the announcement of two product launching this month. On Sunday, Tesla CEO Elon Musk posted on his twitter account that an unexpected product will be unveiled on the 17th to be followed by the simple one-stop solar + storage experience that it has been working on with the SolarCity on the 28th. Ahead of these events, the automotive company has been relative challenged. Will Tesla finally get back to the game?
During the third quarter of the year, Tesla met a major downfall as the stock slipped from 235.04 at the start of August to 195.74 in the mid of September. The stock was highly challenged by the doubts casting over the first phase of the SolarCity agreement. Apart from the real production and sales and volume target, the deal was quoted of being a bailout of the SolarCity and an audacious plan for the Tesla. Eventually, the cold reception from the investors drove the stock downward.
As seen in the image below, Tesla declined after trading in a tight range in the last two months. Going beyond the lower barrier, the trend kept on not until an upward momentum was met in the last period of September. A bullish call sustained as the company disclosed a better-than-expected deliveries in the current quarter.
During the last trading session, the Palo Alto based automaker company had a market capitalization of 28.19 billion. It was down by 2.18 percent to $196.61 with an Intraday high of 201.32 and an Intraday low of 195.80. The stock has a 52-week high of $269.34 and a 52-week low of $141.05 with a 50-day moving average of $208.01 and a 200-day moving average price of $222.01.
The company is expected to release its quarterly earnings report on October 26 whereas the outcome of its investments for the Model 3 production will be in the eyes of the market players. Due to the ramp up of deliveries, the profit of the company could blow up with a positive operating cash flow. Also, the automotive gross margin is on the table after the improved vehicle manufacturing efficiency and cost reductions of Model S and Model X in the previous quarter.
During the weekend, Elon Musk indicated on his Twitter account the unveiling of a new product on the 17th of the month. With no specific details, the American auto giant captured the attention of the market players. Speculators suggested that it might be a new vehicle or another autonomous feature as the company dwell too much time in the self-driving application.
Further, Tesla is gearing for the debut of the product it has been working on with SolarCity. Ahead of the product launching, Musk clarified that the solar proof product with integrated batteries is not a thing on the roof, but it is the roof itself and will be a fundamental part of achieving the differentiated product strategy. Mr. Musk also posted that “Tesla/ Solar will need to raise equity or corp debt in the fourth quarter. Won’t be necessary for either.”
Tesla wrote in its recent filing with the Securities and Exchange Commission that the company is currently planning to raise additional funds by the end of this year. The funds will include potential equity or debt offerings which are subject to market conditions and recognizing that Tesla cannot be certain that additional funds would be available to it on favorable terms or at all.
Investors usually get hyped whenever Tesla releases new item. Acquiring the market confidence all over again, Elon Musk just know how to drive interest to the company. After the controversial incidents which involved Model X and Model S, Musk has proven the stability of the company after the high numbers of deliveries recently.
On one hand, the stock has been weak in the market. As seen in the image below, the band might continue to contract, heading for a tight trading range for the stock. A low volatility is highly reasonable after the stock went through a high volatility. On the other hand, as the earnings report and the product launching approach, expect the stock to regain strength by next week. With an upbeat quarterly earnings and the emergence of new products, Tesla can go back in the game soon.
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