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Jpmorgan came out today and said that they believe Tesla stock will crash this year. The analyst from JPMorgan believes Tesla stock will fall 40% plus over the next 4-5 months. Let’s talk about this!

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JPMorgan Chase analysts believes that Tesla stock is absolutely going to crash through the floor for the remainder of the year. This guy believes that Tesla stock will go down over 40% over the course of the next five months.

Yes over 40% crash in the next five months, guys, we were talking massive. So we’re gonna look at what he has to say okay. And then I’m going to bring out two points. Okay, one more on the fundamental side.

And one more on the technical side on how you could actually get a stock to go down that much okay. And we’re looking at this and how much of a realistic possibility it is out there.

Everything in the stock market is possible at some point in time, right? Everything is possible. But how realistic is this? That’s what we’re going to look at. So hope you guys really enjoy say hit thumbs up if you enjoy let’s get in there.

So JP Morgan, look at the headline JP Morgan predicts Tesla shares will plunge more than 40% before the end of the year. All right, Tesla shares will fold dramatically. The rest of this year due to its high valuation and rising competition.

According to JP Morgan, the firm reaffirmed its underweight rating on Tesla shares saying other automakers may price their electric cars aggressively. All right, they’re gonna price our electric cars aggressively.

The other guys competing in the space so has a highly differentiated business model, appealing product portfolio in leading edge technology, which we believe are more than offset by above average execution risk and valuation that seems to be pricing in a lot.

You know, as Ryan Brink Mark said in a note to clients on Friday, we have highlighted more concerns regarding increased competition, including from automakers looking to use a sale of battery electric vehicles to subsidize their more lucrative internal combustion engine portfolio vehicles from a legal regulatory and compliance perspective.

Rather than trying to generate profit on the sale of these battery electric vehicles in them themselves. Brinkman reaffirmed his $180 December 2018 price target for Tesla shares representing 44% downside from Thursday’s close 44% downside, okay.

And by December he thinks this is going to 180 by December. Okay, that would be quite a substantial move down there analyst is cautious on the company second quarter financial results.

It is slated to report its June quarter results on August 1, according to this website. Tesla said on July 2 that it had reached a one week production goal of 5000 model three cars during the last week of June.

This is coming from the analysts now we continue to be concerned that the free cash flow has a potential to be a larger outflow given the fact that the much heralded production rate improvement he said.

Additionally, we worry about margin given the potential for overtime premium freight and other expenses employed to ramp production in a seemingly inefficient manner. He says Tesla didn’t respond to comment. Okay.

So what I want to talk about now is I want to talk about the fundamental point he brings out and then I want to talk about like a 40 plus percent downside move in five months, like how realist realistic is that? Like, how could that potentially happen? Okay, so in the simplest terms.

He believes that Tesla Tesla demand will fall because other guys okay, the competitors compete on will compete on price, okay, and they’ll be willing to lose more and more money on their cars, which will make their sales go up, which will make Tesla sales go down.

That’s the simplest point he brings out. Okay. That’s his fundamental point. Now that we got to keep a few things in mind with this, okay. The first is the competition, the if you want to call them that the other players in this game.

They’re all already losing lots of money on electric vehicles. Okay, so they’re already taking big losses in this game, all right. They’re all taking big losses. As of now. Also, we know they have hardly any demand.

For instance, the Chevy Bolt, which was supposed to be the Tesla killer, is being outsold about six to one in North America by the Tesla Model three, and the model three hasn’t even ramped in a major way yet. Okay.

And they’re already being outsold by about a six to one margin. All right. So that’s a massive, massive, massive difference there. Okay, so these guys are already taken big Al’s how much money are they willing to lose per car.

Are they willing to lose 10,000 per car? Are they willing to lose 20,000 per car, okay, these losses are getting big for the companies and if there’s demand starts going up, and they’re taking these massive losses.

Eventually it’ll start affecting their actual numbers that they these companies report, okay, if their sales were to actually go up because of this, all right. Think about this from a perspective of these companies refuse to really get on the electric wave and take electric vehicles and autonomous driving seriously up until the last like year.

Okay. Most of these guys have been laggards. You know, when Tesla was focused on the stuff in the last 510 years. These guys have just started getting focused in the last year. year two.

You’re going to tell me these guys that have pretty much no long term vision to their businesses are all of a sudden going to get a super great long term vision and be willing to take 10 $20,000 losses, each car sold.

I’m not convinced of that. Okay. All so that’s not even the biggest point. That’s just one of the points. Okay. Tesla, the fact is Tesla demand is through the roof. Okay, we know that there’s no question about that.

Here’s the thing, okay. Just because a competitor wants to lower prices on whatever they’re selling does not mean the demand for someone else is going to fall. Okay? If my iPad breaks right now, if my iPad breaks right now.

I’ll be down to the Apple Store within an hour or I’ll order one online within an hour, okay, I’ll order a new iPad within an hour. Think about that. From the perspective there are, there are hundreds, hundreds of companies that make a tablet of some kind.

The majority of which are far cheaper than this iPad right here. I’m gonna go in some other crappy tablet, some Android tablet, whatever, and be like, Oh, I can save some money here.

No, I’m going to get my iPad if my iPhone breaks. I’m going to the Apple Store and getting a new iPhone right now. Okay. When I go I go to In and Out Burger. Okay, you know how many discount burger places I pass I pass at least one McDonald’s on the way there.

I pass Burger King, I passed Wendy’s past jack in the crack. I passed so many burger places on the way to in and out. And they all have burgers that are cheaper than than now I want in and out man I want in and out if you want something.

If you want something, you’re going to get it. Okay? If there’s the demand out there for a product, people are going to pay up for that product. Okay, if there’s demand for it doesn’t matter if it’s an iPhone.

Or a car or anything across the board, if people are willing to pay up for it, it’s because it’s a better product in the end. Okay. So until the competitors come out with a product, that’s any that’s even close to.

You know, as competitive as the the model three is, in terms of looks in terms of style, in terms of interior in terms of everything you can go into, across the board, okay, that excites somebody about a model three versus a Chevy Bolt, which my goodness.

You couldn’t catch me dead in one of those cars at all. If you didn’t see me in one of those. It’s probably because I’m dead. Because I would never drive a Chevy Volt like holy smokes.

Like I’m sorry, if you drive a Chevy Bolt, like, straight, I feel bad for you, man. That’s very disappointing. So that’s the first point. That’s the fundamental case right there. Now this guy’s talking about 40% plus downward move for the stock over the next.

You know, let’s say five months, okay, five months, and we’re talking about a 40% plus downward move. Wow, wow, that would be a big move. So you need two things to happen. Okay, you need buyers to dry up in a real way.

I’m talking about buyers for Tesla stock. Okay, so you would need, you know, people just to not be interested in Tesla stock buying more shares of Tesla stock. All right. Which is a pretty hard thing, because we throughout Tesla’s history.

That there’s never been buyers that have dried up, like there’s always more and more people investing more and more money. And I’m what I’m talking about. Now, I’m not just talking about the retail inside the average investor.

I’m talking about big fund managers. All right. So to get all the buyers to say, we’re not interested in buying Tesla shares anymore, you know, it’s possible, but it’s pretty unlikely. The more even more unlikely thing.

If you’re going to get a 40% plus drop in a sock in a very short amount of time like that five months, you’re going to need huge, huge investors to sell off their shares what this is possible.

But here’s the thing, why would huge investors sell off their shares? Okay, people are invested in this company, because they believe they’re going to be huge in auto and autos. And they’re going to be huge in energy. Okay.

And given and what why would anybody sell out a Tesla shares? If you’re in the stock for the long term? Like, like, why like, okay, let’s say, let’s say they’re not able to keep a 5000 production rate and goes down to 4000.

Like, do you think that’s going to magically make all these big fund managers that are super bullish on the stock be like, Oh, they didn’t quite hit that number there. So we don’t want to own the stock anymore.

No, these guys, these guys and gals that have invested hundreds of millions of dollars, or even billions of dollars into the company, they’re playing this for a long term out future, okay, they’re playing this for a long time in the future.

They’re not just like trying to trade it around and be like, Oh, they missed that number over there. Let’s just sell the stock off. Okay. So all things are possible in the stock market? Can a stock go down? 40%? In five months? Yeah.

I’ve seen it done a ton of stocks before. But is it the most realistic thing? I would say? Probably not, okay, probably not, you’re gonna need buyers to dry up for Tesla stock, and you’re going to need mass selling from institutions and huge fund managers and whatnot.

And why they would just be willing to sell out their shares wouldn’t make much sense to me at that point in time, okay. You have a lot of demand for Tesla shares. So if it was even go down under 300, what we have seen is that it just.

You know, goes right back up over 300. Okay, as soon as it drops down, it just goes back up. These types of stocks have long term plays, it’s hard to get them down, okay, which is same reason I won’t short some of these other companies that I’ve talked about in the past.

That I believe are overvalued, although a lot of these companies, I won’t dare short them, because it’s so hard to get their stock prices down because there’s so much belief from big fund managers out there.

That these companies are gonna be huge in the future that they don’t care. About short term result Netflix Netflix missed by you know 50% on what their subscriber numbers going to be in North America and what based upon that number the stock should have been down 20 plus percent the next day the stock fell 5%.

Okay it fell 5% in a day when it probably should have been like I haven’t seen a miss that bad in a long long time in the stock market they missed by 50% on their subscription subscriber number and they miss bad internationally.

I’ve It’s been a long long time since I’ve seen a number that that in the stock fell 5% Okay, only 5% that’s like hardly anything okay, so these types of stocks that have huge growth potential in the future they’re hard stocks to get them to go down in a major way.

It’s possible is possible anything out there as possible I’m just saying it’s pretty unrealistic you need buyers dry up and like like like the fundamental case Oh, Chevy Bolt let’s say they dropped their price or whatever competitors are out there right.

They drop their price what’s gonna make somebody go get that car you know what I mean? Like Like, like in and outs packed every damn day okay, that drive thru is like a mile long and I got to wait in the Wendy’s drive.

Thru is is available right and the Burger Kings got nobody in in the jack of the crackers got nobody in and I could just go right up there and get a burger for cheaper and go in and out. Man.

It’s a it’s a supply and demand economy. And sometimes I think these analysts forget about the supply and the demand and when a company has a demand, it’s hard to beat them and ask the guys that compete against apple.

How many guys have come in? No, they’re gonna be the apple killer. They’re gonna be the iPhone Killer. Anybody that’s fold electronics and technology last decade there was a fucking to have $1 for every time I saw I read an article in my life that said this is iPhone Killer.

This is iPad killer. This is a Mac killer. And whatever ended up happening all Apple did was grow and grow and grow and get bigger and bigger like it is what it is guys. It’s all about where the demands out and it was hope you guys enjoy this.

I want to know your opinion in that comment section. Do you believe the stock will fall 40% over the next five months? Do you believe it will rise 40% Do you believe it will be a stagnant stock I would love to hear from you guys as always in the comment section. Thank you for watching. Have a great day.

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