Tesla’s stock is forming a bubble and new buyers should buckle up for a crash.
MarketWatch.com reports: “Tesla is a bubble that is going to pop.” That’s the headline of a column I wrote in early February — and I’m repeating that prediction now. To be sure, I have no expectation that this forecast will come to pass quite as quickly as it did after my early-February column. Over the six weeks following its publication, shares of Tesla TSLA, +10.78% dropped almost 60% in a plunge that admittedly was caused in large part by the coronavirus pandemic-induced bear market. COVID-19 had nothing to do with my forecast then”.
“This is not the case for Tesla. But there may be another factor that just as effectively discourages the shorts from betting against Tesla: the stock’s extraordinary volatility. “ Tesla’s stock — even if it does well over the long-term — is now too far ahead of itself. ”