Morgan Stanley Implies $TSLA is Entering a Death Spiral — SHARES FUCKING PLUNGE

Hahahaah, where are the MuskFAGS now? Do you see the share price? Let me show you, for those without quotes.

BAM!

An analyst at Morgan Stanley is very bullish on the stock, but also warned today that the recent spate of bad luck for the stock might, in fact, beget even more bad luck. While some of you retarded one’s out there might discard that statement as pure folly, or perhaps insignificant. But for those of us on Wall Street with brain, we know damned well what it means. The firm is implying TSLA might be entering a fucking death spiral, one that worsens as the shares decline. One that is accentuated by its debt/eq levels which has been the cause of innumerable bankruptcies over the years.

“A sharp drop in Tesla’s share price in part reflects questions on Model 3 ramp … an event that directly impacts both the company’s near-term cash needs and ability to potentially access the market for capital,” analyst Adam Jonas wrote in a note to clients Wednesday. “A lower share price begets a lower share price… For a company widely expected to continue to fund its strategy through external capital raises, a fall in the share price can take on a self-fulfilling nature that further exacerbates the volatility of the share price.”

That’s code talk for get your share price up, or see it trade directly to zero.

Then the analyst shills for Musk, likely forced by gunpoint by Morgan upper management to retain good relations with their client, saying it might be a good time to step in and buy some TSLA, in spite of it being ‘very high risk.’

“We think that we are looking at one of the buying opportunities that many investors have been waiting for,” he wrote. “We’d use further weakness from here as an opportunity to build an Equal-weight position in the stock … We see Tesla as modestly undervalued with very high risk.”

The fuck?

On a related note, a small hedge fund manager, with symptoms of a brain injury, thinks TSLA is ‘months away’ from bankruptcy. He’s betting on it too, shorting TSLA with ruinous implications.

Unless Elon Musk “pulls a rabbit out of his hat,” Tesla will be bankrupt within four months, says John Thompson of Vilas Capital Management.

“Companies eventually have to make a profit, and I don’t ever see that happening here,” he told MarketWatch. “This is one of the worst income statements I’ve ever seen and between the story and the financials, the financials will win out in this case.”

“Tesla, without any doubt, is on the verge of bankruptcy,” he told clients in an email over the weekend. He explained that funding will be hard to come by in the face of problems in delivering the Model 3, declining demand for the Model S and X, extreme valuation and a likely downgrade of its credit rating by Moody’s from B- to CCC.

“As a reality check, Tesla is worth twice as much as Ford [estimate of the enterprise value of both companies], yet Ford F, -0.09% made 6 million cars last year at a $7.6 billion profit while Tesla made 100,000 cars at a $2 billion loss,” Thompson said. “Further, Ford has $12 billion in cash held for ‘a rainy day’ while Tesla will likely run out of money in the next 3 months. I’ve never seen anything so absurd in my career.”

From Moody’s credit downgrade today.

Tesla’s liquidity consists principally of $3.4 billion in cash and securities at December 31, 2017. The company also has moderate availability under the $1.9 billion ABL facility. This liquidity position is not adequate to cover:

1) the approximately $500 million in minimum cash that we estimate Tesla must maintain for normal operations;

2) a 2018 operating cash burn that will approximate $2 billion if Tesla maintains high discretionary capital expenditures to increase capacity; and

3) convertible debt maturities of approximately $1.2 billion through early 2019. These cash needs will likely require Tesla to undertake a near-term capital raise exceeding $2 billion. Moreover, if the company maintains its expected pace of expansion, it will likely need to raise additional capital during the second half of 2019.

Tesla’s rating could be lowered further if there are shortfalls from its updated Model 3 production targets. The rating will also be pressured if the company is unable to raise sufficient new capital to cover its late-2018 and early-2019 convertible maturities, and to cover the operating cash consumption that will likely continue into 2019.

The rating could be raised if production rates of the Model 3 meet Tesla’s current expectations and if the company maintains good liquidity.

Elon Musk – Trippin' Balls

RELATED: Hitler finds out he’s invested in TSLA 2025 senior notes.

We all walked into today’s session cow-eyed, hoping that President Trump’s great big assed stock market could defy the odds and lift higher. After yesterday’s abysmal session, I looked forward to today, but no more. All I see around me is sheer bleakness, marked by trade wars and an orange hue around the White House — which is a carousel of fuckey on a scale unseen since the days of the Mad King George III of England.

Tech stocks are being absolutely poleaxed in a most harrowing manner. My SOXL has boxing my face off, almost as much as my LABU. Fortunately, I’ve got a runner in GEVO this morning, which is partly offsetting the losses. But that’s a small position and the meat and potatoes of my larger account, the quantitative one, is getting RAPED by 0.8% now. It is no different from being trapped in a horror house with door knobs that spin and spin and spin, but do not let the door open.

I am trapped lads and I cannot get out. Maybe I do not want to get out. Maybe, just maybe, my fatalism is in fact real and all of what you thought was a facade is actually real — an unhinged forty one year old man armed with an Orbital Space Cannon (OSC) — designated for ‘offensive purposes only.’

Here is the shakedown.

Due to Trump’s mental ailments, shares of AMZN are Mcplunging lower — which is probably upsetting for Mr. Bezos — a man who we all love and admire for his Amazonian ways. NFLX is also lower in a horrible way. The FAANG sector, representative of an appalling $2.94 trillion in market capitalization, is off by another 2%. A great big dick is raping the tech sector now and there is nothing Tim Cook can do about it, other than gawk and leer at the spectacle of it all.

On the upside are REITs and services, led by department stores, drugs, and a sundry of consumerism idolatry.

Let it be known, this battle isn’t finished and Le Fly will exact his revenge. It will be grande and numerous and also terrible. You will rue the day you bet against me. In a most unfortunate series of events, I will end up kicking your head around like a soccer ball. Taking the Nasdaq down another 50 is a very, very, serious charge, one that I hope you are ready to answer for.

Good day.

What the fuck is wrong with Kim Jong Un? Doesn’t he know the second he gives away his nukes is the second US Blackhawk helicopters fly into his capitol city to take him out? Apparently, he’s willing to negotiate the destruction of his nukes, only after both S. Korea and America give him some shit. I’m guessing this is more 3-d chess by the N. Korean leader.

“It is our consistent stand to be committed to denuclearisation on the peninsula, in accordance with the will of late President Kim Il Sung and late General Secretary Kim Jong Il,” Kim Jong Un said, according to Xinhua.

North Korea is willing to talk with the United States and hold a summit between the two countries, he said.

“The issue of denuclearisation of the Korean Peninsula can be resolved, if South Korea and the United States respond to our efforts with goodwill, create an atmosphere of peace and stability while taking progressive and synchronous measures for the realization of peace,” Kim said.

In other news, our President reportedly “hates” Amazon; but I’m sure you’ll think that’s more fake news.

Via Axios:

Capitol Hill wants Facebook’s blood, but President Trump isn’t interested. Instead, the tech behemoth Trump wants to go after is Amazon, according to five sources who’ve discussed it with him. “He’s obsessed with Amazon,” a source said. “Obsessed.”

What we’re hearing: Trump has talked about changing Amazon’s tax treatment because he’s worried about mom-and-pop retailers being put out of business.

A source who’s spoken to POTUS: “He’s wondered aloud if there may be any way to go after Amazon with antitrust or competition law.”

Trump’s deep-seated antipathy toward Amazon surfaces when discussing tax policy and antitrust cases. The president would love to clip CEO Jeff Bezos’ wings. But he doesn’t have a plan to make that happen.

Behind the president’s thinking: Trump’s wealthy friends tell him Amazon is destroying their businesses. His real estate buddies tell him — and he agrees — that Amazon is killing shopping malls and brick-and-mortar retailers.

Trump tells people Amazon has gotten a free ride from taxpayers and cushy treatment from the U.S. Postal Service.
“The whole post office thing, that’s very much a perception he has,” another source said. “It’s been explained to him in multiple meetings that his perception is inaccurate and that the post office actually makes a ton of money from Amazon.”

Axios’ Ina Fried notes: The Postal Service actually added delivery on Sunday in some cities because Amazon made it worthwhile.

Trump also pays close attention to the Amazon founder’s ownership of The Washington Post, which the president views as Bezos’ political weapon.

Very nice. I’m so glad I voted for him.

Dow futures are +100 and the Nasdaq is flat. You could tell the market is gonna tank. It just has that tankish feel to it. Both gold and WTI are off by 0.7%.

Here are some other headlines.

I can’t remember the last time the FAANG (FB, AAPL, AMZN, NFLX, GOOGL) basket fell by 10% in any time frame; but here were are now, off by nearly 10% and people are freaking out.

We’re looking at a two week time frame here, a period that presided over the destruction in many high profile names.

Here are some other stocks that took major L’s in the past two weeks.

TWTR -23%
SOHU -14%
BIDU -11%
NTES -11%
ORCL -13%
MU -12.4%
AMD -12.2%
CRM -11.3%
SNAP -10%
DB -10.5%
WFC -10%
OSTK -22%
CENX -21%
OLED -16%
MELI -13%
NVDA -9.4%
SHOP -12%
TEAM -10%
X -12.3%
GIS -12.7%
W -21%

The list goes on and on. It has been a blood bath. Overall, the SPY is off by 5.6%, Nasdaq -7.6%, while utilities were flat, gold +1.4% and TLT +0.6%.

The leadership of the market has been damaged. The high risk assets torn to shreds, leaving only whispers of encouragement for traders to cling onto. Most, including myself, are only long because buying dips has been a winning strategy. Plus, Exodus has a pretty good track record of timing bottoms.

Question of the night is: is this time different?

ADDED BONUS: Cryptos are crashing. BTC is $7,800, ETH $449, and LTC $136 -10%.

Big Brother is peering over your shoulder and is one day going to toss you into a cold, damp, cell for saying the word “motherfucker.”

Here’s Microsoft, in the latest salvo of big tech testing the totalitarian waters, banning foul language for already degenerate gamers. GOOD LUCK with that.

“Don’t publicly display or use the Services to share inappropriate content or material (involving, for example, nudity, bestiality, pornography, offensive language, graphic violence, or criminal activity).”

“In the Code of Conduct section, we’ve clarified that use of offensive language and fraudulent activity is prohibited.”

What’s also noteworthy is a little disclosure on the bottom which said they “reserve(s) the right to review Your Content” when it’s “investigating alleged violations of these Terms.”

HAHAHAHA.

MSFT is getting Donkey Punched, but not because Hitler is running the company, but because the Nasdaq is getting fucking destroyed.

The violence of this downturn has just about negated all tech gains enjoyed during yesterday’s record session. This is the reason why I chose SPY for quantitative buys over QQQ.

Bonds have become a safe haven once again, and rates are dropping.

There is nothing particularly remarkable about today’s decline, other than the suddenness of it. First it started with some semis and some oils. The Dow diverged and kept gains. Now both Dow and Nasdaq are sharply lower and people can’t stop talking about NVDA.

NOTEWORTHY: My ‘Bubble Basket’ consisting of traditionally expensive stocks is off by 4% to new YTD lows. And, my social networking index is getting spear’d — thanks to the heart attack drop in TWTR.

Utes and REITs are bucking the trend, typical of a risk off tape. My sense, people have the jitters over the crackdown in tech and have tossed in the towel. This too shall pass. I am still boolish on this move and will hold my positions until nearly next week.

Shares of NVDA are sliding after confirming that Uber fucked up one of their product lines.

Nvidia Corp said on Tuesday it will suspend self-driving tests across the globe after Uber Technologies Inc fatality last week, according to a source at the GPU conference in San Jose, California.

The chipmaker is testing self-driving technology globally including in New Jersey, Santa Clara, Japan and Germany.

Last week, Uber suspended North American tests of its self-driving vehicles after one of its self-driving cars killed a woman in Arizona.

Update: Nvidia tells CNBC that it is "temporarily suspending the testing of [its] self-driving cars on public roads to learn from the Uber incident" https://t.co/6EUbCjII3f pic.twitter.com/QJdAN3ylBz

— CNBC Now (@CNBCnow) March 27, 2018

Self driving cars will happen, so this is merely a pit stop.

On the whole, however, tech stocks are sucking wind. Also, shares of TSLA are getting bitch slapped again, now off by 16% over the past month. Who’s buying?

Here are some noteworthy losers in tech: OSTK, ADBE, TSLA, NVDA, NOW, FB, NFLX, AMD, and of course TWTR.

Chinacoms are pulling in too, led by NTES, WB, YY, VIPS, and HTHT.

The Dow is +200, Nasdaq -15.

Normal day after melt up action. Eat more sandwiches.

While I appreciate the service Dropbox provides, it’s a wild piece of shit high tiered valuation boondoggle that is bound to ruin shareholders for at least 2 years, a la Shake Shack. Underwriters, led by Goldman, stole from people by IPOing it at 11x sales.

The company is now trading with an ~$12b market cap, with just $1.1b in annual sales. Moreover, they’re only growing at 31% per annum.

Enter PSTG, another MUH cloud storage play, catering on an enterprise scale. She’s trading at just 4x sales, sporting annual growth of ~40%.

How about we meet halfway, at say 7x sales? Works for me.

In terms of the tech sector, here is the OB/OS oscillator in Exodus for tech. As you can see, we’re nowhere close to overbought. Feel free to keep buying.

I’m actually happy that Facebook abused their power by helping elect Blonald Drumpf this past election. For years I’ve been saying the socials were bastard son of a bitches, stealing our data, spying on us like cocksuckers — just like so many of you. But the average Joe was oblivious and continued to post everything on the Facebook, like retards.

Thanks to the election of a gigantic Orange Ape, all of that has changed. A new era of angry citizens demanding that Facebook be punished for helping elect an Orange Ape is upon us.

Citron is out with a short call on Twitter, reminding people that Twitter, like Facebook, is a fucking bastard. Come to think about it, had it not been for Twitter, none of John Podesta’s salacious emails would’ve been shared by millions. If none of John’s emails were shared, then it is very likely Drumfled Stilzken would never have been rigged into office.

Citron:

Alongside Facebook and Google, Twitter is now being hauled in by Senate Judiciary Chairman Chuck Grassley (R-Iowa) to a hearing on data privacy on April 10.

Wait until the Senate finds out that:

Twitter Will Generate $400 million THIS YEAR, by just selling user data. Not advertising.

How important is Data Licensing to Twitter? The Scary Answer

In 2017, ad revenue declined to $2.11 billion from $2.25 billion in the prior year while data licensing revenue grew to $333 million from $282 million in the prior year.

TWTR CFO Ned Segal on Q4’17 earnings call last month that data licensing is “a really high margin business”. TWTR generated $333 million in data licensing revenue in 2017.

If we assume 100% margin, this segment accounts for almost 80% of total profits.

Twitter makes this money from selling user data even from private messages — and yes a lot of “dick picks”. To see the underbelly of Twitter just watch this undercover investigation done by James O’Keefe and other Project Veritas reporters.

Dynamics Are In Place to Short Twitter

Twitter’s valuation gap with FB and GOOGL has widened to largest spread ever. On 2018 P/E (ex-cash), FB and GOOGL trade @ 16-17x vs. TWTR @ 50x.

Over the last year, insiders have sold/surrendered almost $300 million of stock. The last time there was this much insider selling was in 2015 when the stock was $50 and then preceded to fall to $14 over the next year.

Short interest is at all-time lows at 4.6%

Acquisition by another party is far less likely until these companies clean house with regard to privacy concerns and selling user data.

Shares are getting REKT — down by 5%.

Markets are Yellen-Soft early going. That’s what happens when the day prior it rampages higher by 650 you fucking brainlets. Do yourselves a favor and walk away from the desk. I can sense you’re about to make a slew of errors. Speaking of which, one of my positions, PUMP, dove lower after posting earnings. Since I have no interest in being attached to the name, I sold it for a loss today.

My approach is somewhat long-tailed here. I understand we can pull in a few hundred from present levels and I also know there might be some shortable trades. But all of that is a waste of time, when I know for a fact equities will be higher one week from today. Ergo, and this goes without saying, I will increase my positions should the opportunity arise. I am looking for exposure into oil, and can only hope for a bastard drop in prices before I get in.

Truth be told, this is a rareified market and there’s nothing holding it back from ripping higher again. Get your macro exposure first, via ETFs, and then figure out the individual stock ideas.

Top picks: SOXL, SPY

Isn’t it funny how no one talks about the cryptos anymore? I haven’t logged into my SHITCOINS account in weeks and couldn’t care less. The way I see it, everything is lost. The entire account is destined for the shit-heap of time, a time capsule when society was enamored by the glitz and glamour of creating something out of nothing and getting rich by accident.

Early going, Nasdaq futures are +63. I intend to make a great deal of money here and will not apologize for it. You should know that you were all well informed of the future and had every opportunity to follow me into highly profitable positions. I asked that you write them down and perhaps remind me of them in the not-too-distant-future. I hope that you’re still paying attention.

Brent is above $70 this morning, on pace for higher prices into the driving season. I cannot wait until crude is above $100 again and all of Trump’s middle eastern friends are rich enough to buy his top dollar penthouses. If there’s one sector that is unrepresented in the S&P it is oil exploration and drillers. If oil is truly going back to $100, there is lots of money to be made in the group, especially in the frackers.

Here are some other headlines this morning.

LFIN -19% (continued weakness; to be removed from the Russell Indexes on March 28)
OSTK -8.7% (to offer 4 mln shares of common stock)
NVTA -6.4% (commences $50.0 mln common stock offering)
LAND -6.3% (to sell shares of its common stock in an underwritten public offering)
GERN -6.2% (cautious article from biotech blogger Adam Feuerstein)
LMRK -3.3% (commenced offering of Series C Floating-to-Fixed Rate Cumulative Perpetual Redeemable Convertible Preferred Units representing limited partner interests)
AUPH -3.3% (filed amendment to short form base shelf prospectus initially filed in January)
MGNX -3% (commences 4.5 mln share common stock offering)
BFAM -1.3% (priced public offering by certain of its stockholders of 4,606,062 shares of its common stock at $102.70/share)
GIS -0.9% (proposes public offering of $1 bln in common stock in connection with pending acquisition of Blue Buffalo Pet Products; files debt securities and common stock shelf offering )
Texas Instruments upgraded to Neutral from Underperform at Longbow
Canadian Solar downgraded to Underweight from Neutral at JP Morgan
China Unicom upgraded to Overweight from Underweight at Morgan Stanley
Chesapeake Energy downgraded to Underperform from Mkt Perform at Bernstein
Lam Research initiated with a Buy at Mizuho; tgt $250
Reuters details that Wal-Mart (WMT) plans to use Tencent (TCEHY) for mobile payments instead of Alipay (BABA)