Shares Of Tesla Hit ALL-TIME HIGH — Should Investors Keep Riding The Wave Or Take Profits?

I have to admit, Tesla has come a long way from the days of big talk and one lonely roadster that it offered for sale. But it has climbed past the haters the doubters and the cynics.

I'll admit it, I was a doubter.

But since the Model S reached the market, sales have been surpassing the likes of other luxury mainstays, such as the Porsche Panamera, Mercedes-Benz S-Class, Audi A8, BMW 7-Series, etc. Our friends at Deutsche Bank recently adjusted the equity's target price to $200/share for the following reasons:

“Based on conversations with management and monitoring information available on Tesla owners’ blogs, we believe that the company is on track to modestly outperform Q3 margin expectations,” said Dan Galves, lead analyst for Tesla at Deutsche Bank.

I think that's a pretty safe bet. I mean, jeez, the six-month chart looks like Mount Everest — at least the one good side of Everest, that is. We're pretty sure since the Model S is still a "hot" item it will do well from a sales perspective into Q3.

The real question is can all of this great success continue?

With a niche product like this we've seen rapid success then a decline once all the folks who wanted one got it. THINK: MINI, Smart. The real test will be if the Model S keeps doing blockbuster numbers.

It seems the market is loving it. Today, during intraday trading, shares of Tesla (TSLA) reached an all-time high of $185.83. TSLA closed at $183.39.

I'd say right now is a pretty difficult time to decide if more money should be invested into the stock or if now's the time to start taking some greenbacks off the table. That said, what would YOU do if you were throwing down?

**AutoSpies.com is not a registered financial advisor. Please consult a registered financial professional before making any investment decisions.

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bottomntop - 9/21/2013 9:58:03 PM

+2 Boost

I SHORTED TESLA 400 shares at 180 on Friday September 20th, 2013. I know it went up a few points higher but I will not cover my shorts until I make a good profit, even if the shares go much higher I will be patient until they eventually drop. My reasons are:
1. Tesla selling 20,000 or so cars this year and having a market value of 22 billion dollars is irrational. Ford sells more than 2 million cars a year and has a market value of 66 billion. Ford sells 100 times more cars and is valued only three times more than TSLA? Even if Tesla is able to quintuple this number to 100,000 cars in the next five years, or go to 200,000 cars in ten years, it still would not be able to fill in its current market valuation by any stretch.
2. Tesla loses money per car. The reason it showed non-GAAP profits in the first and second quarters of 2013 is mostly due to the ZEV credits of about 120 million dollars. These ZEV credits will disappear by the third and fourth quarters, partly or mostly since Nissan has extra ZEVs to sell to other car companies.
3. Only a small percentage of the American or world public can afford to buy a 70,000 to 100,000 dollar car, and even fewer are interested in an electric car at this time.
4. Tesla is spending lots of money on more land (150 million dollars) and starting a number of charging stations that probably cost 200,000 each to build, and additional money to maintain, and more money on R and D. This will lead to continued losses on their income statements in coming quarters.
5. More competition coming from BMW i3, and potentially GM with a 35,000 EV car within the next few years that gets a high mileage per charge. Not even mentioning Nissan Leaf, VW plans for EV cars, and most other car companies coming out with their hybrid and electric vehicules.
6. High cost of labor, taxes, health care, etc., in California to have an auto plant.
7. Possibly other risks include: National or international economic downturn, rising interest rates, limited supply of lithium or rising prices of lithium. Supply problems for the hundreds of different parts that make up the car are another possibility, or something mechanically going wrong with their current Sedan or future models.
8. Major investors and option holders could cash out at any time dropping the stock like a rock in no time.
No one can predict where the stock price will be in the near or long term, but I am confident enough at this time to short TSLA.