Tesla Motors Inc (TSLA) Stock Drops Ahead Of Detroit Auto Show

Tesla Motors Inc (TSLA) Stock Drops Ahead Of Detroit Auto Show
Blomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) shares traded low on Monday after a lukewarm performance last week as the money flow is flat at negative $4.3 million, which suggested that investors were not very enthusiastic in initiating any strong position in the stock.

Revenue growth does not mean profit

Short Interest on the stock climbed 4.3% from the middle through the end of last month to 31.65 million shares, or 39% of the float. Days-to-cover for the stock was at 4.08 days compared to 2.68 days in the prior reading, and 26.06 days at the start of 2013.

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Investors might be expecting some substantial announcements from Tesla Motors Inc (NASDAQ:TSLA) in the upcoming International Auto show, held in Detroit, which is starting on January 18. The press preview will be on January 13th.

Some of the best innovative minds in the business are behind the success of Tesla, but the stock of the company does not justify its current valuation given that it has still to turn into a profitable company.

During the third quarter earnings release, Tesla Motors Inc (NASDAQ:TSLA) said that it expected its “non-GAAP profitability [for the quarter ended Dec. 31, 2013] to be about consistent with Q3”. The company is anticipating the surge in the cost would be similar to that in the revenue.

Tesla should see an increased demand of its vehicles, in the future, but that would not mean that the surge in revenue will turn the company profitable.

Tesla Model X spotted on road

Few days back, Tesla Motors Inc (NASDAQ:TSLA) Model X electric crossover was spotted on the streets of Culver City, California. Currently this prototype is expected to be the only completed Model X, and was located about 10 miles from Tesla’s design center in Hawthrone. Back in October, the company showcased the Model X in one of its Palo Alto stores.

It is expected that the Model X will be showcased at the 2014 Detroit Auto Show next week. The platform and hardware of the Model X are similar to that of Model S sedan with an 85-kilowatt hour battery pack.

The first look of the Model X was revealed by Tesla in February 2012 in a public jam-packed event at the headquarters of SpaceX. Since then, the Model X has been regularly in the news regarding its innovative features, “falcon wings” and much more.

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