Tesla Inc. (NASDAQ:TSLA) was in the news this weekend after information that Bill Gates holds a $500 million short position on the stock. The leak comes only days after Tesla released its best performance. The leak was intentional. It signals to the market that Tesla shares will not plummet, given the continued performance improvements.
Tesla is trading at $998. The company was among the few that closed higher last Friday as 90% of the stocks shed value. Tesla has been moderately bullish over the last three weeks. The stock has remained defiant despite whaling activities with a bearish sentiment.
Tesla is rated perfectly as a growth stock. Recent growth in revenues is evidence of why strong growth is expected. The company is trading at a forward PE of 99. A better indicator of the company’s valuation against earning potential is the PEG ratio. At 3.3, the PEG ratio is below that of various technology and growth stocks.
Tesla remains bullish as MA-10 crosses above MA-20
Source – TradingView
Tesla is bullish. However, the price faces low momentum as the market jitters grip on. The high price tag is also a factor. If the stock was more liquid, it is likely that the stock would rally higher.
Summary
Tesla is a hyper-growth stock, justifying the current valuation. While whales bet on the stock’s decline, this analysis finds that the demand for Tesla vehicles will keep supporting the stock.
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