Tesla usually moves with the announcements Musks makes to manipulate the market. Last week an article came out about the massive amount of money they are burning on scrap. They just flew in a new assembly line for their battery plant. Their annual burn rate is $3.5B and sometime in the 4th quarter they will run out of cash. They have several hundred million dollars in bond payments that start this year. This year they will hit a total accumulated sales of 200K since they started selling cars. The government incentives come off at that point.

A few years ago in South Korea they were enjoying a robust electric car market with close to 6% of the market. Then the government incentives came off and sales dropped to near 0%. Automobiles have a highly elastic price. This means that when you raise their price, the demand corrects greatly.

All major car companies are developing electric cars. The competition couldn't come at a worse time for Tesla.

I would argue that without Musk's highly questionable accounting practices and without his highly questionable announcements of the next new great development, that shareholders would not support the stock price. This is a story stock. But story stocks need to at some point become profitable and meet the promises provided by their CEO.

My guess is that TSLA doesn't last more than one year unless Musk can keep convincing people to buy more bond or more shares offered. The last bond offering was oversubscribed. Three months later the price took a massive drop as buyers regretted taking such a risk.

Shorting is incredibly difficult. It all about the right stock that is surely going to go bankrupt. But its even more important to get the timing right. And few can ever get the timing correct.