by Ian Harvey
August 23, 2019
Tesla troubles continue! This seems to be a consistent problem as every few months Tesla Inc. (NASDAQ:TSLA) is in the news for a scandal or some production issue.
“Armchair Trader Members” Profit!
On Tuesday, August 12, due to Tesla troubles at the time, members of Stock options Made Easy executed a trade on the assumption that Tesla Inc. stock price would decline further – which it did – providing a nice potential profit of 120%. You can read that recommendation here.
Tesla’s latest problem came on Tuesday in the form of a lawsuit by Walmart filing a scathing lawsuit against Tesla for alleged breach of contract, gross negligence, and failure to live up to industry standards for the production and installation of solar panels at many of Walmart's stores.
Walmart’s lawsuit against Tesla over fires at more than a half-dozen stores threatens to undermine the automaker’s latest bid to reboot its struggling solar unit.
In the lawsuit, Walmart accused Tesla of having untrained workers putting up shoddy installations and showing "utter incompetence or callousness, or both," and asked for the removal of solar panels from more than 240 of Walmart's U.S. stores.
In November 2016, Tesla acquired SolarCity in a $2.6 billion all-stock buyout. The infrastructure, patents, and personnel gained from this merger allowed Tesla to start its solar division. In the lawsuit, Walmart highlights familial ties between the two companies, calling it a flawed merger.
Solar panels have not yet become a large part of Tesla's business, as was expected at the time of the acquisition. During SolarCity's heyday, Q4 2015, it installed over 200 megawatts of solar panels in a single quarter (enough to power about 130,000 homes). But last quarter, Tesla installed just 29 megawatts of solar, a huge decline from previous quarters. This could also show that the solar revolution Musk predicted is not yet here – further Tesla troubles brewing.
YOU NEED TO BE IN TO PROFIT!
In the upcoming quarter (Q3), Tesla troubles will continue if the projected earnings are correct. Earnings are projected to fall 104.8% from the year-ago period to -$0.14, based on the current Consensus Estimates. However, analyst estimates for the quarter range from -$0.60 to $0.57, showing that Tesla is quite messy financially and earnings numbers are hard to predict.
For the full year, earnings are expected to drop 137.6% from 2018 to -$3.16. For fiscal 2020, earnings are then estimated to skyrocket to +$4.82 on the year, in a sign that it will hopefully start to recover from its history of large losses – don’t hold your breath!
What can you do?
It appears that Musk and Tesla troubles will continue into the future. The volatility will continue also as young investors and people searching for massive growth potential from a firm in a game-changing industry persist, coupled with Tesla's mixed history of big strikeouts and home runs and CEO Elon Musk's eccentric management style.
If you agree with this scenario that Tesla's troubles will continue then you may wish to consider the following options trade…..
Option trade to consider: Buy the TSLA 0CT 18 2019 200.000 PUT at approximately $9.00.
If you not a member and interested in being part of this profitable action just CLICK HERE.
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!