Is Tesla’s stock performance too good to be true? One analyst is crying foul, alleging market manipulation through aggressive options trading. Despite mounting challenges and declining sales, the stock holds steady. What’s truly driving its value, fundamentals or something more? The answer might surprise you!
Concerns are mounting over the true drivers behind Tesla’s stock stability, as a prominent financial analyst suggests its performance is engineered rather than earned. This critical assessment points to sophisticated options trading strategies as the primary force artificially propping up the electric vehicle giant’s valuation, rather than robust fundamental performance.
Gordon Johnson, a well-known analyst at GLJ Research, has openly alleged that Tesla’s stock, a key player in the tech equities sector, is not trading on its intrinsic value. Johnson asserted on social media that the stock is being “actively manipulated through the options market,” highlighting an unusual resilience despite a barrage of negative news. He posed the question: “Why? Someone is aggressively buying calls.”
Supporting his claims, Johnson cited compelling trading data, revealing a dramatic collapse in Tesla’s put-to-call ratio. This crucial indicator plummeted from 0.85x to 0.67x in a single trading day, strongly suggesting a significant surge in bullish options activity. Despite this alleged behind-the-scenes manipulation, the stock itself closed down 3.50% at $333.87 on that Friday, reflecting underlying market pressures.
Further examination of current options metrics underscores this unusual market behavior. Tesla’s volume ratio stands at 0.61, indicating a disproportionate number of call options being traded compared to puts. Additionally, the implied volatility for Tesla Stock is recorded at 44.88%, noticeably higher than its historic volatility of 40.95%, signaling heightened market anticipation or speculative interest.
Johnson’s comprehensive financial analysis also referenced Tesla’s volatile price trajectory, noting movements from approximately $160 to peaks near $480, with recent stabilization around the $320-$350 mark. This is set against the backdrop of the company’s substantial $1.05 trillion market capitalization and an exceptionally high price-to-earnings ratio of 193.51, raising questions about the sustainability of its valuation without external intervention.
Adding to the company’s challenges, a recent survey involving 8,000 U.S. consumers revealed significant public apprehension regarding Tesla’s Full Self-Driving (FSD) technology. Nearly half of the respondents expressed the belief that FSD should be illegal, with 70% preferring autonomous vehicles to integrate both LiDAR and camera systems, indicating a lack of confidence in Tesla’s current approach.
Moreover, Tesla is facing significant headwinds in key international markets. The company reported a sharp 40.2% year-over-year decline in European sales, totaling only 8,837 units in July. In stark contrast, a Chinese competitor surged by an impressive 225% in Europe during the same period, selling 13,503 units and capturing a 1.2% market share, underscoring Tesla’s eroding competitive edge.
Despite these critical claims of market manipulation and mounting operational challenges, Tesla’s investment strategy appears to defy traditional logic. The stock exhibits strong Momentum at 88.14 and solid Growth at 74.62, with its price trending upward across short, medium, and long terms. This peculiar alignment of strong technical indicators amidst fundamental skepticism highlights the complex dynamics influencing modern tech equities.
