I’ll say this of Tesla Inc’s (NASDAQ:TSLA) former chairman Elon Musk: He always manages to keep his companies in the news.
Forget Home Depot (NYSE:HD), Etsy (NASDAQ:ETSY) or even Shake Shack (NYSE:SHAK) earnings … look how Musk is provoking the SEC yet again, sending Tesla fanboys rushing to his defense.
Supposedly, the story here is Musk publishing yet another ill-advised Tweet. Because he agreed to SEC pre-approval — but failed to run it by his regulators — Musk is likely to get held in contempt of court.
It’s unclear whether Musk realizes that TSLA stock’s Regulation D status is at risk. Although eagle-eyed TSLA watchers are starting to pick up on it:
The most significant fallout from the SEC moving to hold Elon Musk in contempt has not been discussed. It’s nearly certain Reg D waivers granted to $tsla (and other Musk companies) have been revoked. Once again an “ineligible issuer”. Window slammed shut for a unreviewed raise. pic.twitter.com/t76dLjHLkc
— Nikola’s Stache (@BSA19741) February 26, 2019
Nonetheless, TSLA is trading flat on the news. It’s a clear signal from the market: “SEC drama is a non-issue.”
After all, even if you or I decide to dump Tesla stock on news like this, there’s one thing to keep in mind. There are 115 exchange-traded funds (ETFs) with TSLA exposure, according to ETF.com. Not just funds like PowerShares QQQ Trust (NASDAQ:QQQ), either … the biggest holders are actively managed.
And fund managers are not likely to care about all these Elon side-shows. (Which could be why TSLA stock is holding up today, for instance.)
It would take a truly ugly breakdown in the fundamentals to get TSLA dropped from fund lineups.
And as always, it comes down to production.
Well, frankly, if you look back at that tweet … it leaves a little bit to be desired.
Bottom Line on Tesla Stock
Ultimately, this is all happening because Musk is insisting on 2019 production at the upper end of the guidance range: 350,000–500,000 cars.
Why not let his company speak for itself? Again and again, Musk decides to resort to these dramatic displays to prop up a $300 stock.
So, let’s log off Twitter and see what actually lies “behind the curtain.” If Tesla still can’t get its production in gear (so to speak), well … look out below.
As of this writing, Ashley Magnifico did not hold a position in any of the aforementioned securities.
