Tesla shed another $14.05 on Tuesday, down 11.41% for the day. It is sitting on feeble support with weak support at $91.
On a market cap basis, this is one of the biggest plunges in history but there is no reason at all to think it stops here.
Tesla TSLA Monthly Chart
Technically speaking, TSLA exploded out of a rising wedge in early 2013 then spent over 6 years in a horizontal channel.
Moves out of long periods of consolidation are typically huge and this was no exception. The share price blasted from $26 to $414 in less than 2 years.
ARKK Plunges Below Support
What a Ride
Technically speaking, the ARKK picture looks even worse. ARKK plunged 20.54% on Tuesday, crashing through what I recently labeled strong support as if it that support was dust in the air.
Now there is no monthly support for this sinking ship until the $16 level or so. Moreover, there is no fundamental reason to believe it will not drop that far.
TSLA is one of the ARK ETF’s biggest holdings. Ironically, ARKK is so bad that TSLA is one of its better holdings.
Tesla Demand Worries in China
Reuters reports Tesla Shares Extend Losses on Demand Worries in China
Tesla Inc shares fell 11.4% on Tuesday after a Reuters report that Tesla was planning to run a reduced production schedule in January at its Shanghai plant sparked worries of a drop in demand in the world’s biggest car market.
It has lost more than half its value since the start of October as investors worry that Twitter was taking much of Chief Executive Elon Musk’s time while fretting about his stake sale in the electric-car maker.
The world’s most valuable automaker’s production cuts at the Shanghai plant come amid a rising number of COVID-19 infections in the country.
Tesla Used Car Bubble Pops
Making matters even worse, the Tesla Used Car Price Bubble Pops, Weighs On New Car Demand.
Tesla buyers who waited months for their new car have had an unusual choice for much of the past two years: keep the new electric vehicle, or sell it at a profit to someone with less patience.
But the days of the Tesla flip are numbered – a potential threat to new car prices that are already getting cut.
Prices of used Teslas are falling faster than those of other carmakers and the clean-energy status symbols are languishing in dealer lots longer, industry data provided to Reuters showed.
The average price for a used Tesla in November was $55,754, down 17% from a July peak of $67,297. The overall used car market posted a 4% drop during that period, according to Edmunds data.
Nearly a third of used Teslas for sale in August were 2022 models up for resale, a sign that original buyers were aiming to flip, analysts said. That compares with about 5% of other brands on the used market, research firm Edmunds said.
Hoot of the Day
Flipping Teslas. What a hoot.
And here’s another hoot. Tesla, which has disbanded its media relations department, did not respond to Reuters’ emailed questions.
Stonk Hodlers’ Mentality
Investing.com reports Third Point’s Loeb says Cathie Wood has ‘Stonk Hodlers’ Mentality
Billionaire investor Dan Loeb isn’t impressed with Cathie Wood, according to a tweet posted on Wednesday. Loeb, who runs New York-based Third Point, said Wood’s memo should be used “as a treatise to study the mindset of stonk hodlers.”
Delusion of the Day
ARRK fund manager Cathie Wood defends herself with a delusional post on Disruptive Innovation And Profitability.
For years, market pundits have been warning investors about “profitless tech”––companies ostensibly incapable of turning a profit. They describe stocks in ARK’s strategies as “concept capital” and suggest that our investment team either cannot distinguish profitable companies from unprofitable ones or seeks to invest in unprofitable companies. In our view, the companies in which we invest are sacrificing short-term profits to capitalize on the exponential growth and highly profitable opportunities that a number of innovation platforms are creating.
The delusion of the day award goes ARK founder Cathie Wood.
As for “concept capital” Wood needs a clue.
Tesla has steep competition coming up from the major car manufacturers. Teledoc is headed to zero in my estimation as are some of her crypto ideas.
Wood’s Predictions
- The price of bitcoin will hit $1 million by 2030, a roughly 6,000% increase from current levels.
- Wood calls for Zoom, ARKK’s largest holding, to approach $1,500 a share in 2026. That is based in part on expectations of a worker backlash against returning to offices. Her bear case is for shares to trade at $700.
Cathie Wood’s Ark Open Source Model Predicts Tesla Shares Will Hit $4,600 by 2026
Please recall my April 18, 2022 post Cathie Wood’s Ark Open Source Model Predicts Tesla Shares Will Hit $4,600 by 2026
Her genomics portfolio may have some eventual winners but that space is a huge crap shoot.
By 2030 ARK predicts a share price of about $22,500 equating to a market cap of roughly $22.5 trillion.
US Real GDP in 2021 was $19.8 Trillion.
ARK is predicting the valuation of Tesla will exceed the entire US real GDP by the early 2030s.
Yes, this is more than ridiculous. It also says something about ARK’s open source share price model.
ARK Combined Top Holdings
ARK has a number of ETF funds. Here are all All 129 Combined Ark Invest ETF Holdings, updated daily.
Of the top 49, ARK is in the green on only 6: Tesla TSLA (barely), Veracyte (VCYT), Iridium Communications (IRDM), John Deere (DE), Cerus Corporation (CRUS), and Vertex Pharmaceuticals (VRTX). The price entries on the remainder are not listed.
EXAS is Wood’s top holding at 6.98 percent weigh. ARK owns 8.47 percent of EXAS.
ARKK Holdings
Here is a link to the ARKK Holdings. There are only 30 in that group. Wood is in the green on 4 of those 30.
ARKG ETF Holdings
ARKG is Wood’s biotech-genomics portfolio. Here is a link to the ARKG Holdings
It is possible Wood is harboring some big winners yet to come. If so they are likely to be in bio space.
I know nothing about anything in this portfolio other than it’s possible for any biotech or genomics company to hit a home run.
ARKW ETF Holdings
ARKW is Wood’s Web portfolio. Here is a link to the ARKW Holdings
The ARK ETFs are an amazing disaster no matter where you look. Tax loss selling likely impacted these funds.
Yet, there is no fundamental reason for a bounce on any of these turkeys.
However, there is one thing we can do, pray.
Dear Lord Send Help!
And with Home Prices Falling in Every Major Market, please Lord, send help on that too.
This post originated on MishTalk.Com.
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Mish
Net metering acts as if the only thing a utility does is generation, and effectively subsidizes solar panel users and sticks their costs onto everypne else, even though panel users tend strongly to be considerably more affluent than the average person. I don’t know what CA’s generation costs are, but from what I’ve read they are higher than 8 cents/kWh. Panel users should be paid the wholesale rate and nothing more.
As for the “solar side” of Tesla, you’re talking about the roof tiles and the batteries. Both of those things are a joke. Tesla’s car business is cash flow and GAAP earnings positive. The “solar side” is tiny, and doesn’t make money.
You could say that we are past the peak of inflated expectations?
Every day is different. Some days I trade a lot. Some, a little. Some, nothing at all. Have to live a balanced life.