Here’s the skinny on Nikola ($NKLA) and Tesla ($TSLA). Bears are not allowed to watch this video. (September 14, 2020)
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I want to talk about two of the cars that don’t run on gas. One of them that actually works, the other one that doesn’t, apparently. But both of them have, actually, wheels that go round and round. We are going to look at Tesla ( NASDAQ: TSLA ) and Nikola ( NASDAQ: NKLA ).
I know that some of the things that I say here about Nikola ( NASDAQ: NKLA ) will have some of you clutching your pearls. I get that, I apologize for that, I urge you to find help, you are not going to find it here; Nikola ( NASDAQ: NKLA ) is a fraud. It is Theranos without the drops of blood.
Tesla ( NASDAQ: TSLA ), on the other hand, is not a fraud, their cars actually work. As you know I have issues with the company and this and that, not with the stock though, not at all. So let’s look at the two.
Nikola ( NASDAQ: NKLA ) has been the poster child for fast trading, through caution to the wind. Risk, what risk? That’s a board game. There is no such thing as risk in the market, stocks just always go up; and so we have seen this with Nikola ( NASDAQ: NKLA ). However, since this day, this was last Tuesday, the stock fell. Again, from Tuesday’s close the stock fell, like, down to $32.00, about 32 percent or so and then ultimately almost 40 percent; it fell in just a few days.
So today it comes out that this Hindenburg Research, they posted an article, and hopefully you have seen it, if you are trading this stock you darn well better read every bit of it. Basically, the company is a fraud. They towed one of their trucks up to the top of a hill, put it into neutral, and then let it coast down the hill while videotaping and said that it was powering itself.
Now, I can hardly think of a better way to commit fraud than that. I think there are a few of them, if you want to Google Gina Champion-Cain Ponzi you can find the latest really clever Ponzi scheme that is going to wind up putting people in jail; that will be a hoot for you, I know some of those people, they are not my friends. But with this one, this is a Ponzi Scheme, it’s not a Ponzi Scheme it’s just a fraud based on BS.
The only thing that this thing runs on is, literally, bull feces, So the fact that this was released this morning and the stock, at one point I think was down over 10 percent but then it closed higher. Here is what you need to understand; this is not like, oh, somebody knows something, oh, I have got to get in on that; somebody knows something, I have got to buy. No, if you are buying you are either short covering or you are a fool; if you have any belief in this.
This stock could stay above 30.00 for a while. It could stay above 30.00 until the end of the year, I don’t know. I just know that stocks are unavailable to borrow. If you want to short Nikola ( NASDAQ: NKLA ) you basically have to buy puts or sell calls; and the implied volatility is literally in outer space. So this is a stock that I think you have got to avoid at all costs. I have told you the story on the company itself, now I am just talking about the stocks. And for all I know, this Hindenburg Research faked everything themselves, that’s the fake story.
And this guy, I forget his name, I will read about it when he is in an orange jumpsuit, he could be totally telling the truth on all of this stuff. I don’t know and don’t purport to know. I am just telling you this, there is a huge difference between the fortunes of the company and what the stock is doing and you need to understand that. Your desire does not entitle you to different facts.
And so I think the company is really in trouble, the stock, however, is not. And the reason it’s not is that there is a ton of what I call built-in buyers for the stock. They have to buy the stock because they are short. And if they have recently shorted then they are looking at each other going, crap, I want to buy before this guy does. Is anybody buying because I am hoping the stock goes down so I can cover lower, crap, I have got to buy this stock and get out of my short?
That’s the kind of dynamic you are going to see in this stuff. It happens all of the time; that’s the kind of dynamic that has caused Tesla’s ( NASDAQ: TSLA ) market cap to skyrocket, it just has. Speaking of which, I was really surprised that Tesla ( NASDAQ: TSLA ) wasn’t up much, much more. It’s up 14 percent but like 7 points of that is after hours. I don’t know why the stock is up after hours, it’s probably due to an upgrade or something or maybe it’s just people are still buying.
I won’t say Tesla ( NASDAQ: TSLA ) is a screaming buy here because it’s not, it’s a little bit late in this. I think if you wanted to be aggressive on Tesla ( NASDAQ: TSLA ), this would have been where you are in with a stop; you could get in with a stop that is a little under 10 percent. Now Tesla ( NASDAQ: TSLA ) is really off to the races, but my bet is that it is likely to touch 500.00 before it touches 400.00. I could be wrong but that’s the way I am playing it.
So I think Nikola ( NASDAQ: NKLA ) issues have a huge positive impact for Tesla ( NASDAQ: TSLA ) and I am looking for the stock to continue higher. And also, remember that they have got the whole battery day reveal on the 22nd, where they are supposed to be revealing the million-mile battery.
Now, if it turns out that they announce that they are developing a million-mile battery with Trevor Milton then you are probably not going to want to buy this stock. But I think the stock probably just continues to rise into that event next week. I just don’t think that anybody would be selling it aggressively between now and then. So I think there’s your trade, you are in on Tesla ( NASDAQ: TSLA ). You are not in on Nikola ( NASDAQ: NKLA ) unless you are doing a day trade.
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