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Northrop Grumman Corporation Message Board

  • mcmem mcmem Jun 24, 2013 4:27 PM Flag

    Beware shorting TSLA

    The stock market has dropped lately, but few knows that interest rate has gone up 1%. The obvious reaction is to short stocks like TSLA. After all, big companies like NOC need not pay stupid kids to hype the stocks.

    I got some finance # of TSLA. Its P/S ratio is 12 (Are you kidding me?). While cars are high price items, its sales is $944M and gross profit of $30M, suggesting that it is a low profit item in competitive sector. EPS is -2.78 with $1.86 cash, suggesting that it is going to live on borrowed money soon. As interest rate goes up, this kind of high-flyer stocks is the first to go down. However, my advice is to be careful and not to short this stock.

    The insiders own 35.3% and banks own 68.3%, totally 100+%. This implies that the insiders are using $ from other sources to cover the loss. Now, can you beat Elon financially?

    On the other hand, NOC CEO borrowed $ to buy back its stocks. I do not know the timing or details, but likely Bush borrowed at the lowest rate. This is the difference between NOC and TRW.

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