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TSLA: Buy The Dip?

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We are not even halfway through the year and it has already been a challenging 2018 for TSLA (Tesla)- it wouldn’t be fair to say the CEO, Elon Musk hasn’t contributed to the debacle. From petty clap-backs toward Wall Street Idol, Warren Buffet, mocking analyst questions on the recent earnings call, and a fatal crash from one of their Model X SUVs on autopilot (though the driver’s fault was to blame), TSLA needs a strong comeback sooner rather than later.

Making a steady decline since last year (from Early June 2017), the TSLA stock price dropped down around 25% from the shareholder’s conference call. But is this a good time to buy the dip?

With their new and innovative technology, many loyal investors are waiting to buy in the dip and are holding their shares. If Elon Musk remains accountable for his for his promises about strong annual returns for this year, they may have a great comeback. Yet, similar to the recent electronic vehicle crash from UBER on 3/18/2018, any fatal electronic car crash does not present good outlooks upon any company.

Also, investors are closely watching their negative cash flow. In the fourth quarter, TSLA lost $771 million (comparable to last year at $219 million) as well as their “free cash flow” with a loss of $277 million.

Is Elon willing to stay humble and focus on his company’s performance and shareholders returns? TSLA has stated their goal of achieving 5,000 production units of their new Model 3 in “about three months” that will obtain more equity for the company. Investors now await their acclaimed returns.

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