Is It Time To Sell Tesla Motors Inc (TSLA)?

On August 15th, 2014, it was mentioned on CNBC that the current trend might not be what appears to be a future decline in the price as far as Tesla Motors Inc (NASDAQ:TSLA) was concerned. Led by CEO and founder Elon Musk, this company prides itself in manufacturing electric cars and powertrain components. Although consumer reports have not favored Tesla Motors Inc (NASDAQ:TSLA), the stock, to its credit, has been able to retain its momentum so far.

On CNBC, when Mandy Drury questioned as to why the stock hasn’t lost its momentum in spite of a negative consumer report, the reply was as follows:

 “[…] remember there is a 30% short interest in the name and that is why we have gaps when there is good news […]. I’m just going to make another point here; we just talked about of the short interest. This is a really well owned stock; meaning it’s in very good hands “Elon Musk” the CEO funder, he owns 23% […]. Top holder, they don’t look like selling any time soon.”

Tesla Motor (TSLA)

What appears to be a ‘sell’ opportunity on Tesla Motors Inc (NASDAQ:TSLA), may turn out to be a break of new high if the large capital pools (who own majority of company shares) and CEO Elon Musk (owner of 23%) refrain from selling and the momentum continues unhindered. If price hits the 200-day moving average, it might be a good spot to stake a long position, as mentioned in the CNBC review:

 “It might offer a bit of support”

Also in context of Tesla Motors Inc (NASDAQ:TSLA), options are at a two-year low, as stated in news – “it’s as cheap as it has been in the last two years”.

In addition to bad reviews from consumers, even contributors on CNBC have recommended not to sell this stock. However, maybe it is time to look for a fresh buying opportunity to set new long positions on this share.

Tesla Motors Inc (NASDAQ:TSLA), currently boasts of a market capital of $32.6 billion, a second quarter revenue of $769 million and a negative income of $62 million. Revenues have risen to $149 million from last quarter and its price has shown significant increase in the last two years.

This article has been written by Alexander Scheller and edited by Vinita Basu.

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