16 February 2017 at 15:41 GMT
Tesla share price are up 54% since early December. Saxo Bank’s head of equity strategy Peter Garnry explains, why he thinks this is exaggerated and how to profit from this.
Preliminary Q4 earnings are way below expectations. Investors. however, don't seem to care and the valuation of Tesla is beyond anything else in the car industry. Tesla claims now being an energy innovation company, but according to Garnry this is not in sync with the underlying data.
Tesla’s SolarCity acquisition comes with great risks and the company will likely need to tap capital markets to fuel growth, says Garnry.
There will be downside risks over the next 3-4 months and we are looking for the share to drop from its current $280 level down to $220, says Garny.
The best way to express a negative view on Tesla is through put options. We buy the put options with a strike at $280 and expiry in June 2017, Garnry concludes.
Read the whole article here.