A couple things to think about from Barron's Stocks to Watch:
How Tesla is Like 1970s New York City
The Institutional View’s Andrew Addison compares Tesla Motors (TSLA) to New York City in the 1970s, not a good thing:Stocks to Watch followed up with:
Tesla has undergone a change in its trading pattern. Until recently, each time that the company issued more shares, the offering price held as support. The last capital raise occurred when Tesla was approximately 215. That area is becoming strong resistance now.
Concerns are rising about Tesla’s ability to pay for its proposed acquisition of SolarCity (SCTY). In a securities filing [on Wednesday], Tesla disclosed that it will tap the debt or equity markets to funds its acquisition of SolarCity. What is more concerning in my opinion, is that Tesla is seeking funding also to be able to pay $422 million to bondholders in the current quarter....MORE
Tesla Motors: Nothing to See Here
Earlier today, we highlighted one analyst who compared Tesla Motors (TSLA) to New York City in the 1970s and recommended investors sell now. Baird’s Ben Kallo and Tyler Frank, however, see recent weakness in Tesla as a buying opportunity. In a note released yesterday, they explained why:The problem that threatens the existence of the combined SCTY/TSLA is if they can't raise enough money to cover the cash burn the game is over.
Reiterate Outperform and price target of $338. We are buyers on recent Tesla weakness, caused by recycling of old news. Headlines have been dominated by concerns over Tesla’s need for a capital raise and near-term liquidity constraints, but these are not new developments. We believe that recent pressure is overblown and would be buyers on any weakness.
Need for fund raise…dominated headlines [yesterday], but Musk has been transparent on the need for a capital raise since the SolarCity (SCTY) announcement....MORE
So far this week:
A Bad Day For Elon Musk and His Insurers (TSLA; SCTY)
"Elon Musk Faces Cash Squeeze at Tesla, SolarCity" (TSLA; SCTY)
Devonshire Research Group's Short Tesla Thesis, Part II (TSLA)