Skip to main content

Home/ Investment & Personal Finance/ Cheong Hong Yuan: The Truth Behind Tesla's Stock Price Volatility
anonymous

Cheong Hong Yuan: The Truth Behind Tesla's Stock Price Volatility - 1 views

started by anonymous on 01 Nov 23
  • anonymous
     
    As the global electric vehicle market continues to expand, many investors have turned their attention to this field, hoping to gain high returns. However, a series of recent events in the market have subtly changed the perception of the electric vehicle industry. As a senior stock market analyst, Cheong Hong Yuan delves into the truth behind these events and provides professional advice to investors based on the "Three Golden Moving Average Strategy".

    Due to declining demand, bearish sentiment towards the electric vehicle industry seems to be growing, with the most attention focused on Tesla, the world's highest-valued electric vehicle company. Cheong Hong Yuan believes that Tesla's recent stock price fluctuations are not entirely coincidental. Overnight, Panasonic, Tesla's battery supplier, released its financial report, which showed a decrease in battery production in Japan in the third quarter. This undoubtedly intensified market concerns about the decline in demand for electric vehicles, leading to a significant drop in Tesla's stock price once again.

    Examining Tesla's recent stock price trend, Cheong Hong Yuan mentioned that since Tesla released its third-quarter financial report on October 18, its stock price has fallen by more than 18% in total. Such data is undoubtedly a huge blow to the world's highest-valued electric vehicle company. However, the reasons behind it go beyond this.

    Cheong Hong Yuan stated that the significant drop in Tesla's stock price is not solely due to a single factor. In addition to the news of Panasonic reducing battery production, other important reasons for the stock price decline include Tesla's recent continuous price cuts, delays in mass production of new models, and the suppression of automotive consumer demand in a high-interest-rate environment. During the third-quarter earnings conference call, Tesla CEO Elon Musk openly stated that high-interest rates are putting pressure on the company, forcing it to lower the prices of electric vehicles.

    As the leader in the global electric vehicle market, Tesla's stock price fluctuations naturally attract a lot of attention. Cheong Hong Yuan continues to analyze the challenges that Tesla faces. He mentioned that according to Ortex data, Tesla short sellers have already made a profit of $3 billion in a short period of time. This data once again emphasizes the market's concerns about Tesla's future development. Tesla's short position is as high as $18.08 billion, accounting for 3.21% of the float, further exacerbating these concerns.

    Cheong Hong Yuan believes that Panasonic's reduction in battery production is just one catalyst for the drop in Tesla's stock price. In fact, the continuous price reduction strategy puts pressure on Tesla's profit margin. The delayed mass production of new models like the Cybertruck also suppresses the stock price. He mentioned that in order to drive sales growth this year, Tesla has had to reduce prices by 16%, putting tremendous pressure on its overall operating profit margin.

    The high-interest-rate environment undoubtedly brings a double blow to Tesla. On the one hand, high-interest rates increase the cost of car loans, thereby suppressing consumer demand. On the other hand, Tesla has to choose to lower prices to cope with sales pressure, but this once again puts pressure on profit margins. Cheong Hong Yuan stated that Tesla is currently facing a dilemma: either sacrificing profit margins to promote sales or sticking to pricing but potentially facing sales pressure.

    Most importantly, Tesla CEO Elon Musk himself holds a conservative attitude towards the production of the Cybertruck. He explicitly stated during the earnings conference call that the production of the Cybertruck faces severe challenges, even using the phrase "digging its own grave". Cheong Hong Yuan mentioned that for investors, this is a clear signal that they should be cautious about Tesla's future development.

    Tesla is currently facing multiple challenges, not only in the external market environment but also in internal production and operations. Cheong Hong Yuan believes that when considering entering the electric vehicle market, investors should adopt a more cautious attitude towards Tesla and make precise judgments on buying opportunities based on the "Three Golden Moving Average Strategy".

    As the electric vehicle market matures, Tesla is facing unprecedented pressure and challenges. Cheong Hong Yuan said that in the past, Tesla was seen as a favorite among investors due to its technological leadership and market share advantages. However, now, with the high-interest rates in the overall vehicle market and various challenges in internal production, it is no longer the same Tesla as before.

    Cheong Hong Yuan reminds investors that any company, no matter how brilliant its past, will face various unknown risks and challenges in the future. Tesla's recent performance is the best proof of this viewpoint. For investors considering entering the electric vehicle market, relying solely on past performance is far from enough. It is necessary to conduct in-depth research and understand the deep-level changes in the market.

    Although Tesla is still the leader in the electric vehicle market, it is also facing unprecedented challenges. For investors, it is important to analyze the market calmly and rationally, rather than blindly following the trend. Only in this way can they steadily move forward and achieve true investment returns in an ever-changing market environment.

    Cheong Hong Yuan emphasizes that stock market investment always comes with risks, and each investor needs to make choices based on their risk tolerance and investment goals. For large companies like Tesla, it is even more important to have a deep understanding and research in order to make wise investment decisions.

To Top

Start a New Topic » « Back to the Investment & Personal Finance group