There have been many bad stories about Tesla, its bad Q1 performance, its battery burnout after crashes, the ongoing trade war, the unstable pricings, the cost issues and the list can go on. The price of Tesla stock has been almost halted and it seems it is unlikely to see a bounce back in the near future. If the investors lose their confidence in Tesla completely, Tesla can inevitably end up with filing bankruptcy.
When investors invest in Tesla, they are attracted by Elon Musk’s innovative idea which can boost the share price. Tesla is a company which is burning lots of cash every day, it needs to continuously get cash from its investors until it can reach sustainably profitability. Tesla has to make itself attractive to investors and the share price is one important factor for attracting investors. When the share price drops to a lower price, it can make some investors lose their confidence in Tesla while attracting those who still have faith in Tesla to buy more stocks; however, a fast drop can only make investors lose their confidence. What Tesla really needs at this moment is stabilising its share price and rebuilding their investors confidence. This is why Elon Musk announced his ambition in the taxi business. Tesla really needs just one piece of good news to rebuild its investors confidence and stabilise its share price.
Buying or holding Tesla stocks is an extremely risky investment. The probability of Tesla heading to bankruptcy is not low as Tesla still needs to burn their investors’ money and the fast dropping share price can potentially cut off Tesla’s life support. However, it doesn’t mean there is no chance for Tesla’s comeback, one quarter’s good performance may be able to overturn the situation.
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