If you woke up this morning and noticed that your favorite OTC stock was not trading, nor had market makers showing on Level 2 trading platforms, you are not alone. It looks as though the entire OTC Markets is experiencing a data overload issue early in trading Thursday.
This comes on the same day that the Twitter IPO is set to commence. Although likely unrelated, it is interesting the timing of the trading issues with the OTC Markets as Mortgage behemoths Fannie Mae and Freddie Mac reported profitable quarters and are expected to pay the US dividends of $8.5b and $30.4b respectively.
At the time of this post, there was not any information available on the OTC Markets website to further explain the technical issues this morning. Stay tuned...
Thursday, November 7, 2013
Wednesday, November 6, 2013
Thoughts on Tesla Motors Share Price
Tesla Motors reported earnings today and the companies stock price continued it's descent since the 52-week high on September 30th of $194.50. The stock has lost nearly 25% since its 52-week high.
For those that read financial message boards, analyst reports, and even tweets about the company, the overarching sentiment is that the companies share price is substantially inflated. As it stands, the companies Market Cap of $18.5 billion puts it trading at a multiple of 11 times it's current sales. Today the company reported quarterly sales of $430 million suffering a loss of $38 million.
For a quick comparison of what other car manufacturers trade at, let's look at GM and Honda both trade at 30% of sales and 70% of sales, respectively. Thus, the 11 times sales for Tesla has likely inflated the companies valuation. Based on the competitors, the multiple should be substantially lower for Tesla, but since Tesla has tremendous growth potential don't expect them to trade the same multiple as these establish brands (just yet anyways).
It is likely the current trading has been on expectations for the companies future. They are building a solid brand and the company has experience tremendous demand for their Tesla Model S cars. Thus, the company has the basics in place to continue with their rapid growth. However, until the company can meet this demand by building the necessary infrastructure, the companies stock price is likely to continue to decline as this infrastructure will likely lead to losses over the next few quarters.
After seeing the recent price decline and trading action for Tesla, what are your thoughts on the future? Where will the bottom be for this stock price? Please share your thoughts.
For those that read financial message boards, analyst reports, and even tweets about the company, the overarching sentiment is that the companies share price is substantially inflated. As it stands, the companies Market Cap of $18.5 billion puts it trading at a multiple of 11 times it's current sales. Today the company reported quarterly sales of $430 million suffering a loss of $38 million.
For a quick comparison of what other car manufacturers trade at, let's look at GM and Honda both trade at 30% of sales and 70% of sales, respectively. Thus, the 11 times sales for Tesla has likely inflated the companies valuation. Based on the competitors, the multiple should be substantially lower for Tesla, but since Tesla has tremendous growth potential don't expect them to trade the same multiple as these establish brands (just yet anyways).
It is likely the current trading has been on expectations for the companies future. They are building a solid brand and the company has experience tremendous demand for their Tesla Model S cars. Thus, the company has the basics in place to continue with their rapid growth. However, until the company can meet this demand by building the necessary infrastructure, the companies stock price is likely to continue to decline as this infrastructure will likely lead to losses over the next few quarters.
After seeing the recent price decline and trading action for Tesla, what are your thoughts on the future? Where will the bottom be for this stock price? Please share your thoughts.
Monday, November 4, 2013
SAC Capital Advisors Pleads Guilty: 7 Years Is Way Too Long
SAC Capital Advisors today plead guilty to insider trading. This is music to my ears! This has been known for several years and the SEC, as usual, is too slow to react.
This recent case opens the possibility that he, Steven A. Cohen, may be held personally liable.
This recent case opens the possibility that he, Steven A. Cohen, may be held personally liable.
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