Tesla front entrance sign

Tesla Stock Down After Disappointing Investor Day Event

By:Thomas Westwater

Tesla Stock Falls After Investor Day Event

Tesla stock fell about 6% in early morning trading on Thursday following the electric-vehicle maker’s first investor day, which took place on Wednesday night. Elon Musk—the company’s Chief Executive Officer—outlined a plan to turn the company into the world’s largest automobile company. Mr. Musk and his lieutenants outlined a strategy referred to as Master Plan Part 3, focusing on a sustainable path forward and lowering costs while also proposing a vision to confront several engineering problems.

A failure to address the company’s product roadmap and new Tesla models disappointed investors. However, Mr. Musk did say that Tesla’s offering will have to round out around ten models. That comment came after Zach Kirkhorn, Chief Financial Officer, stated a sales goal of 20 million vehicles per year by 2030. Today, Tesla sells just under a million and a half cars annually. It’s a lofty goal, but Tesla has defied expectations before.

Investors have been banking on an economically priced Tesla model to roll out, something proposed by Mr. Musk previously, although Wall Street will have to keep waiting as there was no word of such vehicle. The company cut prices earlier this year, but the lowest price tagged model remains about $40,000 for delivery. The company will likely have to work on costs cutting measures through its manufacturing channels before announcing a cheaper machine.

Trading Tesla Stock After a Big 2022 Drop

Tesla stock recorded a huge 65% decline last year, its worst annual performance on record. That stunned some ardent investors who were put on their heels by Wall Street repricing the company to trade around valuations of more traditional automakers versus a budding technology company.

Despite today’s decline, Tesla stock is trading with an implied volatility rank (IVR) of 24.7. The relatively low IV makes it a suboptimal time to sell premium, although those who want to take a directional assumption may see a call or put spread as an enticing strategy. The stock price has been rangebound around the $200 handle over the last several weeks, leaving the chance for a new directional trend to form, with a downside break currently favored, given today’s selloff.

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

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