Tesla Motors Inc (NASDAQ:TSLA)’s CEO has been said to be a unique combination Walt Disney, Steve Jobs and Thomas Edison, as Cory Johnson cited a “brilliant guy”, but the firm’s share price is similar to a grasshopper movement pattern. Ahead of the financials the company lost almost $8 a share or 3.33% of its price, so it’s pretty obvious that few believed in Elon Musk’s creation. It was promised that their Model 3 will sell at about $35,000 then it was restated as being closer to 50,000. However, the only car that is being sold by Tesla Motors Inc (NASDAQ:TSLA) is the Model S that ranges from $74,570 to $105,670, according to their official website.
Obviously, the company will have to lower their targets, but that will pose other constraints on the Palo Alto, California-based manufacturer, so it will take some time till we see a Tesla Motors Inc (NASDAQ:TSLA) in the best selling cars’ list.
“There certainly will be more competition. They’re going to have to come down market, if they want to increase volume. Elon Musk has said that they want to sell 500,000 cars. They’re not going to sell 500,000 $100,000 cars, so they need to get down below $50,000 with volume model, but then they’re going to hit all sorts of competition,” said Kelley Blue Book’s Matt DeLorenzo.
Tesla Motors Inc (NASDAQ:TSLA) is not actually losing money as it has a gross margin of 22.6%, which is somewhat larger than what other automotive giants have. Nevertheless, this percentage level is not sustainable because Tesla Motors Inc (NASDAQ:TSLA) is practically obligated to start selling in large numbers, before thinking about profitability in terms of margins. The company’s stock is up about 53.5% year to date, although it showed a $75 million loss for the quarter, which makes one think that its stock price is pretty much a speculative lottery.
“The stock is a tool of speculation and a tool of speculators. When you’ve got nearly 30% of the shares outstanding sold short, you’ve got people who believe that Elon Musk can spin hair into gold and so there’s such great speculation,” expressed Cory Johnson.
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