Cars and Drivers

Caution Grows in Tesla as Quiet Period Ends (TSLA)

Tesla Motors, Inc. (NASDAQ: TSLA) has seen a strange trading pattern since its IPO first came to market in June.  The quiet period has now ended and the analyst pool has begun coverage of the electric luxury and sports car maker.  As we expected, the bias here is one of caution rather than one of endless gains.

Deutsche Bank started coverage as “Hold” with a $17.00 price target.  Morgan Stanley started coverage as “Equal-weight” and we have yet to see the full Goldman Sachs “Neutral” initiation.

J.P. Morgan started coverage as “Overweight” with a $25.00 price target.  Jamie Dimon doesn’t run that research department for J.P. Morgan, so there might be a discount to the research considering there were three cautious calls versus one positive call.

Last week we gave Investor Place the trade idea that staying cautious was the way to go and we looked at the Tesla Aug-2010 $18.00 Puts at $0.45 as the options trade for speculating on caution.  The price compression has begun and those are trading at $0.40 despite that the stock is lower.

Tesla is one of those situations where it depends upon your stance on “green” energy.  Some feel this is a pure gimmick and some feel this is the future.  Either way, competition is coming at a far lower price.  The valuation of Tesla may need to see more softness before any real analysis is necessary here.

JON C. OGG

Want to Retire Early? Start Here (Sponsor)

Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?

Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.

Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.