We Hate To Say It — We Called This One

Dear Rundown Reader,

It feels good to be right.

It doesn’t feel good to be right about a company’s failures.

Well maybe a little. We have our pride too.

Three weeks ago we nailed this one.

Tesla’s a dumpster fire. And it will only get worse before it gets better.

Here’s why.

Your Rundown for Wednesday, April 18, 2018…

Tesla’s A Dumpster Fire

It’s been a rough year for Tesla (NASDAQ: TSLA) and their shareholders.

Things were really bad in March.

First TSLA issued a recall of 123,000 Model S vehicles.

Then they fought a rough and tumble PR battle after a fatal crash called their semi-autonomous driving system into question.

Shortly after, TSLA’s credit was downgraded. Moody’s citing the fact that TSLA will have over $1 billion in loans due over the next 12 months, as reported by CNNMoney.

And things are only getting worse in April.

Monday the company announced it will temporarily halt production on its Model 3 line.

In reaction, TSLA shares fell over 3% from $299 at Monday’s open to $287.69 premarket this morning.

For the year TSLA shares are down almost 10%.

Taking to Twitter to air his frustrations, CEO Elon Musk cited “excessive automation at Tesla was a mistake.”

Mistake?

Toyota, Ford, VW, and others have no problem getting their cars on the road using the same automated processes.

Elon can blame automation all he wants, but it’s the poor craftsman who blames their tools.

Elazar Advisor Chaim Siegel, speaking in a Reuters report notes: “I don’t think there is any way they’d purposely want to slow production. It tells me something’s not quite right.”

Not being able to make cars means no sales.

No sales means no cash. No cash means big problems later this year.

According to The Wall Street Journal, TSLA “has $23 billion in total liabilities, including more than $10 billion in debt.

Will TSLA go bankrupt as we joked weeks ago?

Probably not.

But projects like the hyperloop and SpaceX could suffer as money is shifted to cover Tesla’s massive debt.

This morning Bloomberg reported that Elon Musk will move to “around-the-clock production” in order to meet Model 3 production goals.

This means 6,000 cars per week by June, according to a Musk email obtained by Electrek.

We’ll believe it when we see it.

Actually, we just don’t believe it.

Elon’s ego CANNOT be checked. Billionaire geniuses sure are interesting people.

A little humility could do wonders for TSLA.

Under promise and over deliver. That’s what Elon needs to do now.

Or look to China…

More on that later.

Now, turning to the markets this morning…

Market Rundown for Wed., April 18

S&P 500 futures are up 9.75 at 2,716.

Oil’s up $1.14 to $67.66.

Gold’s up $5.10 to $1,354.

Bitcoin still hovers over $8,000. Now at $8,095, according to CoinDesk this morning.

We’ll talk again on Thursday.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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