Tesla — How Da Ya Like Them Apples?

by Jim Woods | September 4, 2013 10:47 am

I love it when critics, haters and those who would second-guess the successful vision of a CEO are proven wrong. Not that I don’t engage is this kind of criticism myself — I certainly do — but when it comes to a select group of companies, it seems like the vitriol is way out of proportion.

Tesla Motors (TSLA[1]) is one of the companies many in the financial press and in the blogosphere like to question. It’s also a company short sellers love to roll the dice on.

Fortunately for Tesla, its shareholders and anyone who has read/followed what I’ve written about the stock over the past couple of years, the critics, haters and second-guessers have been forced to eat a huge plate of rotten crow.

On Tuesday, Sept. 3, TSLA shares closed at $168.94, just slightly below their all-time high of $169. And in case you weren’t keeping score, TSLA shares are up about 22% over the past month, 83.5% during the past three months and more than 500% over the past 52 weeks.

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So, haters … How da ya like them apples?

Now, by apples, I am not just referring to the slang reference. In fact, Tesla actually reminds me quite a bit of another iconic company: Apple (AAPL[2]).

In both cases, there exists a determined group of naysayers that think the company is a fad, and that the stock is bound to head off a cliff at some point. Conversely, in both cases there also is a huge, cult-like following for each company’s products, as well as their respective stocks.

More specifically, Tesla reminds me of the glory days of Apple back when the first iPhone came out, then when the iPad came out. The biggest similarity is that investors poured their money into these two red-hot stocks, sending their respective share prices through the stratosphere. The difference, of course, is that Apple is a mega-profit machine, while Tesla has just recently driven into the green.

Other similarities between Tesla and Apple include the mega-geniuses at their respective helm. Indeed, Elon Musk of Tesla has been compared to Steve Jobs in terms of his vision and determination. I actually think on both fronts Musk might prove to be the more impressive of the two, but history will be the arbiter of that claim. Both companies also brought a “cool” new technology to the market, and both brought their respective technologies to the masses at the right time.

As for the action among traders and investors, my friend, former colleague and options trading guru extraordinaire Jon Najarian agrees with me, pointing out that he hasn’t seen such instinctive contempt for cult-ish Tesla shareholders [3]since the days when Steve Jobs was running Apple.

Regarding TSLA shares, Najarian conceded that he thinks the stellar share price move has gotten ahead of itself. However, as he put it, “I don’t think the shorts are going to be right.”

I completely agree.

If you’re a trader and/or short-term investor who just cannot bring yourself to jump in a Tesla here because it has moved so far, so fast, then I think now is the time to shed your apprehension and get long.

Sure, the Tesla haters might eventually turn out to be right, but until the juice in this momentum play starts to look even a little bit low, the smart money will likely continue to bid this stock higher — and that means more crow served up on haters’ plates.

As of this writing, Jim Woods did not a position in any of the aforementioned securities.

  1. TSLA: http://studio-5.financialcontent.com/investplace/quote?Symbol=TSLA
  2. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  3. instinctive contempt for cult-ish Tesla shareholders : http://finance.yahoo.com/blogs/breakout/tesla-apple-najarian-123705597.html

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